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What Terms Are Essential in an Employment Contract?

Georgia is a “right to work” state, which means most employment is “at will” — in other words, not contractual. However, it is possible that your new employer will ask you to sign a contract that will define the employment relationship. Take the time to make sure you understand all the details of the employment contract before you sign.

Every employment contract is unique but there are certain essential terms. These are the provisions you should look for:

  • Length of employment — An employment contract typically lasts for a set period, which may or may not be renewable. Make sure the term of the contract is clear and that the conditions and procedures for extensions are spelled out.
  • Job description — The contract should include the employee’s job title and a precise description of duties and responsibilities. This description may be critical in later evaluations of job performance, which can affect compensation as well as continuation of employment.
  • Compensation — Simple employee contracts will set a base salary or hourly wage. If compensation is hourly, it is important for the contract to specify what hours you will work and when overtime rates apply. Other contracts may provide for additional compensation based upon things like business development or increases in company profits. The contract may also give eligibility criteria for bonuses and salary increases.
  • Benefits — The contact should specify whether the company will pay for or subsidize health insurance for you and your family. If disability insurance is provided, the contract should specify the conditions and duration of the coverage. The contract should also define your right to life insurance coverage and retirement benefits. Provisions for earning vacation days and other paid time off should be included.
  • Restrictive covenants — It is common for contracts to contain covenants that limit the employee’s use of the company’s confidential information or trade secrets. However, other covenants may restrict the employee’s ability to contact the employer’s clients or compete against the employer after employment has ended. This latter type of covenant should be of limited duration and geographical scope so that it does not unduly hamstring your career opportunities.
  • Termination — The contract will delineate in what circumstances either party may end the employment early and what severance pay you may be entitled to. Often, contracts limit termination of the employee to situations in which the termination is “for cause.” This section of the contract should specify what type of conduct will justify such a termination.

However enticing a job offer may seem, it’s still wise to step back and give the proposed contract a thorough review before accepting the position. Consulting with an experienced Georgia employment law attorney is the best way to ensure that the contract protects your interests.

The Reddy Law Firm, P.C. represents employees and employers throughout Gwinnet County, Fulton County and the surrounding areas. Our office is in Suwanee. To schedule a free attorney consultation, please call 678-629-3246 or contact us online.

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