New York Employment Contract: Definition, Key Considerations

What is a New York Employment Contract?

A New York employment contract is a legally binding agreement that an employer and new employee use to define the roles and obligations of each party in the employment relationship. Employment contracts can be used when hiring temporary employees and contractors but are most often used for highly paid permanent employees.

It is common to include the following negotiated issues in a New York employment contract:

• Job title and duties
• Employment start date
• Compensation
• Benefits
• Working hours
• Vacation and time off
• Procedures for discipline and grievances
• Reasons for termination
• Non-compete and other restrictive clauses

The primary purpose of an employment contract is to protect the rights of the employer and the employee. New York is an “employment at will” state. This means without an employment contract employees can be terminated for any legal reason or no reason at all without notice. An employment contract will lay out specific reasons for termination that an employer must abide by which protects an employee’s job.

The restrictive covenants protect employers by prohibiting the employee from taking actions that could damage the company. Common restrictive covenants include non-compete agreements, non-disclosure agreements, and non-solicitation agreements.

Are Employment Contracts Enforceable in New York?

Employment contracts are only enforceable in New York if they are in writing and signed by both parties. The only exception to this rule is if the duration of employment is less than one year long. Contracts that can be completed in less than one year are not subject to the Statute of Frauds and therefore can be enforced without a written agreement.

For example, if a company verbally offers an employee a position for five years and the employee accepts, the agreement will not be enforced unless it is writing. If the employee begins working for this company, they will be considered an “at will” employee who can be fired at any time for any reason.

What Are the Legal Requirements for New York Employment Contracts?

New York requires employment contracts to be in writing and signed by both parties. To be legally binding, there must be an offer, acceptance, consideration, the intent to be bound, and mutual assent. Contracts that will be used for employment not exceeding one year can be oral contracts, but it is highly suggested that even short-term employment contracts be written and signed.

Non-compete agreements are also enforceable in New York but must meet a separate set of legal requirements. These requirements are:

1. The agreement must be necessary to protect the employer’s legitimate business interests
2. It cannot impose undue hardship on the employee
3. The contract cannot harm the public
4. It must be reasonable in duration and geographic boundaries

More information about New York employment and labor laws can be found in Chapter 31 of the Consolidated Laws of New York.

Types of New York Employment Contracts

There are several types of New York employment contracts. The contract used will be based on the purpose of the contract, the type of work the company does, and the type of employee hired.

Commonly used employment contracts 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, like seasonal workers, who work for a specific time period.
• Contractor agreement. Used when a company hires an independent contractor who is not a company employee to complete a job.
• N on-compete agreement . Prohibits employees from starting a business or working for a company that is direct competition of the employer.