4 signs that you should update your existing employment contracts

On Behalf of | May 14, 2021 | Employment Law |

The people you hire for your business can help it grow, or they can cause a lot of problems. Employees are as much of a liability as they are a benefit for your company. The things that they do on the clock can adversely affect your company’s daily operations, reputation or finances.

Your employment contract helps protect you from the risks involved in hiring workers. The contract new employees sign lets them know what you expect from them and also what you will do for them. Contracts create obligations and give either party the ability to push back when disappointed in their expectations.

Employment laws and company culture change all the time. If any of the four situations below seem to apply to your company, it may be a sign that it’s time to update your employment contracts.

  1. Your business has grown substantially

Your concerns about employee performance and behavior will be different when you have three people on staff versus 30 employees. As your company grows, you will likely need to integrate more rules.

You will also learn from experience about what contractual terms protect your business. You may need to update, expand or completely change your existing employment contract as you add more staff.

  1. The rules for your industry have shifted

Federal and state laws regarding businesses frequently change. New technology initially not regulated will eventually become the focus of new legislation. Changes in how an industry does business will prompt lawmakers to change regulations as well.

If your contract does not reflect current laws or requirements for your industry, whether they involve safety equipment, training or daily work practices, you will want to update your contract to reflect the new laws.

  1. You’re still using a generic form you downloaded from the internet

Employment contracts should focus on creating protections. Using generic documents that you download off the internet will give your company minimal protection. If you don’t have an employment contract that addresses your company’s unique needs and concerns, it’s likely time to upgrade the contracts you use.

4.Your company has new products, processes or clients

With success comes company development and changes. While you initially may not have had many trade secrets that differentiated your business from your competitors, you may now do things slightly differently to help your business maintain a competitive edge.

If your existing contracts don’t include restrictive covenants like non-compete or non-disclosure agreements, you may need to revise your contract to protect the information that makes your company profitable.


Understanding when to update your contracts and what is necessary for them to be enforceable is important for your company’s future solvency and success.