New Jersey Employment Contract: Definition, Key Considerations

What is a New Jersey Employment Contract?

A New Jersey employment contract is a legally binding contract between an employer and an employee that lays out the specific rights and obligations of both parties. Employment contracts can be used when hiring permanent employees, temporary employees, contractors, and subcontractors.

Some issues commonly addressed in a New Jersey employment contract include:

• Compensation
• Working hours
• Vacation and time off
• Job duties
• Employment start date
• Duration of employment
• Procedures for discipline and grievances
• Reasons for termination
• Non-compete clause and non-disclosure clause

The purpose of an employment contract is to protect the rights of both the employee and the company for which they work. In an “at will” employment state like New Jersey, without an employment contract, employees can be terminated for any reason without notice.

Similarly, without an employment contract that includes non-compete clauses and non-disclosure clauses, an employer could risk at an employee sharing trade secrets or working for a competing company.

Are Employment Contracts Enforceable in New Jersey?

New Jersey views employment contracts as legally binding documents and therefore enforceable under New Jersey labor laws. Once agreed upon and signed, a New Jersey court will hold both parties to the terms of the contract.

Employment contracts must adhere to New Jersey contract laws. There needs to be an offer, acceptance, and consideration. The contract must be signed by legally competent adults and cannot include provisions that violate the law or public policy. For example, an employment contract cannot require an employee to agree to work for below New Jersey minimum wage.

Restrictive covenants like non-compete agreements will be enforced in New Jersey but must adhere to the following requirements:

1. Used to protect the legitimate interests of the company
2. Does not impose an undue hardship on the employee
3. Does not injure the public

Courts will review non-compete agreements to determine whether the agreement is reasonable and decide if the restrictions meet the balance of protecting employers while allowing employees to earn a living.

What Are the Legal Requirements for New Jersey Employment Contracts?

Employment contracts can come in many forms so the legal requirements for this document are relatively lenient. New Jersey recognizes formal written contracts, offer letters, and even verbal agreements as valid employment contracts.

• Written employment contract. It is recommended that all employment contracts be written and signed by both parties even though this is not a legal requirement. Written contracts are the easiest to enforce because there is a tangible document that can be used as evidence in court. A written contract will also help settle disputes before they reach court.
• Offer letter. An offer letter is an informal document provided to prospective employees. The letter will contain information like job duties and pay but will be less detailed than a formal contract.
• Verbal agreement. Verbal or oral agreements, although legal, are the most difficult to enforce because there is no proof the contract existed. If one party can prove the terms of the contract however, New Jersey will uphold this type of agreement.

Types of New Jersey Employment Contracts

Employment contracts come in many forms based on the type of work the company does or the type of employee being hired to complete the job. The three most common types of employment contracts used in New Jersey include:

• Permanent employment contract. This contract is used by a company to hire a permanent employee with regular hours and an hourly wage or salary.
• Fixed term employment contract. Used when hiring employees to complete a specific job. Employment ends once the terms of the contract are met.
• Contractor agreement. When a company hires a contractor or a freelance worker this agreement lays out the terms and conditions for independent workers who are not employees of the company.