Labor and employment law can be a tricky area for employers. First, they have so many different laws to comply with – FMLA, ADA and wage and hour laws, for example, just to name a few. And then there are conceptual legal constructs that employers must be familiar with, one of the primary ones being the difference between “at will” and contract employees.
At will versus contract
“At will” employment is the predominant legal presumption for employees throughout America. In short, this concept means that employees are free to leave employment whenever they like and, on the flip side, employers may terminate an employee’s employment at any time, for any reason – as long as the reason is not prohibited by law. There are, as our readers can probably imagine, many exceptions and nuances to the presumption of at will employment. However, the vast majority of workers in America are employed on an at will basis.
Contract employees, on the other hand, will have specific, detailed written legal employment agreements that dictate many of the terms of employment with a specific employer, such as: the length of the term of employment; compensation scales; possibilities for bonuses; benefits; and many other possible terms and conditions, depending on the nature of the employment position.
Of course, if employers go the contract route with an employee, there is the possibility for disagreement over the contract or even breach of contract allegations. That could lead to potential litigation. If you are weighing the pros and cons of using contracts with certain employees, be sure to get the right information about your potential legal exposure if you do so.