There are 2.8 million small businesses operating in Florida. Many of these businesses have employees working for them. This presents a challenge to these business owners who must now navigate Florida employment law. One option is to use employment contracts for business. However, this may not be the best option. Business owners need to understand these unique contracts before deciding to use them.
When to Use Employment Contracts
Florida businesses do not need employment contracts for all their employees. Generally, the employment relationship in Florida is considered at will. This means that the employer or the employee can terminate the relationship at any time for any legal reason. There does not need to be notice or cause for the termination. Many employers prefer to maintain this type of relationship because it allows for the greatest flexibility.
Specific Time Period
In some situations, the employer may hire an employee to perform a particular job for a specific period of time. If the parties want to define the relationship, they can sign an employment contract that defines the working relationship. This allows both parties to have realistic expectations of when the employment will end. This type of employment contract is typically used when a business hires employees for a special project.
Limit Termination to Cause
An employer may want to provide their employees with a certain level of security. They could draft an employment contract that limits the employee’s termination to only “for cause” situations. This type of agreement should be carefully drafted by a lawyer, as it limits the at-will relationship. This type of employment contract is typically used for executives.
Risk of Discrimination
If a business decides to use employment contracts for a portion of its employees, it should be careful. Using contracts for some and not others can present the impression of discrimination. For example, a company signs contracts with a termination for cause clause for its male executives. However, the female executives do not sign any type of employment contract and are at-will employees. This would be considered discriminatory. If a business decides to use employment contracts for a particular group of employees, then all employees in that group should be treated the same.
Terms to Include
Florida law allows employers to include a wide range of terms in their employment contracts. However, this does not mean that all of these terms should be included. Once a term is included in the employment contract, it limits the company’s ability to modify or change these terms later on. Because these terms tend to be fluid as a business operates year to year, a business may want to leave them out of the contract. This allows the business to make changes without executing a new contract.
- Salary and wages
- Bonus eligibility
- Full-time or part-time status
- Exempt versus non-exempt status
- Benefits
- Severance pay upon separation of employment
- Standards of conduct.
Employment Contracts Are Legally Binding
Under Florida law, employment contracts for business are legally binding. This means that employers need to be careful about the terms included in the agreement. If they are not careful, they could unknowingly agree to detrimental terms. Should the employer violate the contract, the employee would have a right to sue for damages. This could result in high financial costs for the business.
Review Your Employment Contracts for Business
If you own a business and are considering the use of employment contracts, speaking with a lawyer could provide valuable insight. A lawyer can advise on the possible benefits and restrictions with such a contract in place. Should you decide to use employment contracts, your lawyer can write an enforceable contract outlining the terms you want to be included.
Schedule a consultation with an attorney to discuss your employment contracts.
