The value of updating employment contracts

| Apr 14, 2021 | Business

Employment contracts can provide support for employers and their workers. A well-written agreement enables employers to define their expectations. It also informs employees of their rights and the terms of their employment.

While a contract template can provide a good starting point, companies that rely solely on templates may miss critical details in their contract. Equally as detrimental is their decision to periodically review and update all employment agreements.

Address job-specific factors

Even though employers may have a general structure for each of their employment contracts, different jobs in their organization will have unique circumstances. These differences should reflect in an employment contract so that both employer and employee have formal documentation of agreed-upon responsibilities.

According to Business News Daily, some job-specific factors that require individual attention include the following:

  • Pay structure and compensation
  • Job requirements and expectations
  • Requests for confidentiality

Avoid legal repercussions

An employment contract should contain a clause outlining employee classification. The Blueprint, A Motley Fool Service reminds employees that misclassification is punishable by law. Depending on employee-employer relationships, changes to classification may happen over time. Forgetting to update these changes can cause detrimental problems.

A well-written and updated contract can protect employers from legal repercussions. A periodic review of all documents should assess the applicability of the content and determine where modifications could improve understanding and preserve a contract’s function and purpose. In addition, employers can also encourage their workers to review contractual agreements from time to time. This review can provide reassurance for both parties of each other’s commitment to maintaining and improving the relationship.