Before You Sign: What You Need To Know About Negotiating And Accepting Employment Contracts

Starting a new position or career can be exciting, but it’s important not to lose sight of a critical element of accepting a new job: negotiating the terms of your contract. You may assume that contracts are standard and not much can be negotiated, but this is far from the truth. This article delves into the details of new employee contracts, such as:

• What documents your onboarding packet should include, and what you should do when you receive it.
• Two issues people commonly overlook when signing an employment contract.
• What terms of your employment contract are negotiable, and what you should consider negotiating.

What Should An Employee Do Before Accepting A New Professional Position With A Company?

When you receive an offer for a new position at a company, you should also receive an onboarding package. Your onboarding package will include documents such as:

• An offer letter that highlights what the position is, how much money the position will pay, any terms and conditions around the position, and a place for you to add your signature.
• A W-9 or W-4 form, depending on whether you are a contractor or employee. A W-4 form allows you to set up your deductions for your tax and payroll.
• A direct deposit form.
• Additional forms related to the onboarding process for your new position.

It can be tempting to sign the forms and send them right back, as you will most likely be excited to start! But rather than rushing to fill out your documents, you should ask for at least 24 to 48 hours to review the information. You should ensure you have an opportunity to read through everything thoroughly before signing and returning those documents. Even if the forms require an e-signature, you should be able to download these items and convert them to a PDF so you have time to read them. Often, people rush and sign, and then they need to retain lawyers afterward because they didn’t know they signed something. You should take your time and go through each document to set yourself up for success.

What Might An Employment Attorney Find In An Employment Contract That An Employee May Miss?

One of the most common issues we encounter is that employees are not aware that they waived their right to a jury trial and automatically opted into an arbitration agreement. A second common issue arises with sign-on bonuses. When you are offered a sign-on bonus, the terms around the sign-on bonus usually require that you stay with the company for a particular amount of time. If you do not stay for the required time, you now owe that money back to the company. This may apply if the company has a layoff, which is no fault of your own, as well as in the event that you choose to leave on your own. If possible, you may want to take the time to negotiate these terms. If it’s out of your control, why should you pay the money back? Unfortunately, this situation happens all too often: you receive a sign-on bonus with a guarantee of so many months or years, but then the company realizes they can’t afford you. Now, they want to get rid of your position and get their money back — or at least a portion of it since you didn’t commit to the sign-on bonus terms.

How Much Notice Must I Give Before I Exit My Company?

The amount of notice you have to give before leaving your company depends on your contract. Although the standard is two weeks, your particular company or position may require more. For example, one of our clients was an executive who was fresh out of medical school and making six figures. His role included an obligation to give six months’ notice, but he only gave a two-month notice, thinking this was already way more than the average two-week notice. He thought he was doing the company a favor by giving them enough notice to shop around and find a replacement for him. Aside from his contract’s six-month notice requirement, there were other legal obligations he had to fulfill, such as paying back bonuses and turning in items like IDs, computers, or phones. When you are leaving a company, it’s crucial to consider what property might belong to your employer that you may need to return.

What Else Should I Consider Before Signing A Contract Or Exiting My Company?

In addition to other contract terms, many employees fail to realize that any original ideas, concepts, writings, drawings, or intellectual property may become company property. Often, employees waive their rights to these products and ideas when they sign their contracts, including patent ideas. For instance, one of our colleagues worked with the inventor of the Super Soaker. It was his idea, but since his company had the funds to patent it, they got the patent and made millions off of it, while he continued to be broke. If you come up with these original ideas, even if the company is funding the research and development, you should consider how you can receive payment for your ideas. This could include negotiating the terms so that you get paid a percentage for life.

Is It Okay To Negotiate An Employment Contract Before Taking A Position?

Yes, it is perfectly okay for you to negotiate your employment contract before you accept a position. You may feel as though you should just accept the terms that are offered to you, but you should consider what works best for you in your contract. Anything is negotiable, and especially when it comes to contracts and agreements, you always want to take into consideration the opportunity to negotiate. Many people go back and forth about their salary. They might be offered a particular salary amount, but they want to negotiate for more, whether that’s another 50 cents or another $50,000. People usually are equipped with the knowledge that they can negotiate their salary, but they don’t realize there are so many other negotiable terms within an employment contract. This includes what we have discussed previously, such as your intellectual property and exit requirements. You can negotiate who should have access to your creative ideas or the rights to a patent, copyright, or trademark, as well as how much notice you must give your company. Six months’ notice is a little unreasonable, because if you have a job offer on the table, what employer is going to wait six months for you to exit your current company? Most people will not exit unless they have job security on the other side. If you give six months’ notice, would you have to wait until month five to start looking for a job? This is a situation you should definitely consider and try to negotiate. The sign-on bonus is another part of your contract that you might want to consider negotiating. If your company realizes within a few months that they cannot afford to keep your position or there is no longer a need for your position, you should not be on the hook for the bonus you received. You may actually need that sign-on bonus to maintain your household and financial obligations while you look for a new position. If there is no way around returning the bonus, you can at least negotiate the structure of how that payback will look. For instance, perhaps you can negotiate having several months to pay it back versus owing a lump sum right away. Other possible areas for negotiation may include your report time. Perhaps most employees work from 8:00 AM to 4:00 PM, but you have to get your child to school at 8:00 AM. You may want to request a later report time as part of your contract, or perhaps you would rather leave early to pick up your child from school and have someone else drop them off in the morning. Almost everything is negotiable. You just have to go through and read each part of the contract and highlight what you feel you need to negotiate. You have to decide what you are willing to accept and what needs to change. Don’t assume that everything is standard. There is always flexibility if they want the value you provide.

What Aspects Of An Employment Contract Can An Employment Attorney Potentially Help Negotiate?

When it comes to your employment contract, each part of the contract is potentially negotiable. You may feel intimidated by the complexity of a lengthy contract, but rest assured that your employment attorney can review the contract for you. We can read and understand all the legalese and ambiguous language that does not make sense to most people. As your employment law attorney, we can take care of all of this for you. We can notify you if there is anything abnormal or anything you should be aware of. For example, we can make sure you know that you are waiving your rights to a jury trial, or if a certain paragraph or clause is requiring something of you. We can read through it, highlight the things that you should be concerned with, and bring your attention to the things that may be non-negotiable for you. For more information on Accepting A New Position With A Company, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling +1-888 5WHISTLE today.