10 Things to Check Before Signing Your Next Job Contract
Last Updated: September 07, 2023
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Key Takeaways:
- Before you sign an Employment Contract, review it to ensure everything matches your expectations.
- Check that things like your job title, duties, salary, and start date match what you've discussed during interviews and negotiations.
- Review your contract to understand if your employment is at-will or if your employer has different contract obligations.
Every day, Americans get new jobs and sign Employment Contracts. In fact, the average American worker stays with a single employer for 4.1 years before moving on to another opportunity.
For that reason, you’ll probably sign an Employment Contract again in your lifetime.
Before you sign on the dotted line again, make sure you know how to review job contracts properly.
There are ten essential things you should check before signing your job contract. Let’s go through them.
Job title and duties
When reviewing your Employment Contract, ensure that the proposed job title and duties match what you’ve discussed in the interview and negotiation process.
Most likely, the title and duties will be as you expect. If they’re not, discuss your concerns with the hiring supervisor or human resources manager before you sign. It’s possible they made an error when drafting your contract.
On the other hand, you and your new employer could have different expectations, resulting in issues. For example, you could find yourself with unanticipated job duties for which you aren’t qualified.
Also, your job title should reflect your seniority.
Suppose you interview for a manager position but find the job title in your Employment Contract changed to “supervisor” or “lead.” Small changes in wording can affect things like your compensation and responsibilities. Also, ensuring your job title reflects your position allows you to accurately update your resume for future job opportunities.
Salary
In most cases, you should have clear expectations regarding salary before reviewing an Employment Contract.
Ideally, the employer should send you a Job Offer Letter in advance that summarizes the proposed job terms, including your compensation. An offer letter is beneficial because it outlines clear terms you can accept or negotiate.
When reviewing your contract, its salary terms should match those outlined in your offer letter or discussed during negotiations. If they don’t, bring up your concerns with the employer.
Some employers give staff members performance-based incentives that affect salary (e.g., bonuses). If you have discussed these incentives with an employer during the interview and negotiation process, ensure that your contract outlines these key details too.
In addition, check your contract for terms explaining when you’ll be paid. Suppose you sign your contract without understanding that it outlines a monthly payment schedule. If you expect and require bi-weekly payments, your employer will have no obligation to accommodate your needs.
Employment dates
Your Employment Contract must have a precise start date.
Having a start date is essential in situations where you are transitioning between jobs. It’s hugely inconvenient if your last day at your current job clashes with the start date of your new job. Hence, check your proposed start date before signing your job contract.
If you’re being hired as a temporary employee, perhaps to cover someone’s maternity or paternity leave, your contract should contain an end date too. If your position is permanent, your contract won’t include an end date.
Check the employment dates before signing to ensure you and the employer are on the same page. Suppose you think you’re being hired as a permanent employee, but your contract has an end date. In this case, you can sort out the misunderstanding with the employer before you’re bound to the contract.
Working hours
To ensure you’re entitled to work the hours an employer promised during negotiations, your Employment Contract needs to specify your permitted working hours.
Different employers allow their employees to work all sorts of hours. Some employers require staff to work set hours, such as 9:00 AM to 5:00 PM. Others let staff choose their own start and end times.
Some employers let their staff enjoy flexible hours, meaning they can work shorter hours on some days and longer hours on others.
When an employer has promised that you can set your own hours, it’s best to get their permission in writing. Having a written record of their obligation protects your right to set your own hours. If you’re reviewing an Employment Contract that doesn’t include terms for your working hours, consider bringing it up with the employer.
Place of work (remote versus on-site)
In today’s working world, it’s become increasingly common for employees to work remotely. Some people work remotely full-time, while others enjoy a hybrid style of working both on-site and remotely. Of course, many employees only work on-site too.
When reviewing a job contract, it’s recommended to check the terms related to your place of work. If you’ve been told you can work remotely full-time, your contract should say so. If you’ve been told you can work remotely three days per week, your contract should say so.
If your contract doesn’t outline your place of work, you could run into problems. For example, suppose your employer hires you as a remote data entry clerk, and then six months into your position they request that you come into the office. If your Employment Contract doesn’t protect your right to work remotely, you may have to comply with your employer’s request.
If your position is something that can only be performed on-site, it may not be as important that your contract includes language concerning your place of work.
Employee benefits
Employee benefits are the additional perks and compensation your employer gives you in addition to your base salary.
Employee benefits may include:
- Health insurance
- Dental and vision insurance
- Life insurance
- Paid vacation
- Employee ownership shares
- Performance bonuses
- Pension plan
If you’ve discussed benefits throughout the interview and negotiation process, you’ll want to check for consistency within your Employment Contract before signing. For example, if you negotiate more paid days off, check that your employer includes them in your contract.
If you haven’t discussed benefits with your new employer, thoroughly review your Employment Contract to better understand the benefits you’ll be getting. If you’re unsatisfied with the proposed benefits, bring up your concerns with your employer before signing.
Sick leave
Another thing to check in your contract is your right to sick leave.
If you and your employer meet specific requirements, you’re covered for unpaid, long-term sick leave under the Family and Medical Leave Act (FMLA). The FMLA entitles you to take leave for specified family and medical reasons with the continuation of group health insurance coverage.
Paid sick leave is different. There isn’t a federal law requiring a private employer to provide staff with pay while sick. Therefore, laws concerning paid sick leave change from state to state. Some cities and municipalities also have sick leave laws.
Ideally, your Employment Contract should outline your rights to paid sick leave. If it doesn’t, ask your employer for clarification before signing. Knowing your rights ahead of time can prevent issues down the line.
Intellectual property ownership
Before signing your job contract, check for a clause discussing proprietary rights and intellectual property (IP). Intellectual property refers to creations of the mind.
Generally, employees with technical or creative roles will find intellectual property clauses within their contracts. Such clauses protect the employer's proprietary rights.
It’s standard for employers to own their employees' work, so don’t run away if you find an intellectual property clause in your job contract. Rather, it’s important to check for IP clauses, so you understand the exact terms and rules of your employment.
Restrictive clauses
A restrictive clause prohibits you from acting in a way that could cause harm to the employer. For example, an employer may add any of the following clauses to a contract:
- Non-compete: This clause stops you from unfairly competing against the employer during and after employment, preventing a conflict of interest.
- Non-solicitation: This clause prevents you from recruiting any of your coworkers after you’ve left the employer.
- Confidentiality: This clause prevents you from divulging the employer’s confidential information to unauthorized third parties, such as competing companies.
A job contract could also outline a duty to devote your full time to your position, limiting your ability to hold secondary jobs that may interfere with your job performance.
When reviewing your Employment Contract, check for any restrictive clauses.
Finding restrictive clauses shouldn’t necessarily scare you away. It’s simply beneficial to be aware of your rights and obligations before becoming legally bound to a contract.
Checking for restrictive clauses also gives you a chance to ensure they’re reasonable. If the restrictions are too broad or last too long, they may be unenforceable.
Alternatively, an employer may ask you to sign a Non-Compete or Confidentiality Agreement instead of including restrictive clauses. In that case, read over these documents carefully before signing.
Termination details
Checking the termination details of your job contract is important before signing a job contract.
First off, a contract may outline a probationary period, in which the employer has the right to terminate employment without any notice. Probationary periods are standard practice, as they allow employers to ensure that you’re a good fit.
Job contracts should outline termination details following a probationary period too. For example, a contract may stipulate a certain notice period you and your employer must provide before terminating employment. Also, a contract may require you to provide written notice in the form of a Resignation Letter.
Like with the other things outlined above, reviewing a termination clause ensures you understand your rights and obligations before you get legally involved with an employer.
Always review a contract before signing
Employment is at-will in all U.S. states except Montana. At-will means an employer can terminate an employee at any time for any legal reason.
At-will also means that employers can change employment terms without notice. Changes could include altering your salary, lowering your paid time off (PTO), or demanding that you stop working from home.
However, Employment Contracts can modify the employment-at-will rule. So, review your contract to understand if your employment is at-will or if your employer has different contract obligations, such as giving you notice before termination.
By reviewing an Employment Contract, you’ll understand the initial terms under which you’ll be working and get a sense of an employer’s intentions and values.
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