What to Think About When Negotiating Employee Contracts
Although the majority of jobs are “at-will,” an employer/employee relationship can often benefit from an employment contract. This is a complex document that should be drafted by an employment law attorney. When you meet with your attorney to discuss the contract, consider the following factors. Your responses to the following issues will help shape your employment negotiations with the new hire.
Concerns Regarding Compensation
Compensation is more complex than a salary figure. During your negotiations, the new hire may inquire about a signing bonus. If the new employee will be a considerable asset for your company, it may make sense to offer a signing bonus, especially if the individual will be losing benefits while switching jobs. Other issues to consider include the following:
- Will the employee’s base salary increase? How often and by how much?
- Will the employee be eligible for a bonus? How often and is it guaranteed or dependent on performance or other factors?
- Are there any circumstances in which the base salary may be reduced?
Issues Pertaining to the Scope of Employment
The scope of employment section of the contract contains a number of the basic logistical details. Some of them aren’t usually negotiable, such as the place of employment and the job title. Some of these details may be negotiable, such as the employee’s responsibilities and whether the employee will be granted a seat on the Board of Directors. Other issues to consider include the following:
- Circumstances in which the employee can be demoted
- Circumstances in which the employee’s responsibilities can be modified
- Whether the employee can be relocated to another city
Considerations for the Employment Term and Termination
An employment law attorney will scrutinize every word of this section. Termination is a common cause of disputes. During your negotiations with the new hire, you should discuss the length of the contract and the circumstances in which the employee may be prematurely terminated.
For unparalleled experience in the employment law field, turn to Mesch Clark Rothschild. Our attorneys are skilled at representing employers in and out of the courtroom. Call (520) 624-8886 to request a consultation at our office in Tucson.