Year end is the perfect time to start planning to update the employment agreements you have with your existing employees. For a new contract with existing employees to be enforceable, adequate “consideration” must be provided to the employee, or alternatively, adequate notice of the change must be provided. As budgets for the upcoming year get planned and bonus’ get allocated, the time is right to introduce a new, enforceable contract and take advantage of that planned “consideration”.
Although there are many reasons to consider implementing new and updated employment contracts with existing employees, a few of the most common concerns are:
- The employee was provided with an “offer of employment” but never signed a comprehensive and enforceable employment contract (see this post about the importance of having an enforceable, comprehensive employment contract);
- The employee has changed positions and a new contract was not entered into;
- There is no termination clause in the employment agreement, or there is an inadequate or unenforceable clause to deal with what happens upon the termination of employment (see this post regarding the enforceability of termination clauses and this post about terminations generally;
- The introduction of a substantial policy change: i.e. converting various time off policies to one, comprehensive Paid Time Off policy (see this post about PTO policies).
Cornell Legal is available to discuss the implementation of new employment contracts for your employees.