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3 signs that your company needs to update its employee contracts

No matter how good the relationship you have with your employees may be, an employment contract is a crucial protection for you and your business. The contract makes it clear what compensation and benefits a worker can expect as well as what performance and behavior you expect from them as their employer.

All too often, companies use basic employment contracts that they downloaded from the internet or create a custom contract when they first start the business and then never make any changes. An old contract could leave you vulnerable. These three examples are all red flags that you need to develop a new employment contract.

Your existing contract doesn’t have a social media clause

If you have been in business for years, your contract may not address important modern considerations. Social media clauses are a crucial protection for employers. They generally include language that limits what an employee can share about the business online. They can also create repercussions if a worker poorly represents your business on the internet or shares things that they shouldn’t. This clause could let you fire someone who goes viral for all the wrong reasons.

You use a document that you got directly off of a website or out of a book

Employment contracts that only cover the basics can work when your company first starts, but as you grow bigger, you need more protection. If you still use basic documents that aren’t specific to your company’s needs, the contract your workers sign may not protect your company at all.

A misunderstanding with the worker has led to a dispute or litigation

If your contract uses unclear language or isn’t specific enough about crucial considerations like severance pay, employees might come in to their relationship with your company without appropriate expectations. Sometimes you only realize the glaring omissions in your existing contract when an employee initiates an internal dispute or files a lawsuit against your company because they feel like you have violated the terms of your contract.

Routinely reviewing your employment contract with an experienced attorney can help maximize the protection that it extends to your company and minimize the legal risks you take on that when you hire new workers.