Valentine’s Day (February 14) is just around the corner. Although this day is traditionally thought of as a romantic occasion, it’s possible to use this day as an opportunity to give a non-romantic gift. This year, use the opportunity presented by Valentine’s Day to give the gift of an updated employment contract to an employee. In this post, we will discuss why giving this gift can be so valuable to an employee.
All Employment Contracts Have an Expiration Date
We’ve discussed the basics of employment contracts before on our blog. As we’ve discussed, employment contracts are privately negotiated agreements between employers and employees, and these agreements supersede the default rules pertaining to employment. For example, an employment contract will spell out the conditions associated with the termination of an employee; the default rule of “at will” employment no longer applies in this scenario.
Because employment contracts have very specific conditions, traditionally they all expire at one point or another. These contracts can be of widely varying durations – some last for 1 year, or 2 years, or even 5 or more years – but basically all employment contracts have a finite time period. This doesn’t necessarily mean that the employee must leave at the end of the contract; on the contrary, the end of one contract can also lead to the creation of a new and improved one. Or, a preexisting contract can simply be updated such that the previous one no longer applies.
Provide New Perks with an Updated Contract
How can an updated contract be construed as a gift? In and of itself, an updated contract might not confer too much value to an employee. The key is in the details. Depending on exactly how the contract is developed, an updated agreement might be an excellent gift to an employee. For instance, suppose a new contract offers substantially greater benefits and greater perks than the previous one. Suppose you offer more paid time off (PTO), more flexibility (which leads to greater work-life balance), better performance incentives (i.e. more bonus compensation, etc.), and so forth. Any employee who receives a new contract with these kinds of updates would be very happy.
Better Employment Contracts Lead to Better Retention
As a firm owner, you need to remember that employee retention is a major concern, and retention is a competitive process in some sense. When you offer an updated employment contract with superior terms, that updated contract will nearly always translate to better retention outcomes. And, in turn, better retention translates into better overall company performance. Turnover reduces morale, and increases costs in various ways. Thus, when you develop updated contracts, you are simultaneously investing in your own company.
Be Advised: Modifications Require Independent Consideration
Updating an existing contract is something which needs to be done with expert care. The reason for this is because modifications to existing contracts require the same type of contract formation process which is at the root of the original contract. In other words, if you want to add or subtract items from the existing contract, you and the employee must bargain and negotiate in the same manner which occurred when you made the original hire. This is just how contracts work. This is precisely why you need the guidance of an experienced business attorney. If you update an employment contract without expert guidance, you might end up creating an unenforceable agreement.
Contact the Trembly Law Firm for More Information
An updated employment contract might not be your first thought for a great Valentine’s Day gift. But, as we’ve shown, an updated agreement can be an opportunity to bestow greater benefits to an employee, and this can have serious positive consequences, both for the employee and for your company. To learn more, contact the Trembly Law Firm today by calling 305-985-4573.
Trembly Law Firm
9700 South Dixie Hwy Penthouse 1100
Miami, Florida 33156