There is a significant presence of small businesses in Florida, with around 2.8 million small businesses currently operating in the state. As these businesses operate and expand, they encounter the challenge of complying with Florida employment law while managing their workforce. One option is to use an employment agreement for business.
An employment agreement is a written document that establishes clear expectations between employers and employees. It outlines the terms and conditions that govern the employment relationship, including whether the employee is employed “at will” or under specific contractual terms. These agreements play a vital role in promoting understanding and accountability between both parties.
It is essential to have well-drafted contracts tailored to each business’s and its employees’ unique needs. This ensures that the agreements accurately reflect the roles, responsibilities, and obligations of all parties involved. These documents must be tailored to your business and individual employees and their responsibilities.
Do you need employment agreements?
Employment contracts are not mandatory for all employees in Florida businesses. Typically, the employment relationship in Florida is considered “at will,” allowing either the employer or the employee to terminate the relationship at any time and for any legal reason. This flexibility is preferred by many employers.
However, there are specific scenarios where employment contracts can be beneficial:
Specific Time Period
If an employer hires an employee for a predetermined period or project, both parties can establish a clear working relationship by signing an employment contract. This ensures realistic expectations regarding the employee’s duration. Such contracts are commonly used for special projects.
Limited Termination to Cause
Employers may choose to offer a certain level of job security to their employees by drafting an employment contract that restricts termination to situations involving “cause.” These agreements should be carefully crafted by legal professionals, as they limit the at-will nature of the relationship. This type of contract is typically used for executives.
Risk of Discrimination
When using employment contracts for a specific group of employees, businesses should exercise caution to avoid any perception of discrimination. Treating some employees differently by offering contracts while others remain at-will could be seen as discriminatory. If employment contracts are used for a particular employee group, all employees within that group should be treated equally.
Terms to Include in Employment Agreements
Florida law permits a wide range of terms to be included in employment contracts. However, it is not necessary to include all possible terms. Once a term is incorporated into the contract, it becomes more challenging to modify or change it in the future. Since business needs may evolve over time, excluding certain terms from the contract may be prudent, allowing for more flexibility in making future changes.
These are some common terms that can be included in employment contracts:
- Salary and wages
- Bonus eligibility
- Full-time or part-time status
- Exempt or non-exempt status
- Severance pay upon employment separation
- Standards of conduct
Drafting Employment Agreements
The drafting of employment agreements that suit your business needs requires an attorney who is experienced in business drafting and has a strong financial background. At the Campbell Law Group, we possess the necessary experience in drafting employment agreements that address cross-border transactions and jurisdictional complexities that must be carefully considered when entering into such agreements.
Our firm proudly serves clients from all across Florida and has successfully collaborated with employers representing diverse industries and sectors. These include traditional commerce-based businesses, human resources firms, manufacturers, importers, logistics companies, etc.
If you are seeking guidance on how our firm can assist you in your employment agreement needs, please reach out to us for further information.
Frequently Asked Questions
What is the difference between an at-will employment relationship and a contract-based employment relationship?
In an at-will employment relationship, either the employer or the employee can terminate the employment at any time, with or without cause, as long as it does not violate any anti-discrimination or anti-retaliation laws. No specific contract is in place, and the employment is based on mutual consent. On the other hand, a contract-based employment relationship involves a formal written agreement between the employer and the employee that outlines the terms and conditions of the employment. This contract establishes specific rights and obligations for both parties, providing a higher level of job security and stability.
Does an employment contract have to be in writing?
Employment contracts can be written or verbal, but having a written one offers clarity and provides evidentiary support for both the employer and the employee.
By ensuring that the terms of the employment contract are clearly articulated and easily accessible, the likelihood of disputes arising is minimized, as both the employer and the employee have a shared understanding of what is expected.
Can a contract of employment be changed?
There may be instances where an employer or an employee desires to change an existing employment contract. However, such modifications cannot be made unilaterally; both parties must reach a mutual agreement to implement any changes.
Are employment agreements legally binding?
It is crucial to understand that employment contracts for businesses are legally binding under Florida law. Therefore, employers must exercise caution when including terms in the agreement. Inadvertently agreeing to unfavorable terms could expose the business to potential lawsuits and financial damages. Employers should be mindful of contract compliance to avoid costly legal consequences.
What legal protections do employers have if an employee violates the terms of an employment contract?
If an employee violates the terms of an employment contract, employers have legal protections to address the breach. These may include:
- Legal remedies: Employers can seek remedies such as damages, specific performance, or injunctive relief through legal action.
- Termination: Employers may have the right to terminate the employee’s contract and employment if the breach is significant or repeated.
- Enforcement of contractual obligations: Employers can enforce specific terms and conditions outlined in the contract, such as non-compete clauses or confidentiality agreements, through legal means.
How can an employee be in breach of contract?
An employee may be considered to be in breach of contract if their actions deviate from what is outlined in the terms of the employment contract. Some examples of breaches of contract by an employee include:
- Breach of confidentiality
- Repeated misconduct
- Working for a competitor when prohibited
- Resigning without serving the required notice period or without providing proper notice.
- Persistently arriving late, causing financial losses to the business.
- Failure to fulfill duties specified in the contract, resulting in financial losses to the business.
Can an employer terminate an employee without cause if there is an employment contract in place?
The ability to terminate an employee without cause depends on the terms specified in the employment contract. If the contract includes provisions allowing termination without cause, the employer may have the right to terminate the employee’s employment even in the absence of any wrongdoing or performance issues. However, if the contract specifies that termination can only occur for cause, the employer would need a justifiable reason to terminate the employee’s employment.
What happens if an employee resigns before the end of their contract term?
When an employee resigns before the end of their contract term, it may constitute a breach of the employment contract. The consequences of such resignation are typically outlined in the contract itself. Depending on the terms, the employer may have the right to seek damages for breach of contract or enforce other remedies specified in the agreement. However, it is essential for employers to carefully review the contract terms and consult with legal counsel to ensure compliance with applicable laws.
What steps should employers take to ensure their employment contracts comply with Florida employment laws?
To ensure compliance with Florida employment laws, employers should consider taking the following steps:
- Consult with legal counsel: Seek advice from experienced employment law attorneys knowledgeable about Florida’s specific employment laws and regulations.
- Review and update contracts regularly: Regularly review and update employment contracts to align with changes in laws and best practices. Ensure the contracts address key legal requirements, including anti-discrimination provisions, wage and hour laws, and specific industry regulations.
- Tailor contracts to individual roles: Customize employment contracts to reflect each position’s unique needs and responsibilities.
- Provide clear language: Use clear and unambiguous language in the contract to minimize potential misunderstandings or disputes.
- Communicate contract terms: Ensure that employees receive copies of their employment contracts and have an opportunity to review and understand the terms before signing.
What should employers do if they need to terminate an employee with an existing employment contract?
If an employer needs to terminate an employee with an existing employment contract, they should:
- Review the contract: Carefully review the termination provisions outlined in the employment contract to determine the specific requirements and obligations related to termination.
- Follow contractually agreed-upon procedures: Adhere to any procedures or notice periods specified in the contract for terminating the employee’s employment.
- Seek legal advice: Consult with legal counsel to ensure compliance with all legal obligations, including potential severance pay or other post-employment benefits that may be required under the contract or applicable employment laws.
- Communicate with the employee: Notify the employee of the termination in accordance with the contract and engage in a respectful and professional manner during the termination process.
- Document the termination: Maintain proper documentation of the termination, including any relevant correspondence, meetings, or agreements, to protect the employer’s interests and demonstrate compliance with contractual obligations and legal requirements.