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kingofthehill

Employee Contract with Length of Employment?

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Good Morning,

I own a small business that has experienced rapid growth over the past few years. As you might imagine, I must spend a significant amount of time training new personnel and would like to keep them around for as long as possible. One challenge I have come across is pay and benefits in relationship to raises. I personally opted to start new staff at a higher than average salary and include benefits from day one, however, this seems to be creating some problems. For example, my primary manager has some expectation of a raise between 6 months and a year. Since I started him off at a much higher rate than the average (and included benefits) I do not believe a raise is due so quickly. This has created a bit of tension and despite my attempts to explain my side I can see that it has created tension.

Ultimately I want my employees to be happy but I also have to maintain profitability in my business. In the interest of finding common ground I am considering a small raise in exchange for a guarantee of employment duration. In other words, I want my investment to be met by a guarantee that he will be around for at least another year and/or provide me with sufficient notice to train a replacement. The traditional two week notice just is not enough.

During my research I came across the information copied in below which appears to imply that I can do this. I was hoping to get some insight or opinions about whether or not it is enforceable and if it is even a good idea.

As an example, if you have spent a considerable amount of time and money training a key employee, you may want to consider getting them under an employment contract. You can lock that employee into a specific length of employment under the contract, or you can put in notice clauses that will give you enough time to train a new employee (perhaps 90 days' notice). Although you cannot force an employee to stay with your company, an employee may be more likely to stay if there are penalties for leaving.

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During my research I came across the information copied in below which appears to imply that I can do this. I was hoping to get some insight or opinions about whether or not it is enforceable and if it is even a good idea.

Done correctly, an employment contract for a specific duration can be enforceable and can help you achieve stability in retaining key personnel. The trade off often is, however, that you may also be restricted in the reasons you may terminate the employee during the duration of the contract. You really need to consult an employment law attorney to get the contract drafted. There are certain things you need to ensure it is enforceable and will work the way you intend and you’ll likely want provisions in it to ensure that you don’t end up with unwanted suprises later. Employment law varies by state, and not knowing in what state your business is located, no one here could advise you on that.

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