As a business owner, you should keep your records organized and updated with any recent changes in your management, operations or similar business aspects. This includes updating your employment contracts.
A misconception about employment agreements is that they are absolute and unalterable. But actually, these contracts are very much modifiable and employers update them for several reasons.
Changes in federal and state labor laws
Though many labor laws remain untouched, the government implements new rules and regulations, or changes thereof, to continue protecting employer and employee rights. For example, the Federal Trade Commission (FTC) recently proposed a ban on noncompetes earlier this year, 2023. Once the FTC implements the ban, employers must update employee contracts with noncompete clauses. Otherwise, it may affect the validity of the agreements.
Changes in workplace policies and practices
It is not uncommon for companies to implement policy and practice changes, especially if necessary for the business’s growth and development. Accordingly, employees’ duties and responsibilities may also change alongside these policy updates. Updating the employment contracts according to the changes would be the wisest move to ensure that both sides are continuously protected.
Changes in the employment market
Changes in the employment market prompt business owners to adjust accordingly to retain employees. Typically, employers offer additional benefits or incentives to retain their staff. When they make these offers and the employees accept, they must update the employment contracts.
Regular contract reviews for your business’s protection
Scheduling regular reviews of your employment contracts and updating them when necessary are crucial in protecting your business. Primarily, it prevents possible employment disputes and helps your company avoid serious legal consequences.