You are moving closer to starting a new business, and you are trying to determine how to hire your initial staff. You have owned a business before, and one major issue you ran into was contract disputes. Your employees had contracts, and you had disagreements about severance packages, for instance, or when you were allowed to terminate employees from their positions.
As such, before starting your new business, you may find yourself wondering if you have to use employment contracts in the first place. Could you avoid all these contract disputes simply by avoiding the contracts themselves?
At-will employment
You are not obligated to use employment contracts. However, if you do, that means you are hiring at-will employees. They are not contractually obligated to work for your business for any amount of time. They are only employees at the company as long as both of you want that relationship to continue.
This can simplify things, as many small businesses do. However, not using employment contracts can also remove some protections. For instance, an at-will employee is not obligated to give you two weeks’ notice before they quit their job. They can quit at any time. If you want to make sure that employees always have to give notice, then you need to include exactly how much notice is required in the contract as well as what the consequences are if an employee quits without this notice.
There are both pros and cons to using employment contracts, but be sure you know what legal steps to take when drafting them or addressing any potential disputes. Having experienced legal guidance is key.