Employment Contract Regulations
The terms of an employee and employer's business relationship are set forth in a document known as an employee contract. Employee contracts may be written documents, but some individuals and organizations choose to use oral contracts instead. Oral contracts are more difficult to prove, but the contracts are still legally binding. If the employee or employer disagrees with the terms of the contract, both parties should make the changes before approving the agreement.
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Termination
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Terminating an employee is not as simple as it may seem. To avoid legal lawsuits, employers must abide by all the terms in the employee contract, especially termination. Employers must terminate employees with good cause, unless the length of employment specified in the contract, such as one year or two years, has expired. According to NOLO.com, good-cause reasoning varies from state to state, but typically means the employer has a legitimate and good reason to terminate an employee's contract. Some companies terminate employees based on low performance, or if the employee does not meet the company goals and needs as described in the employee contract and job description, such as an employee in sales. Harassing co-workers, disrupting the work environment, threats of violence, excessive absences from work, violating company policy, dishonesty, stealing or other criminal activity are some examples of good cause.
Employee Salary and Benefits
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Employee contracts should state the salary for an employee, as well as any benefits the employee is entitled to. Once the contract has been made, an employee agrees to the terms, including salary, until the contract has expired. Changing salary and benefits requires the contract to be renegotiated according to NOLO. Benefits that an employee is entitled to through the company, such as health insurance, sick pay, vacation time, paid family or medical leave, must be given to the employee within the time frame listed in the employee contract. For instance, if an employee becomes eligible for health benefits after working 90 days with the company, the employer must extend the benefits to the employee after the time frame.
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At-will Employees
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Carefully reviewing an employee contract before signing it is a good idea. An employee that signs a contract which states he is an employee at will does not have the same benefits as other employees. Even though the employee has signed a contract, his employer has the right to fire him at any time, for any reason that is not illegal under federal and state laws such as discrimination. According to NOLO.com, Montana is the only state that protects at-will employees from being fired without good cause, as long as the employees have completed an initial probationary period. Likewise, an employee has the right to quit his job at his own will.
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