New Job? 5 Things to Look for in Your Employment Contract

You have successfully completed your search for employment – let us be the first to congratulate you!

While exciting, starting a new job can also be a bit overwhelming. You likely have many questions about your new workplace and the policies and processes you will be expected to follow once you arrive. For some new employees, a written employment contract will answer many such questions, either directly, or by referring you to supplementary handbooks or manuals. These documents can be very helpful in clarifying your employment rights and responsibilities – however, they can also be difficult to navigate if you aren’t sure what to look for.

With that in mind, we have identified certain key aspects of your new employment relationship you should be aware of before your first day on the job. Whether you are a seasoned employee or a new member of the workforce, here are 5 things to look for in your employment contract:

1. Hours and Location of Work

Does your contract outline a specific work schedule, or can you determine your own hours? Are you required to report to work every day, or are you allowed to work remotely from home or elsewhere? If you anticipate needing flexibility with regard to your work hours or location, make sure to clarify your employer’s expectations before you start.

2. Compensation

What is your base pay? Is your bonus guaranteed, based on a formula, or discretionary? Are you entitled to extended health benefits, and how much are you expected to contribute to any premiums? How much vacation time are you entitled to, and what happens if you don’t take it – does your employer have a “use it or lose it” policy, or can you carry forward the unused time or ask for a cash payment in lieu? Being clear upfront about your contractual rights to compensation can help minimize future disputes, particularly should the employment relationship come to an end.


3. Overtime

What does your contract say, if anything, about your employer’s overtime policies? Do you need permission to work extra hours? If you are a manager, and therefore not entitled to overtime pay under employment standards legislation, does your salary adequately compensate you in the event you put in long hours?

4. Termination and Severance

What does your contract say about your rights if your employer terminates your employment without cause? Is there a clause stipulating how much notice or severance you will receive? Does the contract limit your severance to the minimum amounts set out in the Employment Standards Act? Perhaps it contains a formula for calculating your severance based on the length of your service to the company?

While getting fired is typically the last thing on a new employee’s mind, understanding your contractual termination rights can actually help provide peace of mind when you are starting a new job. Because the experience of dismissal can be overwhelming, it is wise to look ahead and consider in advance how much severance pay you think will be appropriate.

5. Restrictive Covenants

Does your contract limit your ability to seek re-employment if you are fired or decide to quit? Are you prohibited from setting up a competing business or soliciting your employer’s clients or other employees following termination of your employment? Non-competition, non-solicitation, and other restrictive covenants can hamper your future employability. While it can be difficult to predict the future, consider whether you think any of the clauses in your contract will place unreasonable restrictions on your future job search efforts.


Bottom Line

The above are just a few of the questions employees should ask before starting a new job. If the answers are not found in a written employment contract, make sure to get the clarity you need by speaking with the person in your organization who is responsible for human resources issues. And remember, even if your employer has not asked you to sign a written document summarizing the terms of your employment, your relationship is still a contractual one under the law.

If you have been presented with a written contract, and have questions about it or your rights as an employee, we recommend you consult with an employment lawyer. The advice you receive now may help you avoid unnecessary legal or other costs down the road.

Have questions about a new employment contract? Contact us!

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