Have you ever wondered if you signed a non-compete agreement when joining your current or past employer? Non-compete agreements, also known as “covenants not to compete,” are contracts between an employer and an employee that restrict the employee’s ability to work for a competitor or engage in a similar business for a certain period after leaving the company. Understanding whether you have signed a non-compete agreement is essential, as it can impact your future employment opportunities. In this comprehensive guide, we’ll help you identify, understand, and navigate the complexities of non-compete agreements.
How Do I Know If I Signed a Non Compete?
To determine if you’ve signed a non-compete agreement, carefully review your employment contract or any related documents for clauses or sections specifically labeled as “non-compete agreement” or containing language related to competition, business restrictions, or limitations on future employment. Key components to look for include duration, geographic scope, and restricted activities or industries. If you’re unsure about any terms or if you believe you’ve signed a non-compete, consult with a legal professional to fully understand the implications and potential restrictions on your career.
How to Identify a Non-Compete Agreement in Your Employment Contract
Reviewing Your Employment Contract for Non-Compete Clauses
Begin by reviewing your employment contract, specifically looking for any sections or documents labeled “non-compete agreement” or something similar. Sometimes, non-compete agreements are standalone documents, while other times, they may be incorporated into your overall employment contract.
Key Components of a Non-Compete Agreement
Duration: A non-compete agreement will typically specify the duration for which the restrictions apply. This can range from a few months to several years, depending on the industry and the company’s needs.
Geographic scope: Non-compete agreements often include a specific geographic area where the restrictions apply. This can be as broad as a country or as narrow as a city or even a specific neighborhood.
Restricted activities or industries: The agreement should clearly define the activities, industries, or roles that you are restricted from engaging in during the specified time frame.
Examples of Non-Compete Language
Non-compete language may vary, but some common phrases to look for include “covenant not to compete,” “non-competition,” “non-solicitation,” “restrictive covenant,” or “prohibited activities.”
Understanding the Legality and Enforceability of Non-Compete Agreements
Factors Affecting Enforceability of Non-Compete Agreements
Reasonableness of the terms: Courts generally consider the reasonableness of the terms in a non-compete agreement when determining its enforceability. Overly broad or restrictive terms may be deemed unenforceable.
Protecting legitimate business interests: Employers must demonstrate that the non-compete agreement serves to protect their legitimate business interests, such as trade secrets or client relationships.
The employee’s level of involvement and knowledge: The employee’s role and access to sensitive information within the company may also impact the enforceability of a non-compete agreement.
State-Specific Laws and Regulations on Non-Compete Agreements
States that enforce non-competes: Non-compete agreement enforcement varies by state. Some states, like California, are known for their strict limitations on non-compete agreements, while others, like Florida, tend to enforce them more readily.
States with restrictions or bans on non-competes: Some states have specific restrictions or outright bans on non-compete agreements, particularly for certain types of workers, such as hourly employees or independent contractors.
Tips for negotiating a non-compete before signing
Challenging a Non-Compete Agreement After Signing
Exploring legal grounds for invalidating the agreement: If you believe your non-compete agreement is unreasonable or unenforceable, consult with an attorney to explore potential legal grounds for challenging it.
Consulting an attorney: An experienced attorney can help you navigate the process of challenging a non-compete agreement and may be able to negotiate a more favorable outcome with your employer.
Settling out of court or pursuing litigation: Depending on your situation and the advice of your attorney, you may choose to settle the matter out of court or pursue litigation to challenge the non-compete agreement.
Avoiding Unintentional Violations of a Non-Compete Agreement
Reviewing and Understanding the Non-Compete Agreement
Ensure that you have read and understood the non-compete agreement before signing it. If you are unsure about any terms or conditions, seek clarification from your employer or consult with an attorney.
Seeking Clarification on Ambiguous Terms
If any terms within the agreement are unclear or ambiguous, ask your employer for clarification or consult with a legal professional to avoid misunderstandings and unintentional violations.
Being Cautious About Job Opportunities in Similar Industries
When seeking new employment, be cautious about accepting positions in similar industries or roles that may violate your non-compete agreement. Discuss the specifics of your non-compete with potential employers to avoid any conflicts.
Discussing Potential Conflicts with New Employers
Before accepting a new job, inform your new employer about any existing non-compete agreements to ensure that your new role does not conflict with the terms of your agreement.
Understanding Non-Compete Agreements for a Successful Career
Understanding if you’ve signed a non-compete agreement is crucial for navigating your career and avoiding potential legal complications. Be proactive in identifying and understanding the terms of any non-compete agreements you may have signed, and don’t hesitate to consult with legal professionals when in doubt. By staying informed and vigilant, you can protect your professional interests and maintain your career’s momentum.
https://www.chellelaw.com/wp-content/uploads/2020/01/cropped-favicon-1-300x300.png00adminhttps://www.chellelaw.com/wp-content/uploads/2020/01/cropped-favicon-1-300x300.pngadmin2023-04-08 22:41:002023-04-24 15:37:53How Do I Know If I Signed a Non Compete?
Is a letter of intent for a job or employment binding? The short answer is probably not when a professional is looking for a new position. The employer may state that before we give you an employment contract, we’d like you to sign a letter of intent or offer letter. And then, that letter of intent will outline the main points of the employment relationship. Normally, in a letter of intent, you’d have the term of the contract. So, how long does it last? Maybe it terminates? What is the length of notice required if it is terminated without cause? Indeed, it will have compensation details like base salary, productivity bonuses, and commission percentage.
Letter of Intent for a Job
A letter of intent for a job, also known as a letter of interest, is a powerful tool that complements a resume by highlighting the candidate’s qualifications, skills, and enthusiasm for a specific position within a company. This document serves as an introduction to the employer, demonstrating the candidate’s understanding of the organization’s goals and values, and showcasing how their experience and expertise align with the job requirements.
The primary purpose of a letter of intent is to make a strong impression on the hiring manager, setting the candidate apart from other applicants by emphasizing their genuine passion for the role and the company. In addition to showcasing relevant skills and experience, the letter should also convey the candidate’s unique attributes and personal qualities that make them an ideal fit for the position. By crafting a well-written and persuasive letter of intent, job seekers can significantly increase their chances of capturing the attention of prospective employers and securing an interview.
Letter of Intent vs Offer Letter
A letter of intent and an offer letter are distinct documents that serve different purposes during the job application and hiring process. A letter of intent, similar to a cover letter, is submitted by the candidate to the employer, showcasing their qualifications, skills, and enthusiasm for the position. This letter demonstrates the applicant’s understanding of the company’s goals and how their expertise aligns with the job requirements, aiming to leave a strong impression on the hiring manager.
On the other hand, an offer letter is a formal document issued by the employer to the candidate, outlining the specifics of the job offer, including the position title, start date, salary, benefits, work hours, and any onboarding or training requirements. The offer letter serves as a written confirmation of the employer’s intention to hire the candidate and forms the basis of a legally binding agreement between both parties once it is signed.
In summary, while a letter of intent is written by the candidate to express their interest in a job and persuade the employer of their suitability, an offer letter is provided by the employer to officially extend a job offer and detail the terms and conditions of employment.
Is an Offer Letter Binding?
An offer letter, when signed by both the employer and the candidate, can become a legally binding document, depending on the language and terms outlined within it. The offer letter typically includes essential details such as the position title, start date, salary, benefits, and other conditions of employment, which can form the basis of an employment agreement between both parties.
However, it is essential to note that not all offer letters are binding, and the degree of enforceability depends on the specific terms and conditions mentioned in the document. Some offer letters may be contingent upon certain requirements, such as passing a background check or drug screening, while others may have clauses that allow either party to terminate the employment relationship at any time.
To determine if an offer letter is legally binding, it is advisable to consult with a legal professional who can review the document and provide guidance on its enforceability. In summary, an offer letter can be binding when signed by both parties and containing clear, enforceable terms, but the specific conditions within the letter ultimately dictate the extent of its legal obligations.
What May Affect the Details in a Contract?
Well, the details in a contract can significantly change when provided with more context. For instance, if the offer letter states, let’s discuss the non-compete. It may be two years and 10 miles from your primary practice location, in sales, from your sales territory, or something like that. And then, when you investigate the agreement. It may be much more prohibitive because you can’t only work in your specialty, but you also can’t work in sales in this area if you’re selling software or something like that. Then normally, non-competes would apply only to software. So, you could switch industries for a brief period and then come back if you wanted to.
However, suppose the language says you can’t work in sales during this period within a 10-mile radius or something. In that case, that could substantially change the job. Or perhaps, if there are some commission-based bonuses, it may state that if the contract terminates, A professional won’t receive any of those bonuses if they don’t get paid. And so, someone could work for an entire year, earn bonuses, and then maybe leave in month 10 of the year. They get nothing as far as bonuses go. These are a few reasons someone would be okay with an offer letter. Then maybe not with the employment agreement. Unless specifically stated in the offer letter, the professional is not bound by language that states a binding document in some way.
What Happens When Change of Mind After Signing an Offer Letter?
It is exceedingly rare to see an offer letter with that language. Generally, it’s just, here are the basic terms of employment. Then it moves forward to an employment agreement. Until the professional signs the employment agreement. It’s still mostly a handshake. Other times, if someone received an offer letter. Find a new and better position and pay more. They’ll say, I’m not going to entertain this job anymore. I’m going to move out. In that scenario, if someone wanted to back out after signing an offer letter. Then you need to say warmly, this isn’t going to work out for me. I will pursue a different opportunity, appreciate the consideration and move on. You don’t need to give any explanation if you don’t want to, as far as why you’re doing that.
Generally, offer letters or letters of intent is not binding. And the professional is free to continue looking. Now, the last consideration is some bad blood may pop up after someone pulls out after signing an offer letter. As I said before, try to be professional and cordial about letting them know that you’re not going to move forward with that employment agreement. However, this is business; most companies understand that people sometimes change. Their minds in a competitive job environment. I wouldn’t be that concerned about that. But it may happen, so you want to avoid burning bridges if possible.
Employment Agreement for Physicians: Is a Physician Letter of Intent Binding?
In the employment arena, these letters of intent go far. We’d have an employment agreement if you signed the letter of intent. That would start with a new job. Briefly, in general, is a letter of intent binding? No. The only way a letter of intent would be binding is if there is a language that states this letter of intent is binding. I don’t recall seeing something like that before. The reason why it’s essential for the physician not to sign a letter of intent that states binding. Because in the employment agreement, the actual long contract that the physician gets sometimes can be substantially different. Maybe the context provided by the employment agreement can do a job. A job which, at the basic level, seemed great. Then once you read the fine print, it’s not so great.
Before You Sign an Offer Letter
So, it’s always important for the physician to know. It is Even if you come to terms on the letter of intent like compensation, benefits, bonuses, termination notice, or non-compete. Even if you agree to all those things, getting the employment agreement is different. Either the terms are substantially different, or perhaps the way they worded them made them substantially different. In that scenario, don’t sign the employment agreement. Due to those factors, you can always negotiate, even after you sign a letter of intent. Maybe the letter of intent states yes. A non-compete lasts one year, but it doesn’t list the geographic limitation. You get the contract, saying it’s a one-year non-compete. Okay, great. And then it says, but it’s 50 miles from every location the employer has in the state or something crazy like that.
Well, no physician will sign, or at least they shouldn’t, a non-compete like that. Although the letter of intent is okay at first glance, this is a one-year non-compete. That seems fair. But it’s not so fair when you get into the details of it. Or perhaps there’s language about productivity. In this case, maybe you get 25% of net-collections over a certain amount you collect in a month. Okay, well, that sounds great.
And then you talked to the employer about the volume, meaning. What’s the average a physician makes in my specialty here? And they say no one’s ever got the productivity bonus. Okay, that looks great on 11 and 10, but in practice, not so great. Or maybe in the agreement, they say it’s an initial one-year term. But then, when you investigate the agreement’s language, it automatically renews.
Is a Letter of Intent Still a Binding Employment Contract?
There’s no ability to terminate the contract without cause. Then the physician theoretically could just be stuck in a loop without the ability to get out of the contract. That’s just something that physicians must work out in advance. So, is a letter of intent binding for a physician? Typically, no, it’s not.
If there is a language that states it is binding, run the other way and get a new job that isn’t trying to take advantage of you. Someone would rarely put language in there without in-depth understanding. Most business owners are at least savvy enough. To understand that forcing someone to sign a binding letter of intent without seeing the actual employment contract is terrible. So, anyway, keep that in mind before you sign anything.
Is a Letter of Intent for Employment Binding?
The short answer is probably not. It is how the process would work when a professional is looking for a new position. The employer may state before they give you an employment contract. They’d like you to sign a letter of intent, also referred to as an offer letter. And then, that letter of intent will outline the main points of the employment relationship. Normally, in a letter of intent, you’d have the term of the contract. So, how long does it last? Maybe how can it be terminated? If it has without cause termination, what’s the length of notice needed. Certainly, it’s going to have compensation details. These include base salary, productivity bonuses, and commission percentage, which will also be listed.
What to Look on Sample Physician Letter of Intent
Maybe a brief description of the benefits. And then if there’s a non-compete involved if it’s a healthcare contract. Perhaps some details about malpractice insurance. Kind of quick bullet points of, alright, this is what we expect the employment relationship to be. And at that point, there may be some negotiation between the professional and the employer. For instance, if the professional wants a higher base salary or a higher percentage of collections, or whatever it is, that’s the time to negotiate. And then, once it reaches an agreement, the professional signs the offer letter. Generally, the company will as well. And then, at that point, the company will usually prepare an actual employment agreement with the binding terms. What are some reasons why someone would back out after signing an offer letter?
Well, providing more context, a contract’s details can significantly change. For instance, if the offer letter states, let’s discuss the non-compete. It may state, oh, it’s two years and 10 miles from your primary practice location. In sales, from your sales territory, something like that. And then, when you investigate the agreement. It may be much more prohibitive in that you can’t. Not only work in your specialty, but you can’t work in sales in this area if you’re selling software or something like that. Typically, non-competes would apply only to software. So, you could switch industries for a brief period and then come back if you wanted to.
Can you Negotiate After Signing a Letter of Intent?
Can a professional negotiate after signing a letter of intent? In short, yes, obviously, you can. Let’s talk about what a letter of intent is. The differences between that and an employment contract. Then the areas of negotiation after that. A letter of intent, also called an offer letter, is simply a brief letter outlining the employment relationship’s main terms. Normally, it would be the term of the agreement. So how long does it last if there’s without cause termination? What is the notice requirement? Any compensation detail like base salary. Those details will be in some productivity, commission-based, net collections.
Maybe a brief description of the benefits: health, vision, dental, life, disability, retirement, that type of thing. And then, if there are any restrictive covenants, a non-compete, a non-solicit, something like that. And if they’re a healthcare provider, if there’s what malpractice insurance offers. Suppose they must pay for tail insurance. There’s just a brief description of the main points of the contract. And so, the employer, if they do make the professional sign a letter of intent in advance. Once they get those locked in before offering an employment contract. Many employers will go straight to the employment contract. Maybe they’ll have a brief discussion with the potential employee. About, alright, here’s what we’re thinking about all those things. And then, if there is verbal agreement from the professional, yes, I’m okay with those.
Negotiating for an Employment Agreement
Let’s move forward with an employment agreement. The employer will then present the employment agreement, and negotiation can occur. Suppose you have agreed on the terms of offer letters or a letters of intent. In that case, you certainly can negotiate once you receive the employment contract for several reasons. Suppose the offer letter briefly describes the employment relationship terms when you have seen the actual language many times. In that case, it can completely change what you were expecting. For instance, there will be a non-compete in the agreement that doesn’t give the description. Then when you read the terms of the non-compete, instead of expecting maybe a one-year non-compete with a 10-mile radius, it’s a three-year non-compete with a 50-mile radius.
So, that substantially changes whether an offer is worth it or not. And often, if there is foul language in the agreement, it can also shift the compensation. For instance, let’s say a professional is okay making 200,000 a year. But if they have these bad restrictive covenants after the contract ends, 200,000 may not be worth it. Maybe they’ll say if I’m going to accept these restrictive covenants. Then I need more compensation during the year to make it worthwhile. Although you’ve agreed on the terms of the offer letter. It doesn’t mean you can’t return to the employer unless explicitly stated in the offer letter. The letter of intent that it is binding, which rarely happens.
Reasonable Considerations in an Employment Contract
Normally, that would only happen in maybe an academic position. You’re free to negotiate up until signing the employment agreement. Now, it may tick off the employer that you agreed to essential terms. Then after the fact. You came back at them and said, I know we agreed to this, but we need to revisit this. However, no professional wants to enter an employment relationship where they’re unhappy with the terms. Better to risk off the employer with terms that favor the employee versus just accepting an agreement that you’re unhappy. And usually, that’s going to spiral. Let’s say, alright, well, I agreed to terms in the offer letter. It does change once I read the actual employment agreement. And then, at that point, I’m like, ah, I don’t want to go back to them.
I’m just stuck with it. Well, you will have, or at least you will likely have. Some negative attitude spills over once you begin with the employer. And maybe you’re always thinking, ah, I’m underpaid, or this non-compete is bad, or the benefits are below what I was expecting. So, even if you risk the employer being annoyed by continued negotiation. The professional is free to continue, and they should. The bonus structure is good if it’s a reasonable offer and the salary is good. Then you continuously come back to the employer asking for more and more. At some point, they’ll yank the offer and move elsewhere. That’s always a consideration when talking to a professional about negotiating a contract. Yes, we want to ask for more, but it needs to be reasonable.
When Can an Employer Yank the Offers?
Suppose you’re asking for insane increases in certain things many times. In that case. I can tell the professional, look, if you come back at them with these things, they’re going to say no. They’re likely going to yank the offers just because you’re coming off as unreasonable. So, it’s good to know the industry standards in all those terms. That way, when you ask for the increases, you have some backing of. Well, these are the industry standards. And if you don’t want to meet the industry standard. I’m going to move on to a better opportunity. So, yes, you can negotiate after signing a letter of intent or an offer letter. And, in fact, you probably should. Once you read the language of the employment agreement, it changes the opportunity.
Can You Reject a Letter of Intent?
Can you reject a letter of intent? The quick answer is yes. You certainly can, and should, if you’re unhappy with the terms of it. A letter of intent, also known as an offer letter, can be provided once negotiations or discussions about a position move forward. Normally, it would work if a potential candidate would find out about a job. Either through a job listing or word of mouth, or maybe they were reached out through a recruiter. There’s a discussion of the main point of the position. Like the salary, benefits, that type of thing, and location. And once there’s interest on both sides, many employers will offer the letter of intent or the offer letter.
And that is a description of the main points of the employment relationship. In most offer letters, there will be the start date, location, and contract length. This is called the term, maybe a brief discussion on how both parties can terminate the contract, compensation, so is there a base salary? Are there bonus opportunities? Is it net collections, commission-based RVUs? It would be a brief description. It wouldn’t go into a long four paragraphs about comp. If malpractice insurance is necessary, who pays for that, and then who pays for the tail insurance if that’s necessary? Are there restrictive covenants? The restrictive covenants are normally a non-disparagement, a non-solicit, a non-compete, and it might go through briefly like this is how long go last.
What Is Inside an Offer Letter?
And maybe this is the geographic restriction associated with the non-compete and then a brief description of the benefits like health, vision, life, dental, disability, retirement, and maybe expenses. What expenses is the employer going to pay for? That’s what would normally be in an offer letter. The candidate, when viewing this letter, if the terms of it are unfavorable, or maybe not what the candidate was looking for, they can say, no, I’m not interested in this. I’m not going to sign this. I wouldn’t suggest just saying, no, I’m not taking this job. Take a hike. It would simply make sense to counter. You can say, I’m not going to sign this offer letter. However, these things would make this opportunity good for me.
So, if you’re offering a 200-base salary, then maybe I want 250 or a signing bonus of 10,000, and I want a 20,000-signing bonus. And will you provide relocation assistance if I move into a new city? These are all things that employees should do at this stage. And even though a professional gives an offer letter. It doesn’t mean that’s the end of it. And then, even further, if you come to terms with the offer letter, what will then follow will be an employment agreement. Even if you sign another offer letter unless there’s the language that says this is a binding offer letter. You can change no terms, which you will never see. Once you get the employment agreement, you can still negotiate terms.
Why Is it Important to Understand the Industry Standards?
So, you need to think strategically, alright? I would suggest never signing an employment agreement that you’re unhappy with. Even if you reject the offer letter and decline the employment agreement, it doesn’t mean that the negotiation is over. Suppose the professional is reasonable in what they’re asking for. In that case, I find most employers expect at least some negotiation when they’re bringing in new candidates. I mean, it is the expectation. But once again, if they’re reasonable. Suppose someone is asking for a 200% increase in base salary. In that case, the employer is likely going to, look, you are delusional, and we will move on to a different candidate. So, it helps the professional understand the industry standards in their profession. That way, they can ask for reasonable changes to the contract. There are also many times when you’ll get brief details in the offer letter.
Then when you see the actual written language in the agreement. It substantially changes what it looked like in the offer letter. Maybe if it just briefly mentions there will be a non-compete. Once you review the employment agreement, it’s a terrible non-compete. Maybe you are expecting a one-year non-compete, and they offer three, or you’re expecting a small geographic radius of 10 miles. They came back with a hundred, or something like that. That can change from “yes, this is a great offer” to “there’s no chance I would ever accept this job.” So, there can be negotiation throughout the process until the professional signs the employment agreement. At that point, those are the terms. It would be best if you made certain before you sign anything that you’re okay with what is in agreement. Then understand there will be obligations after the employment relationship ends.
Can a Physician Negotiate After Signing a Letter of Intent?
Can a physician negotiate after signing a letter of intent? The letter of intent is also known as an offer letter. The normal recruitment process would be close to the end of their residency or fellowship. And then, most people find a job through one of three ways: either word of mouth amongst colleagues or mentors, a physician recruiter can reach out to them. And say here’s a position that might fit your needs. Then initiate the process that way, or the physician can always find job opportunities through job listings on the internet. Once the process has been initiated and the physician is discussing it with the physician recruiter. Such as the terms of the relationship, salary, bonus opportunity, locations, that type of thing. Many employers will then ask the physician to sign the letter of intent.
Basics in an Offer Letter
The letters of intent is just the basic structure of the employment relationship: start date, location, and contract length. Which is known as the term, how both parties can terminate the contract, compensation. So what’s the base salary? Is it RVU production? What are the thresholds? Is it a collection? What’s the net collection percentage? And then, the restrictive covenants, non-solicit, what are the terms of the non-compete? And then usually, the basic benefits, so what do they offer in terms of health, vision, dental, life, disability, retirement? What does the employer pay for continuing medical education, licensing fees, DEA registration, association, and societies?
Just basic things. These are all the things we’re going to provide to you. Now, some letters of intent are more detailed than others. Still, if a physician is okay with the general terms of the offer letter. Then, the employer will say, we need you to sign the offer letter. And then, at that point, we will get the employment agreement drafted, and then they’ll offer the physician the employment agreement. Is the offer letter or letter of intent binding? The answer is no, unless there’s language there that says it is binding. You rarely find a letter of intent stating this is a binding document. For several reasons, it doesn’t make sense for a physician to sign that under any scenario.
When Should a Physician Decline an Employment Agreement?
Basic terms in an offer letter with no context or explanation can change substantially. Once we can see the actual language of the employment agreement. Maybe they will state it in the offer letter. There is a non-compete, but there’s no description of it. Well, perhaps you read the employment agreement, and you’re expecting a one-year non-compete. They say it’s three years, or you’re expecting a 10-mile restriction geographically, but it’s 50. The initial offer letter may look like, okay, a non-compete, well, that’s expected for a physician. But once you read the terms, it goes from being reasonable and okay to be completely unreasonable. In that scenario, although the physician signed the offer letter, they do not need to go through with signing the employment agreement.
And then, I would also suggest that even though the physician has come to terms with the offer letter. It doesn’t stop them from renegotiating the terms before signing the employment agreement. As I said before, once one reviews the actual language of the contract. It can completely change someone’s perception of a job. I’m willing to make a smaller base salary if the non-compete is not as restrictive when I leave. Or let’s say you have a claims-made malpractice policy and the employer is saying. We will pay for your tail insurance once you go. They might be willing to accept a smaller base because the employer will pay tail insurance. Then when you look, and you get the employment agreement, the language states the employee must cover their tail.
Negotiating the Terms Before the Employment Agreement
Maybe depending upon specialty, that could be a significant amount of money. And then the physician may say, well, I had no idea I had to pay $50,000 tail insurance. Therefore, I want a more extensive base salary to offset that. So, even after the physician signs the letter of intent, they certainly can continue negotiating once they see the actual terms of the employment agreement. Now, a couple of considerations: it’s not bad form to go back and renegotiate terms. However, some employers may get ticked off when the physician agrees to the offer letter terms and then return to renegotiate those terms. It can be off-putting to some employers. However, if the physician frames it in, well, you said that I would have this, and I expected this to be kind of industry-standard, but once I saw the language, it wasn’t.
For instance, there are normally 60 to 90 days without cause termination. This means either party can terminate the agreement for any reason, with a certain amount of notice to the other. So, they’re expecting a 60-day without cause termination notice. And then the employer says, you have to give us a one-year notice. Well, that’s insane! No physician should agree to that. And they absolutely should renegotiate the terms once they see the actual language in the employment agreement. No physician should sign a contract that they’re either unwilling to meet the terms or are significantly unhappy with before starting the job. There will always be push and pull when it comes to a contract. There is no perfect contract. It doesn’t exist. There will be things that the physician has to relent on that maybe they’re unhappy with.
Fair Negotiation
And maybe the employer has to relent as far as compensation goes or have to pay tail insurance. Or any of the things I’ve already discussed. But, if both sides feel relatively bad about the agreement. It usually means it was a fair negotiation. If one side is super happy, it usually means the other side is not. So, don’t sign an offer letter if you’re not happy with the terms. But even if you sign an offer letter that you’re okay with doesn’t mean you can’t renegotiate the terms after the fact. Now, lose out on an opportunity if you do that. An employer could theoretically pull a job offer. But in that scenario, I don’t think it’s worth moving forward because you don’t want to tick off an employer. It doesn’t make sense.
Physician Negotiating an Offer Letter in an Agreement
Can you reject a letter of intent? The quick answer is yes, you certainly can, and should, if you’re unhappy with the terms of it. Letters of intent, also known as an offer letter, can be provided once negotiations or discussions about a position move forward. Normally, it would work if a potential candidate would find out about a job. Either through a job listing or word of mouth. Or maybe they were reached out through a recruiter. There’s a discussion of the main point of the position. Like the salary, benefits, that type of thing, and location. And once there’s interest on both sides, many employers will offer the letter of intent or the offer letter.
And that is a description of the main points of the employment relationship. In a letter of intent for a job, the contract’s start date, location, and length will be included. This is referred to as the term; perhaps a brief discussion about how both parties can terminate the contract with compensation would be beneficial. So is there a base salary? Are there bonus opportunities? Is it net collections, or commission-based RVUs? It would be a brief description. It would not go into a lengthy four-paragraph discussion of comp. If malpractice insurance is necessary, who pays for that. And then who pays for the tail insurance if that’s necessary? Are there restrictive covenants? The restrictive covenants are typically non-disparagement, non-solicitation, and non-compete, and they may be reviewed briefly as if this is how long they will last.
https://www.chellelaw.com/wp-content/uploads/2022/04/is-a-letter-of-intent-for-employ.jpg7201280adminhttps://www.chellelaw.com/wp-content/uploads/2020/01/cropped-favicon-1-300x300.pngadmin2022-11-29 20:50:302023-09-01 15:44:04Letter of Intent for a Job (Is it BINDING?)
How should PTO or paid time off be reflected in your employment agreement? First, let’s talk about what PTO is. Is it customary that you do receive it? I will say, specifically, with dental employment agreements, sometimes you are not given PTO time. It’s considered unpaid time off. Sometimes also, if you are a healthcare provider and your compensation is based on collections, occasionally, you will receive unpaid time off. It should be listed though in your employment agreement. Normally it is under the benefits section where it addresses it. I do feel like it’s important that your agreement does specify how much PTO or unpaid time off you receive.
PTO Policies: Vacation, Paid Time and PTO Tracking
Occasionally it will refer to a company policy, but policies can change. Your employment agreement cannot be changed unless both parties consent and it’s in writing. So, it’s just better, in my opinion, that your PTO time is actually reflected in the employment agreement itself. Then let’s talk about how it is stated in your contract. Most of the time in the contracts, it does say PTO or paid time off. Occasionally it can be called vacation time or time off. Again, you want to verify though, that you’re compensated when you’re taking this time off. And then, is the PTO time reflected in hours, days, or weeks? This is also important if you have a sort of hybrid schedule. If you have a normal work schedule where you’re working eight hours five times a week, 40 hours a week, that’s easy to figure out if it says weeks, days, or hours.
PTO Days vs Paid Time Hours
However, if you’re a healthcare provider and have sort of a hybrid schedule where you may be working 10-hour shifts, or you’re working 12-hour shifts or even 24-hour shifts, those change the way PTO might be figured out. I have seen some issues with clients in the past who have signed a contract, and their contract states that they have 20 days of PTO time. However, the days are not defined, and the company interprets that as eight-hour days, not 10-hour days or 12-hour days. And so, therefore, the PTO that you’re expecting to receive is much less. That’s why if you have a non-traditional schedule and it’s not eight-hour shifts, it’s better, in my opinion, that PTO time is reflected in hours.
Review PTO on your Employment Contract
Also, I think it’s important if you’re unsure of how they figure out how much a day is, you can also ask for them to provide you with any policies they currently have for PTO for their providers. There also may be more details in there, so there’s a clear expectation whenever you are commencing your employment. The other thing to note is if you do have sort of longer shifts, like 4/10, or you have 12-hour shifts, or sometimes when you have a week on or a week off, your PTO time may be limited. Especially if it’s a week on or a week off, you may not actually have any PTO time because they expect you to use that time when you’re off schedule to take your vacations or use that for your own personal time. But again, you should always read your employment contract very carefully to know what your schedule is going to look like, and then when you read your PTO and how much you received, you should be able to understand that completely.
How Much Paid Time Off Should a Physician Assistant Get? | PA Paid Time
How much paid time off should a physician assistant get? What is the industry standard as far as time off goes? Well, first, you’re only going to get paid time off if you are an employee. If you are an independent contractor and receive a 1099 at the end of the year, it is very unlikely that you’re going to be given any paid time off at all. There are many PAs that work as independent contractors, especially those in the surgical specialties. They are only working sporadically, maybe a couple of weekends a month, or even only a couple of days a month. And in that scenario, if you’re an independent contractor, you are not going to get paid time off. This discussion will be about employed physician assistants who receive normal paid time off as part of their professional benefits offered.
Physician Assistant PTO Receive
Paid time off is broken down into four categories: vacation, sick days, holidays, and then continuing education. And most employers will then give a certain number of days for each of those things. There are other employers, especially if you’re working for maybe a big hospital or hospital network, where they’ll have what’s called a pure PTO system. And in that system, there’s basically one giant bucket of time. And then any time you’re out of the office, you take that out of the bucket, it doesn’t matter what you’ve gone for. It doesn’t matter if it’s sick days or you’re on vacation, or you’re doing continuing education. If you’re not in the office, you’re taking time out of that one bucket. Now, if it’s not like that, let’s break down what’s kind of normal for each of those. The total time off for a PA should be somewhere between like 20 to 30 days.
How Much Paid Time Off Should a Nurse Practitioner Get? | Paid Vacation Days
How much PTO should a nurse practitioner receive? The short answer is, it really varies based upon what is offered in your professional benefits package. And it really depends on how long you’ve been there. Have you accumulated seniority? Have you been practicing for a long period of time? Where are you in the country? It really depends on a plethora of factors, but some things to really consider that I see honestly day to day with PTO is if you have a four-day work week, sometimes your PTO is less than it would normally be. And that’s just the employer thinking that because you have an extra day off every week, therefore you’re entitled to less PTO.
Comprehensive Nurse Practitioner Benefits Package
I would disagree with this, so it’s something that you would maybe want to advocate and double-check. Also, another thing you want to consider is what is in your PTO amount of time, sometimes you’re given just several days and that includes vacations, holidays, CEs or continuing education, and sick time. When you get that initial number of PTO, it looks great. You’re like, wow, going on vacation, but you want to be careful because you need to see what’s included in your PTO time. You should always receive PTO for continuing your education. And that should be an additional three to five days. You also want to account for all of your national holidays, you should have that time off, or you should be compensated for working on those holidays, additional compensation. And then normally, it’s anywhere from like three to five weeks, I would say is average starting out.
And then it just kind of goes up from there. But just to recap, you just want to know how much and what’s included, because it can get a little tricky. Another thing I see with PTO is your schedules in days and sometimes your shifts vary on how many hours; is it 10 hours and eight hours? But PTO is in days, so that gets a little confusing. Are those eight-hour days you’re being compensated for or 10-hour days? You don’t know. And then also, again, if you have a four-day work week, but you have three to four weeks off, is that including the four days or five days? So, it gets a little confusing. However, your schedule is broken down, if it’s broken down to how many hours or how many days per week, it’s customary that your PTO should be broken down in this same amount of time.
Vacation and Paid Time Off for Dentist Employee
You must ensure that the contract states how much time you get. And what part of that total number corresponds to the vacation, sick days, holidays, and CE. Some places use a pure PTO system, meaning everything comes from the same bucket. So, if you’ve gone from the office for whatever reason, it’s a holiday. You’re continuing education. You’re sick, or you’re on vacation, it doesn’t matter. Everything comes out of that bucket.
But others specify, and this is the most common way, exactly how many days you get for each thing. Let’s break down those four elements. Regarding vacation, most dental associates will get somewhere between 10 to 15 days of vacation. If they offer you five days of vacation, that is not enough. So, somewhere between 10 to 15 days paid vacation.
How Many Sick Days Can Dentists Take?
Sick days can vary by state. Some states have an actual law that states that if you’re a full-time employee, you get this many sick days. There are other states where it’s ambiguous. Normally, most places offer somewhere between 3 to 5 sick days, or they might lump it into the vacation. But that’s a reasonable amount. Regarding federal holidays, in most places, 6 or 7 federal holidays per year. That’s easy to understand. And then continuing education, once again, somewhere between 3 to 5 days. time
How Much Paid Time Off Should You Aim For?
A dental associate should aim for somewhere between 20 to 30 total days of time off. When you add up those four things, it should be somewhere between 20 to 30 days. If you’re not within that range, I mean if you’re beyond that range, great, good for you. If you’re not getting the 20 days adding all that up, you’re not getting enough time off. Or at least you’re not getting enough time off compared to your peers, so you need to ask for more.
How Much Vacation Time Do Doctors Get?
How much vacation time do doctors get? Let’s break down what is considered time off and then what is normal. First, I find that many people lump everything into vacation, meaning just any time away from work. No one lumps it like that. It’s generally thought of as paid time off or PTO. And then there are four things that go into paid time off. You do have vacation time, you have sick days, you have holidays, and then you have continuing medical education. Those four things all go into the pot for paid time off. And then that determines how much time off you get.
Normal Amount of Vacation Time Physicians Should Receive
The average physician gets around 30 days of total time off. So, when you add up, let’s just say a normal amount would be 15 days of vacation and five sick days. Now, many states have actual laws in place that dictate how many sick days an individual can get. I would check into that prior to figuring out how much actual time off you get. You’ll usually get somewhere between three to five days for CME and around seven to eight federal holidays. It depends upon the office and then also the call responsibilities of the physician. And this is specialty-dependent, so when I say the average amount, I’m just taking the average amount across all specialties, around 30 days.
If you’re getting less than that, it’s probably not enough. And certainly, if you’re getting 20 days, that’s well below average if you add everything up. Now, there are some specialties that get a significant amount of more than 30 days. Radiology and anesthesiology, for whatever reason, tend to get much more. Obviously, if you’re doing shift work, so if you’re in the ED or a hospitalist, many of you won’t get any time off. So, if you’re seven-on/seven-off, your time off is the week that you have off, and you’re not going to get any additional paid time off. However, I have seen recently, which I’ve never seen before, a few hospitalist jobs that are offering paid time off in addition to the time off that they get, which I think is abnormal but obviously great for the hospitalist.
https://www.chellelaw.com/wp-content/uploads/2023/01/what-is-a-standard-pto-policy-in.jpg7201280adminhttps://www.chellelaw.com/wp-content/uploads/2020/01/cropped-favicon-1-300x300.pngadmin2022-11-03 15:52:212023-04-06 15:36:19What is a Standard PTO Policy in an Employment Contract?
What should an offer letter include? There will be jobs that just provide an offer letter with no employment agreement to follow. Then there will be other jobs where they will send the offer letter, expect the professional to sign it, essentially agreeing to the terms of the offer letter, and then they’ll provide an employment agreement with the details of the employment relationship.
What is in an Offer letter?
What is normally in an offer letter? An obvious thing, So, compensation, bonus structure, benefits offered if it’s a healthcare position, the malpractice insurance obligations, maybe some language about the restrictive covenants such as non-compete and non-solicitation agreement, how long the contract lasts, and how it can be terminated, but in a very brief, like one sentence “this is what’s going to be” manner.
If you’re okay with what’s listed in the offer letter, most people would sign it, send it back, and then the employer would work on getting an employment agreement together and then send it off to the professional for review. If you sign an offer letter, it doesn’t mean you’re stuck with everything you agreed to if, in a review of the employment agreement, things substantially have changed, meaning the fine print may not look as great as it looked in the offer letter. So, if you’ve signed an offer letter, unless it states it’s somehow binding in some way, which almost none of them ever are, you’re still free to negotiate after you’ve signed the offer letter. Now, the employer may take umbrage with this and say, well, look, you’ve already agreed to these terms. But look, if they say your base comp is 150,000, but when you start reading it, it’s maybe partially based upon production or fully based on production after a certain period, it can change your outlook on the position.
Paying for the Insurance
The same thing goes if they’re paying for your insurance if you’re a healthcare provider. They’re going to pay your underlying premium, but maybe you must pay for tail insurance after the contract ends, which can be a significant expense for some. Now, if you’re in a position where you’re just signing the offer letter, and there’s no contract to follow, I know for most lawyers, almost no lawyer signs an employment agreement. It’s all based on, they send you an offer letter, this is how much you’re going to make, and then that’s it. Then you start the job, and that’s what you’re going off is that offer letter.
Negotiate in Advance
So, you certainly want to negotiate in advance. However, if you have signed the offer letter and you’re still getting an employment agreement, you’re not stuck. You can still negotiate. And then, ultimately, if you decide not to sign the employment agreement, they can’t force you to start work. You just move on. And that’s just how business goes. Once again, the things you want in the offer letter are the things that are important to you. The compensation, the benefits, which are like time off, health, vision, dental, life, and disability, are they going to pay for your licensing dues and fees? That type of thing. How long the contract lasts, how you can get out of it, and how much notice you have to provide. And then the restrictive covenants like the non-compete, non-solicit, non-disparagement, and the terms of that.
If you want to know about the non-compete, the briefest way possible is one year, five miles from your primary practice location, or something like that. And then, the employment agreement will have the actual details of it. You should never sign a non-compete that is extraordinarily brief. It has to be spelled out. It normally would take up at least a page of a contract to get the details correct. So, that’s what should go in an offer letter.
What Happens After You Sign an Offer Letter?
There are two main distinctions. A professional could receive an offer letter, and that’s it. No employment contract follows. It’s just you agree to the terms of the offer letter, and then you start the job. And then, the second way would be the employer asking the potential employee to sign an offer letter, agreeing to basic terms. And then, they’ll incorporate those terms into an employment agreement and offer the employment agreement to the prospective employee. Then that person must decide if they want to sign the employment agreement and move forward with the relationship.
Let’s first go with if you begin an offer letter with no employment agreement to follow. In that scenario, you’re most likely in an at-will employment relationship. This means that the agreement or the employment relationship may terminate at any time, for any reason. This is with no notice unless specifically stated in the offer letter. For the most part, there wouldn’t be any restrictive covenants that follow when the employment relationship ends. Restrictive covenants could include a non-solicitation agreement and a non-compete.
Those are the two most common or the two that matter the most for most employees. They provide you with an offer letter that goes through basic things if you negotiate. Such as compensation, benefits, and start date, and that’s about it. I would say most licensed professionals usually would sign employment agreements. Attorneys don’t, for the most part, but almost anyone in healthcare, physicians, nurse practitioners, PAs, vets, chiropractors, and dentists, always sign employment agreements.
Not Required to Take on an Offer You Signed
Let’s say you’re in another situation where they give you an offer letter, and you agree to the terms. Then they’ll follow up on the employment agreement. Many people ask, alright, what if I’ve signed the offer letter? But when they give me the employment agreement, it doesn’t look great. Do I have to go through with the job? The answer is no. Unless there’s strange language in the offer letter that states it’s binding, which would seldom happen if they follow up with an employment agreement. You can still negotiate terms.
Let me give you an example. Let’s say the offer letter states there’s a non-compete, but it doesn’t have any details. So, you get the contract and then look in the non-compete, and it’s five years and covers an entire state. Like you will have to move out of the state if you want to continue in your profession. Well, that’s not a reasonable non-compete. But that could make a job that may have looked great at a hundred thousand a year be only worth 200,000 a year. That is if you accept that terrible non-compete.
Provide Context for Disputing Job Offer
Even if you’ve accepted the terms of the offer letter, it doesn’t mean you have to go through and execute the employment agreement. The employer will probably talk about you agreeing to the terms, and now you’re returning to us. So, it is most effective if you provide some context as to why it looked good initially. Still, after reading the actual details of the employment agreement, it’s not so good.
I think most smart employers can understand that and appreciate that. If you just come back at them and say, no, now I want to double the salary, the bonus, or whatever. Without providing context, I assume the employer will not be pleased with that and may even pull the offer. So, what happens when you sign an offer letter? First, an employment agreement will likely follow, and then you’ll have to determine if you want to go through with that, or they’ll give you the offer letter. It’s an at-will relationship; you can leave at any time, and there likely aren’t any strings attached.
Can Offer Letters be Revoked?
I’m going to talk about a scenario where an employer would say. I need you to sign this offer letter.” Once we have the signed offer letter, we will follow up with an employment agreement. It is not a scenario where they give you an offer letter, and that’s it. There are some industries, I mean, I’m a lawyer. I know in most law firm environments, none of us sign employment contracts. Almost all of us are just at-will employees, and we get an offer letter that goes through the terms, and that’s it. You will have an employment contract in many other industries, especially healthcare and sales. It states how the employment relationship will be handled with compensation, benefits, termination, malpractice insurance, and restrictive covenants. It details the kind of the relationship’s nuts and bolts.
A Rescinded Job Offer is Exceedingly Rare
Today, it’s just when you get an offer letter, and then they follow up on the employment contract. In short, can an offer letter be rescinded? Yes, it can depend on extremely rare occasions. An offer letter would have language that states it’s binding in some way. It is just exceedingly rare. I usually see it only in academia, where they don’t have employment agreements. It’s more like a longer offer letter that refers to a bunch of policies and procedures. Still, in a normal work environment, they will say, alright, let’s come to terms on the basic outline of the employment relationship.
We’ll both sign the offer letter and follow up with an employment agreement that goes into detail. It gets into the nuts and bolts of, for instance, if they say there’s a non-compete, how long is it? What’s the geographic restriction? How many points does it entail? Is it specific to the profession or the specialty of the professional in the situation? You’re not going to get details like that in the offer letter.
Let’s give an example. Let’s say you’re in sales, they say, alright, let’s come to terms. You’re good on the comp, on the benefits, on the bonus structure, on the non-compete, and you sign the offer letter. And then, three weeks later, you still haven’t received the employment contract and have not looked for any other positions because of this, relying upon that job. But then the employer states, you know what, we’re not going to be able to go through with it currently. And then they take the offer letter away. Well, they can do that. That’s just an unfortunate part of doing business.
In the Same Way, You Can Back Out From the Written Job Offer
Think of it from both perspectives. Suppose you signed an offer letter and decide to back out of a better job, moving, family concerns, whatever it is. In that case, you also want the opportunity to get out of that offer letter. And it’s going to go both ways. Either party can already decide to back out of the offer letter, assuming there’s no binding language, which, as I said before, is exceedingly rare. So, yes, an offer letter can be withdrawn. You don’t have to go through with it. You don’t have to offer an employment agreement if you’re the employer. If you’re an employee, it’s bad form to sign an offer letter and decide not to go through with a job. Still, I would never recommend someone sign an employment agreement they’re uncomfortable with. And the terms of an offer letter can look great on the surface.
And then, when you get into the details of the employment agreement, it can change how it looks. It may state the terms of the bonus. You’ll get this much per year. But it may not say, but if you terminate the contract, you won’t get any of the bonus that you earned that year or some.” You know, there are details you can’t find in the offer letter. Once you see them in the employment agreement, they can change the context of the situation. The offer letter can be rescinded but you also don’t have to go through with it. If you’re an employee, it works both ways. And that’s just how the professional arena goes, as far as the offer letter or letter of intent is concerned.
https://www.chellelaw.com/wp-content/uploads/2023/01/what-should-an-offer-letter-incl.jpg7201280adminhttps://www.chellelaw.com/wp-content/uploads/2020/01/cropped-favicon-1-300x300.pngadmin2022-10-28 18:31:122023-09-01 15:26:31What Should an Offer Letter Include?
What happens if you quit a job without notice? So, the first thing to identify is, did you sign an employment contract or not? If you haven’t signed an employment contract that specifies how much notice you must provide to the employer, then ultimately, it’s up to you how much notice you give.
Giving Weeks’ Notice Prior to Quitting the Job
Now, if you’re in a non-employed position, meaning you have not signed an employment contract, then, for the most part, two weeks’ notice is a standard amount. Why two weeks? Because normally, most places schedule out two weeks in advance. So, to avoid a huge disruption to the schedule, they would like two weeks’ notice. Now, let’s start with, you haven’t signed an employment contract, and there isn’t anything that specifies how much notice you have to give. And then we’ll end with what happens if you have signed a contract.
Consequences for Not Giving Notice
So, if you’re in maybe just an hourly position and you’re unhappy with the job for whatever reason, there are only a few consequences that can happen for not giving notice. One, even if you don’t provide proper notice, they cannot withhold your paycheck. They can’t do that. Even if you give one day’s notice, you still need to be paid for as much as you work. Second, you need to think that if you are going to list this place as a resource, a referral, a recommendation, or whatever you want to call it if you put it on a resume in the future, and then that place calls and just says, what were your dates of employment? And then perhaps they get someone on the phone who’s a little chatty, and then they may say, well, this person did not provide any notice.
You may want to be careful. And that obviously will look poorly upon you. You need to think, alright, if I’m not going to give enough notice, one, am I going to put this on my resume moving forward? And then two, maybe what kind of relationship do you have with whoever? Managers, supervisors, whatever you want to call it. And then three, were there any extenuating circumstances? Because obviously, an employer is going to be okay if there is an illness, a death in the family, or something like that, that can be explained. But if you just quit without any notice because you’re unhappy, that’s a different situation. So, that’s the first part. The only thing that could happen is they could give you a bad recommendation moving forward, and honestly, that’s about it.
Employment Contract Specifies Proper Timeline For Giving Notice
Now, if you’ve signed an employment contract, it will specify exactly how much notice you have to provide. And for most professionals, it’s somewhere between 30 to 90 days’ notice. In healthcare, it’s longer just so that it’s easier for continuity of care when you pass off a patient to someone else. In sales, it’s usually less than around 30. If you want to just leave your job without any notice and you’ve signed an employment contract, you’re in breach of contract. And they could come after you for damages. Damages for the lost sales or revenue with you leaving without any notice, the recruitment costs of finding a replacement or a short-term replacement. These are all things that you could be liable for if you just break an employment contract without any notice at all.
Think Things Through Before You Quit Without Notice
When you’re determining whether to leave or not without any notice, you need to think. This could absolutely put me at risk or in potential liability for damages to that employer. So, you have to follow what is in the contract, and it will say, alright, if you are going to give notice, this is where you send it, this is how you send it. And then, in the termination letter, it does not need to be a diatribe about all the reasons why you’re leaving. It just needs to say, per the agreement, I’m giving you 60 days’ notice, and my last state of employment will be x. I appreciate the opportunity. That’s it. That’s all you need to put in the termination letter. So, that’s a little breakdown for both people that have employment contracts and those that don’t if you leave a job without notice.
Can I Quit my Job if I Signed a Contract?
When we say contract, in my mind, that means an employment contract, an employment agreement, and a contract that lists the terms of the employment relationship. So, can you quit if you sign a contract? Well, it depends upon what is in the contract. Every contract will have the length of the agreement, like how long it lasts and then how to terminate the agreement. There’ll be a section that’s called term and then termination. The termination section will dictate how to terminate the agreement and quit your job. There are four ways for a contract to be terminated.
4 Ways You Can Leave Your Job Depending on the Contracts You Sign
If it’s just a fixed-length, meaning, it’s a one-year or two-year contract. It doesn’t automatically renew, then the contract terminates at the end of it if neither party wants to restore it, and that’s the end of it. The second way would be through mutual agreement. If you and the employer decide, we want to move on, and if it meets the agreement, then you can leave. The third way is by breach of contract. What it’s called for-cause or with-cause termination.
If one party, I’ll do this from the employee’s perspective. If the employee believes the employer is in breach of contract, let’s say they are not paying the employee on time or the amount agreed upon, or maybe they’re not paying out bonuses. The employee would then have to give written notice to the employer and say, hey, you’re in breach of contract. And then usually there’d be what’s called a cure period.
Cure Period
15 to 30 days. The employee could not terminate the contract for-cause if they were to cure the breach. Usually, if after the cure period, whatever the breach was isn’t fixed, then it’s the option of the employee to terminate the contract immediately. And then last, and this is kind of what I would consider quitting your job, there will be, or at least there should be, without-cause termination. Without-cause termination means either party can terminate the employment agreement at any time, for any reason, with a certain amount of notice to the other party. The cure period states whatever party that’s in breach of contract has a period to fix whatever the breach is. Usually, it’s between
You can quit your job, but you may have to serve a certain amount of time. In most employment contracts, the notice period will be somewhere between 30 to 90 days. In that scenario, if you wanted to quit your job and terminate the agreement. You would have to send a written notice to the employer that just said. I’m exercising my right to terminate the agreement without-cause. And then, whatever the time was, say it’s 60 days, you’d say, my last day of work will be X date. And then you would have to work those 60 days. Then, at the end of 60 days, you’re free to leave.
Read Your Employment Contract Terms Before You Quit
Remember if you decide to quit your job or terminate the agreement. Many contracts would have some repayment obligation if they paid a signing bonus or relocation assistance or they’ve paid for licenses or certifications. It’s essential to determine, alright, if I terminate this contract or quit my job, will I have to pay anything back? If you’re a healthcare professional, malpractice insurance obligations will likely be.
So, if you must pay for tail insurance, you need to identify that and figure out what that cost will be. And then lastly, and usually most importantly, are there any restrictive covenants in the contract? Even if you quit your job, the restrictive covenants will still apply. The restrictive covenants would be a non-solicitation agreement and a non-compete—the two most common restrictive covenants. The non-solicitation agreement will state you can’t actively solicit patients, clients, customers, employees, independent contractors, and vendors for a certain period of one year.
And then the non-compete is even more critical. It will state that the professional can’t work within their specialty for a period, usually one to two years, within a specific geographic radius. For healthcare professionals, it could be 10 miles from your primary practice location. If you’re in sales, it could be that you can’t work in these counties or even can’t work within this entire state. Now, that’s broad. I don’t think that would likely be enforceable in most states, but that’s what the non-compete is. So, just because you quit the job, you no longer want to be employed there doesn’t mean these restrictive covenants won’t apply.
Give Your Employer Notice To Avoid Blows in Your Career
You need to look at the language of the contract and determine: what are all the things that are going to follow me after I quit my job? Because if you terminate the agreement, it doesn’t mean that everything ends either. So yes, you can leave your job, most likely if you have an employment agreement, but you are required to follow the terms of the agreement. What if you say I have an employment agreement? I’m sick of working here. I’m just not coming back.
If you don’t give notice, you don’t show up. Then you’re done. Well, you’re a breach of contract and opening yourself up for potential legal action, either through a lawsuit or if there’s an arbitration clause or maybe some mediation. There could be damages associated with you for not giving the proper notice. In addition, it could be the company’s lost profits when you just left. It could be recruitment fees and finding your replacement. So, I suggest you follow the terms of the agreement.
And then, when I talk to many unhappy employees, I always say, look, if they are in breach of contract, you must provide them with written notice. You can’t just sit there and take it and then use that as justification for not coming back. You must follow the terms of the agreement.
https://www.chellelaw.com/wp-content/uploads/2022/12/what-happens-if-you-quit-a-job-w.jpg7201280adminhttps://www.chellelaw.com/wp-content/uploads/2020/01/cropped-favicon-1-300x300.pngadmin2022-10-28 18:28:282023-01-03 16:42:34What Happens If You Quit a Job Without Notice?
How should a professional write a termination notice? So, assuming you have a signed employment agreement or independent contractor agreement, both contracts will always include a termination section, which states how you can terminate the agreement.
Ways To Terminate an Agreement
There are usually four ways that you can terminate an agreement. One, if the term ends. So, let’s say you end your contract. There’s no language about automatic renewals, and neither party wants to continue the relationship after one year; it ends. That’s one way the contract can be terminated. Second, by mutual agreement. If both parties agree, you know what? It’s not working out. Let’s move on. That’s an easy way for a contract to be terminated.
The third is for-cause. So, if one party breaches the contract, there’s usually also a cure period. For instance, let’s say you need to be paid the amount they said they would pay you. You give them written notice. You said you would pay me this amount, but you’re not. You’re in breach of contract. Usually, the contract will state how many days they must fix the breach. Then if they don’t cure the violation or the breach, you can terminate the contract immediately.
And then the fourth way and usually most common way is without-cause termination. That means either party can terminate the agreement, at any time, for any reason, for a certain amount of notice to the other party. And that’s where the termination letter comes into play. For most industries, it’s somewhere between 30 to 90 days. Healthcare is a little bit more to accommodate continuity of care. For sales, software, and anything like that, 30 days is the standard. Once you determine how much notice you have to provide your employer, you must figure out what needs to go into the letter.
Write a Simple Termination Letter
If you’re determining the contract without cause, you don’t need a justification for why you’re terminating the contract. Sometimes, people come to me and write down two pages of why they’re terminating the agreement. It doesn’t matter. If you’re going to terminate the agreement without cause, you need to say in your letter, per the agreement, I am giving you 30 days’ notice. I am terminating the contract without cause. My last day of employment will be X date. If you have any questions, let me know. Thank you for the opportunity with this job. That’s all it needs to say. It doesn’t need to have a massive diatribe about all the existing problems or why you’re leaving.
As I said before, short and sweet, I’m terminating the agreement. As per this section, I have to provide 30 days’ notice. So, my last day of employment will be X date. Thank you. And that’s it. The last thing you need to consider is where to send the notice. In the agreement, there will be a notices section at the end stating to whom you must send the message of termination and how. Most contracts will say it has to be in writing. So, if you verbally tell your boss, that’s not enough. It has to be in writing. It has to be sent via either hand delivery or certified mail. More places nowadays will accept email, although most don’t. So, look to the notices section and see whom you have to give the notice termination to, how it has to be delivered, and what needs to go into it.
Giving the Proper Termination Notice
And if you have those three things, the written notice, the appropriate language, sent to the right person via the correct delivery method, then you’ve given proper notice, and you’re good to go once your agreement ends. Now, a couple of considerations. You need to see if your employer can accelerate the termination when you provide notice. If you have a 30-day notice, is there language that says that once you give notice, the employer can accelerate the data termination immediately? And then do they have to pay you for those 30 days? You should refrain from signing a contract that says they can accelerate the data termination and not pay you. That isn’t good. So, if you have a 30-day notice and the employer wants you to go early, they should still pay you for those 30 days.
And then one other consideration is bonuses. The contract often states that if you have a bonus that you have yet to receive, you forfeit the right to get it if you give any notice of termination. Look into the contract’s language and see how the bonuses are paid, how the compensation is calculated if you leave before the end of the quarter or the year, or whatever it is. I’ve had plenty of people who have just given termination on the wrong date and have left much money on the table from bonuses that they have already earned.
Language is critical when it comes to this. Many times, it’ll state when it’s paid out. I have a professional who’s earned a bonus, given notice, and expects to get paid, but their data termination is before the date that the bonus would generally be paid out. They don’t get the bonus. Anyway, that’s how you write a notice of termination letter.
How Do I Write a Notice of Termination of a Contract?
How to write a notice of termination of an employment contract. In any employment contract, there will be a section that deals with how to terminate the agreement. Parties can terminate an agreement in one of four ways.
4 Ways Contract Termination Can Be Done
One, if it’s a fixed term, so if the contract only lasts for a period, let’s say it’s two years. If there’s no renewal language, the two years end and it’s not renewed. The contract is over with. You don’t need to notice a termination letter for that. The second way of doing it is through mutual agreement. Both parties, for whatever reason, decide it’s fine. They both want to move on. They can do it at any point without any notice to the other party.
Another way is through breach of contract. And in that scenario, suppose one party feels the other party is in breach of the contract. There will be language stating they have to provide written notice of what the wrongdoing and the breach were. And then usually, there would be a cure period. That means a period for the party breaching the agreement to fix it. Normally, that would be somewhere between 15 to 30 days. If they fix whatever the issue is during that period, then the other party can’t terminate it immediately.
The last way is where the provider will write the notice of termination letter if it’s without-cause. In almost any contract, there’ll be without-cause termination. This means either party can terminate the agreement at any time with a certain amount of notice to the other. Normally, somewhere between 30 to 90 days, depending upon the industry.
What’s in a Contract Termination Letter?
Now, in the notice of termination letter. I find most professionals want to put a lengthy treatise on their grievances with the employer. Plus all the reasons why they’re going to terminate the agreement and all the problems they’ve had. That’s a bad idea. All the professionals should put in the termination notice as per the agreement, “I’m terminating the contract via without-cause termination. I’m required to give you 60 days’ notice. My last day of work should be X date. I appreciate the opportunity. That’s it, sign it off.”
One thing to think about in the contract, it will state it should have something called notice or notices. It’ll state precisely how to provide notice in this scenario. So, if you’re required to provide written notice through a termination letter, that will state how you can give that notice to the employer.
Termination Letter Do’s and Don’ts
Often, email is not sufficient, certainly not verbally. Fax typically isn’t. Usually, people send via registered certified mail, overnight hand-delivered, or something like that. Then it will list specifically, here is the address you need to send it to. Say a provider or a professional doesn’t follow the notices section. The employer could state, you must stay with us until you give us effective notice. I’ve had a couple of times where a professional came to me and said, well, I just told my boss, so I assumed that was the start of the 30 days. And then they waited until 30 days. They said, hey, you never gave us effective notice, you owe us another 30 days. So, make sure you follow that.
There’s no benefit to airing the grievances. Nothing is going to change. If someone is leaving an organization, then just leave. You’re not there to fix whatever the issues are. And, likely, they’re not going to fix it anyway. If you’re at the point where you want to terminate the employment relationship, keep it short and sweet. I’m giving you notice per the agreement. This is how much notice I’m giving you, this will be my last day of work, appreciate the opportunity. That’s it. That’s all you need to do.
I know the inclination is, no, I want to put all the reasons why. But there’s honestly no benefit to you. Maybe you’ll create some bad blood. Who knows? Down the road, management changes. The job suddenly becomes a great opportunity, it could circle back around. You wouldn’t want to cause friction where it’s just unnecessary. There’s no need to justify your decision to terminate the agreement without-cause. It’s just simply not necessary. So, that’s how you will write a termination letter, short and sweet.
Can You Write an Email Letter to Terminate a Contract?
You probably shouldn’t, and your employment contract probably prohibits it. In any contract, it’s going to state how you can terminate an agreement. It could be for-cause, without-cause, mutual termination, or maybe the initial term ends. But in most cases, I mean most contracts are terminated without-cause termination. In without-cause termination, either party can terminate the contract with a certain amount of notice to the other. Typically, around 30 to 90 days is a standard amount for most employment agreements. Suppose you are an employee, and for whatever reason, you don’t want to work for the employer anymore. In that case, you need to follow those terms written on the without-cause termination notice.
And it always needs to be written. It’s going to state that you must write a letter. And then, it will also state if it’s a 60-day without-cause termination. The employee has to provide it 60 days prior, work it out, and after the 60 days are over with. The employees are free to go once the contract terminates, and the employees are free to move on. To where they want to go after that—considering if there’s a non-compete or a non-solicit. Still, we’re not going to get into that today.
Check The Section of The Agreement Dealing With Notice Letter
The most crucial part as far as this goes is it will be called notice or notices. It’s toward the back of the employment agreement initially provided by the company. And this will state who, then how you need to provide notice if there is communication.
An employee could provide in writing a certified letter overnight hand delivery of whatever termination notice you’re going to provide. And that would then be considered effective notice. Very few contracts allow email as an effective notice medium. Let’s say, you wrote an email telling your employer. “I’m giving you without-cause termination notice, and I have 60 days; X will be my last day of work. I appreciate the opportunity.” Well, if the email is not an effective communication medium within that notice section, that’s not considered effective notice. And then, the employer could make you work for another 60 days until you provide effective notice. So, that’s the most important part. You need to look in the notices section and determine if the proper way to terminate the agreement includes email.
I can tell you if I review a hundred contracts, 98 of them will not include email or fax. And you certainly can’t just verbally tell your employer you’re leaving. It must be in writing. And most often, it has to be sent either by certified mail or hand-delivered. Depending on whether you work for a small practice or a big conglomerate with locations in every state. It’ll be impossible to hand-deliver the notice if you must provide notice to the headquarters that’s halfway across the country.
Give a Printed Letter
To be safe for the most part, you need to write a letter. You’ll have to print it out and send it via the certified mail that the employer is using. Usually, it’s one or two. You must send it to the owner if it’s a smaller practice. If it’s a big conglomerate, you have to send it to your boss. Plus the legal apartment of the company as well. If you kind of look through, how much notice do I have to provide? And then how do I have to provide effective notice, you’ll be safe.
I have a couple of scenarios, and people have called me after the fact. And they’ll say I sent a letter to my employer’s email. I told them I was going to terminate the contract, and they didn’t say anything. I assumed that my contract would end on a specific date. The employer was mad about the employee leaving the company. The employer was ticked off that they were leaving. So, what they did was they just sat on it for 45 days. Then, 15 days before the physician thought he was to leave, they said, you didn’t provide us with effective notice. Email isn’t an effective form of communication to provide notice. You owe us another 60 days until you give us effective notice, meaning a written letter sent via certified mail.
However, the physician had already lined up another job, he had a start date in mind. Then he had to return to the new employer. He would say, I apologize; I will have to delay my start date by almost two months. That was a tough pill to swallow for the physician. If you follow the terms of the notice section, then you should be okay.
What Should Be in a Termination Agreement Letter?
What needs to go in a termination letter from an employee? If employees decide they no longer want to work for the employer, what to put in that letter? First, we have a few things to discuss regarding terms and termination. The term is the length of the contract, and it should be specified. It could be one year, two years, or three years. Then there’s normally a language that would say it would automatically renew for one year after that. More and more, there are evergreen contracts, which just means there’s no initial term specified. It just says the contract goes on forever until terminated by either party.
What Form Should a Contract Termination Letter Take?
After that, you need to identify how to terminate the contract. There are a couple of ways to terminate an employment contract. If it’s a fixed term, two years, no possibility of renewal, it ends, and that’s it. You don’t even need to send a letter. Then, mutual agreement. This isn’t working out if both parties approach the other. We don’t need to give notice. Let’s move forward. You don’t need a termination letter there. For cause means someone is in breach of contract. The contract will usually require written notice saying, hey, you’re breaching the contract. And then there’ll be what’s called a cure period. It means there’s a period for the employer to fix the breach or the employee. And if able to fix the breach within that period, it’s usually somewhere between 15 to 30 days. The contract reverts and the party couldn’t terminate for cause.
Contract Termination Letter When a Breach Has Occurred
If there was a breach of contract, let’s do this from the employee’s perspective. They would first send a written letter stating you are in breach of contract. And then, if there’s a cure requirement, you have 15 days to fix this breach. If it fails to fix the breach, the employee’s option is to terminate immediately. In that scenario, the employee would send another letter stating he failed to fix the breach. I’m terminating the contract immediately. Thank you. And that’s it. Once again, in the initial letter, you need to state the reasons for the breach of contract. And then, in the second letter, if they failed to fix the breach. Just state, hey, you didn’t fix this. I’m moving forward.
You don’t need to put a list of grievances or all of the problems with the employer. You just say you breached; and you didn’t fix it. And give the details about the breach and then move on. Now, that’s rare. The most common way to terminate a contract is without-cause. Almost any employment contract has a statement saying. Suppose either party wants to terminate the agreement at any time. In that case, they can do so with a certain amount of notice to the other party. 30 to 90 days, anywhere between, is standard for without-cause termination notice.
In that scenario, that’s where the termination letter would come into play. Let’s say the professional has a 60-day notice. They write the letter, they say per the agreement. I’m giving you 60 days’ notice. My last day of work will be X date. Thank you for the opportunity. I’m moving on. Once again, this letter is not the time for an airing of grievances or all the problems.
Keep Your Contract Termination Letter Short and Simple
Putting all of that down on paper is no benefit to the employee. It needs to be short and sweet. I’m exercising my right to terminate the agreement without-cause. I’m providing you with this amount of notice as required. My last date of work is this. Thank you for the opportunity. Good luck. That’s it. There are zero benefits to burning bridges to pointing out all the flaws in the employer. I know many employees feel like I just wanted to say my piece. It’s not a good idea for a couple of reasons. At that time, that job may stink because of management, mismanagement, the people you’re working with, the opportunity, whatever.
And if you send some nuclear bomb letter and destroy the relationship, what if something happens down the road? What if the manager changes? What if they move into new territory? Or what if someone buys them out? If you’ve nuked those relationships, that opportunity may be much better. Now, it’s a bad look, and you may have lost out on being able to go back. That’s one reason not to do it. And the second one is that there’s simply no benefit. If you’re moving on, move on. It feels good for the employee to get all that stuff out. But when it’s written, it’s forever. And so, they’re going to have that letter. They’ll probably show it to other employees or management if it’s bad. And it just makes the employee look bad.
So, keep it short and sweet. Say, this is the contract section, I’m exercising this without-cause termination, last day of work is this. Thank you. Move on. That’s it.
Can an Employee Terminate a Contract at Any Time?
The short answer is probably. However, it’s going to depend upon the language in the contract. There are ways that an employee can terminate an agreement. One, if there’s a fixed term, meaning a one-year, two-year, or three-year contract. And there’s no language that states the employment contract automatically renews. At the end of that fixed term, if neither party wants to sign another arrangement, the contract terminates. Both parties can move on. That’s it. That’s one way on the agreement that can end a contract. Two, through mutual agreement. Maybe it’s not working out, and both parties are like, you know what? Let’s move on. You can mutually agree to terminate the agreement. Three, for the cause. In any employment contract, there will be a section called termination. In that section, it’s going to state how both parties can terminate the agreement.
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What happens if you sign an offer letter but end up not taking the job? As an initial matter, if you have signed an offer letter but don’t want to go through with it, 99 times out of one hundred, you’ve signed a non-binding letter of intent or offer letter. And although your new potential employer may be annoyed that you’ve signed the offer letter but aren’t going through with it, it’s very unlikely anything is going to happen to you legally. But let’s break down the basics and go through it.
What is an Offer Letter?
An offer letter is simply a letter that details the main points of the employment relationship. Most offer letters will include compensation, so salary and bonus structure, a brief thing about the benefits, start date. If you’re in healthcare, maybe malpractice insurance responsibilities. So, the basic things like the highlights of the employment relationship.
Once you sign the offer letter, what normally would happen is they, being the employer, would incorporate what’s in the offer letter into an employment agreement. The employment agreement would then be sent to the professional. And that would have the nitty-gritty details of the employment relationship, so potentially how long the contract lasts, how to terminate the contract if there’s a non-compete, whether you must pay anything back if you leave early, the details of the compensation if it’s some productivity bonus, how’s it calculated, who pays for professional fees, that type of thing. That’s going to be the details in the employment agreement. And until you sign that employment agreement, the relationship is not complete, like you are not bound to anything until you sign the employment agreement.
Non-Binding Offer Letter
As I said before, 99 times out of one hundred, you’re going to have a non-binding offer letter. There could be a situation where the offer letter is binding, but it would have to have language that states this is a binding offer letter. It is, once again, extremely rare for there to be a binding offer letter. The only time that I’ve seen it is in academia. So, if you’re taking a position with an academic institution, many times, they don’t have employment agreements. They just have offer letters. And sometimes, those can be binding. But if you’re just a normal professional getting a new job with an employer, the offer letter will not bind you to anything.
However, once again, if there is language in the offer letter that states if you sign this offer letter and renegotiate the agreement in some way or decide not to go through with it, it’s possible there could be damages listed. So, for instance, if they used a recruiting service to find you, and then you sign the offer letter, and they’ve paid out, although that’s not how most recruiting services work, that’s the only scenario where you would have an issue.
Explain Why You Are Declining the Job
Now, when you do break the offer letter, the potential employer is, I guess, probably going to be ticked off that you’re not taking the job. So, you need to handle it delicately. Explain why you can’t move through with the job. Is there a family reason? Maybe an illness? Explaining that you’ve taken a job that pays more is not a good route. It’s not a good explanation as far as why you’re not going through with the job.
And even if that is the case, I would just keep that to myself. But you don’t want to completely burn a bridge. No matter what industry you’re in or where the job is, burning a bridge is a bad idea. And the easiest way possible is to explain why you don’t want to go through with the job. Hopefully, you can save some goodwill between your new potential employer and yourself. And who knows? Maybe in a year, the job you signed the offer letter for and then decided not to go through with it may become a great option. And if you handled this separation appropriately and amicably, you may have another opportunity that could shut down if you left under some bad blood. If they do come back at you after you’ve said, I’m not going through with the full employment relationship, and they’re mean, or they’re threatening you in some way, most of the time, the best way is just to grin and move on.
Don’t exchange a bunch of emails about, oh, this is so unprofessional, or how could you do this to us? It doesn’t serve any purpose. So, keep it amicable as best as you can and just move on. If you’re not going to go through with the job, there doesn’t need to be a nine-page explanation as to why you’re not doing it. It’s just, I’m not moving through at the job due to X, and I’m moving on.
What Happens After You Sign an Offer Letter?
There are two main distinctions. A professional could receive an offer letter, and that’s it. No employment contract follows. It’s just you agree to the terms of the offer letter, and then you start the job. And then, the second way would be the employer asking the potential employee to sign an offer letter, agreeing to basic terms. And then, they’ll incorporate those terms into an employment agreement and offer the employment agreement to the prospective employee. Then that person must decide if they want to sign the employment agreement and move forward with the relationship.
Let’s first go with if you begin an offer letter with no employment agreement to follow. In that scenario, you’re most likely in an at-will employment relationship. This means that the agreement or the employment relationship may terminate at any time, for any reason. This is with no notice unless specifically stated in the offer letter. For the most part, there wouldn’t be any restrictive covenants that follow when the employment relationship ends. Restrictive covenants could include a non-solicitation agreement and a non-compete.
Those are the two most common or the two that matter the most for most employees. They provide you with an offer letter that goes through basic things if you negotiate. Such as compensation, benefits, and start date, and that’s about it. I would say most licensed professionals usually would sign employment agreements. Attorneys don’t, for the most part, but almost anyone in healthcare, physicians, nurse practitioners, PAs, vets, chiropractors, and dentists, always sign employment agreements.
Not Required to Take on an Offer You Signed
Let’s say you’re in another situation where they give you an offer letter, and you agree to the terms. Then they’ll follow up on the employment agreement. Many people ask, alright, what if I’ve signed the offer letter? But when they give me the employment agreement, it doesn’t look great. Do I have to go through with the job? The answer is no. Unless there’s strange language in the offer letter that states it’s binding, which would seldom happen if they follow up with an employment agreement. You can still negotiate terms.
Let me give you an example. Let’s say the offer letter states there’s a non-compete, but it doesn’t have any details. So, you get the contract and then look in the non-compete, and it’s five years and covers an entire state. Like you will have to move out of the state if you want to continue in your profession. Well, that’s not a reasonable non-compete. But that could make a job that may have looked great at a hundred thousand a year be only worth 200,000 a year. That is if you accept that terrible non-compete.
Provide Context for Disputing Job Offer
Even if you’ve accepted the terms of the offer letter, it doesn’t mean you have to go through and execute the employment agreement. The employer will probably talk about you agreeing to the terms, and now you’re returning to us. So, it is most effective if you provide some context as to why it looked good initially. Still, after reading the actual details of the employment agreement, it’s not so good.
I think most smart employers can understand that and appreciate that. If you just come back at them and say, no, now I want to double the salary, the bonus, or whatever. Without providing context, I assume the employer will not be pleased with that and may even pull the offer. So, what happens when you sign an offer letter? First, an employment agreement will likely follow, and then you’ll have to determine if you want to go through with that, or they’ll give you the offer letter. It’s an at-will relationship; you can leave at any time, and there likely aren’t any strings attached.
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Is it worth it to take a six-month contract position, or is it better to wait for a full-time position? Let’s talk about the employment status first and then what needs to be in the independent contractor agreement to make that decision.
Types of Employment Relationships
So, there are two types of employment relationships. You’re either an employee or an independent contractor. With this question, we’re talking about people who are doing contract work as independent contractors, and that could be a variety of things. It could be for a specific task, or it could be for a company that needs a little short-term help with something, but you are not an employee, meaning you won’t receive a W2 at the end of the year.
Taxes aren’t taken out of your compensation, and you most likely won’t be getting any benefits. Now, it’s possible you could be a short-term employee, but for this specific question, I’m just going to look at it from the perspective of being an independent contractor. So, before you start any job or contract position, it’s very likely you will have to have signed an independent contractor agreement. And in that agreement, it’s going to state how the contract can be terminated. So, when you’re trying to decide whether it is better to take the short-term assignment or wait for a permanent assignment, you need to see what your termination options are after you start the job. For instance, almost any contract is going to have some way of terminating the agreement with a certain amount of notice to the other party.
Short-term Contract Work Termination Options
Now, when it’s a short-term, six-month assignment, for instance, and it has maybe a 60 or 90-day without-cause notice, well, that needs to be considered. So, even if you were to start, if you give 90 days’ notice, you still have to work there for three months, and then, depending upon whether you got a full-time offer or not from somewhere else, that’s what should go into whether to take the short-term position or not. Are you stuck for those six months? Meaning you cannot get out of the agreement without some for-cause reason, meaning they have violated or breached the agreement in some way. And then you can terminate the contract immediately, and there will be language in there about that as well. But if you start the position and it states it cannot be terminated except for-cause reasons, well, then you’re stuck in that position for six months, no matter what. And if a full-time position becomes available during that time, you’re stuck.
Review Termination Options Before Taking the Contract Job
So, that’s the first thing you need to think about. Am I in it for six months, no matter what, or do I have some options to get out of it? Because if you can get out of it with a certain amount of notice, then there’s really no harm in taking that job. No job is going to say if you can’t start within the next 10 days, it’s gone. I mean, it’s very unlikely, at least for a permanent position. If you are the right person for a job, a company will absolutely be willing to wait 30 days, most likely for you to get out of your contract. Now, if you said not to wait 90 days, well, they might move on. So, if you can negotiate the without-cause termination notice down, then you absolutely need to do that. Now, another consideration is sometimes there’ll be a penalty associated with terminating the contract early.
For instance, if you were given a signing bonus and relocation expenses, most of these are probably remote, so that’s not going to be a part of it. Maybe if they paid for some licensing dues and fees, certifications, whatever, you may have to pay some of those back. So, that’s another consideration. What are my repayment requirements if I terminate the contract early if I get a permanent position offer while I’ve started this contract position? So, in summary, should you take a six-month contract versus waiting for a full-time job? It really depends on how quickly you can get out of the contract after you’ve signed and then what you’re going to have to pay back to the employer or organization that you’re working for as an independent contractor.
What is a Full-Time Contract Position?
What is a full-time contract position? In my mind, if you’re working in a contract position, then you’re an independent contractor, and usually, as an independent contractor, you are brought in to do a specific task for a specific amount of time. I’d say more and more, now that people are working remotely, contract positions are, I guess, more prevalent than they used to be. There are some different categories of being in a contract position. For instance, let’s say I wanted to have a website built and I used Upwork or onlinejobs.ph or something like that to find somebody. It would be a limited scope of what they’re doing for me. It would take a limited amount of time and that would then make them have a contract position that was part-time.
The Difference Between a Full-Time Contract Position and a Regular Employee
Now, if you are a full-time or in a full-time contract position, the only thing that really differentiates you from someone else is they have employees that are paid as W2 employees. At the end of the year, they’ll receive a W2 which shows all the compensation that they received and then all the taxes that were taken out. Whereas if you’re in a full-time contract position, you’re classified as an independent contractor, and then at the end of the year, you’re going to receive a 1099. And as a contractor, no taxes will be taken out of any of the compensation that you received. So, at the end of the year when you file your taxes, you are responsible for paying the state and federal taxes associated with any compensation that you received. Many times, if someone is acting in a contract position or as an independent contractor which is really the same thing effectively, they can’t transition into a full-time permanent position.
Benefits of both Full-Time Contract Position and Regular Position
But in that scenario, it’s extremely likely that you’ll then transition from an independent contractor into an employee, as I said before, where you received the W2. What are the benefits of both? Well, in a contract position, at least if you’re doing part-time work, you can work for whomever you want, whenever you want, and your schedule is completely up to you. Whereas if you’re working in a full-time contract position, you’re going to sign an independent contractor agreement of some sort. And then in that agreement, it’s going to state what the expectations are as far as your time commitment to the organization you’re working with. And so, many of those agreements will state you can’t have outside employment without written approval from the organization you’re working with. The entire point of being an independent contractor is for it to be quick in, quick out, and can work for multiple people at the same time.
Whereas as an employee, especially as a professional, there’s almost always either exclusivity or outside activities provision, which would then prevent the professional from working in multiple locations or for multiple organizations at the same time without written approval from the employer. So, keep that in mind. One of the main differences between being an employee versus a contractor is just that you’re going to have some restrictions based on who you can work for and when you can work. Now, one other consideration as an employee and a contractor, especially as a full-time contract position, is that there very likely will be restrictive covenants in whatever agreement that you signed. Restrictive covenants prohibit the independent contractor from doing certain activities during or after the contract ends. The most common restrictive covenants are non-compete, non-solicit, and non-disparagement. For most people, the non-compete is the most important part.
Non-Competition Clause in an Independent Contractor Agreement
And yes, you can have a non-competition clause in an independent contractor agreement. There are a few states where non-competes are completely unenforceable. So, I would check with whatever state you’re in that makes certain that you’re not in one of those states. And even if you did sign a non-compete in one of those states, it’s very likely it would be unenforceable. However, most states do have some enforceable non-compete either through their case law or in their administrative code or statutes, or regulations. It’s called different things in different states, so be very careful about how it’s worded. I find that for some of the healthcare professions, it’s much more limited, whereas if you’re in sales it could be very broad, meaning they want to knock you out from the entire state of doing things for similar employers.
What you want to do for any non-compete is get it as specific as possible, meaning the scope of it should be the specific thing that you’re doing for that organization. So, if you are in software sales as an independent contractor, then it needs to say you can’t work in software sales, not any sales. Or if you’re in a full-time contract position doing IT work or doing graphic design or whatever it is, it needs to say specifically what you’re doing for that employer. That way you have some options to do some other things after the contract or agreement ends. So, that’s what it means to be a full-time or in a full-time contract position.
https://www.chellelaw.com/wp-content/uploads/2022/11/is-it-worth-it-to-take-a-6-month.jpg7201280adminhttps://www.chellelaw.com/wp-content/uploads/2020/01/cropped-favicon-1-300x300.pngadmin2022-10-20 15:30:022022-12-01 05:40:49Is it Worth it to Take a 6 Month Contract Position or Wait for a Full Time Position?
What does it mean to work under a W2 contract? So, there are two types of employment relationships for a professional. You are either working as an employee or you’re working as an independent contractor. And when you work as an employee, you are a W2 employee which means at the end of the year, the employer will send you a W2, which has a summary of all the compensation you received in the previous year, and then all the taxes that have been taken out of it for Social Security, Medicare, and that type of thing. If you’re an independent contractor, you’re considered a 1099 employee. And in that scenario, no taxes are taken out of any of your compensation.
Advantages of Working as an Employee (W2) or as an Independent Contractor (1099)
You just paid the full amount, and then it’s your responsibility at the end of the year or if you’re paying quarterly to pay all the taxes to either the state or the federal government depending upon where you’re working. So, what are the advantages of one over the other? Well, if you are an employee, so if you are a W2, then you’ll receive benefits, whereas an independent contractor usually will not. And normal benefits for a professional are licensing dues and fees, health, vision, dental, retirement, disability, and paid time off, and they’ll probably pay for some continuing education. If you’re in healthcare and need malpractice insurance, they’ll pay for your underlying premium and tail insurance if necessary. Whereas as an independent contractor, for the most part, you’re not going to get any of those things.
Maybe if you’re a healthcare provider, they’ll pay for your underlying premium, but extremely unlikely they’re going to pay for tail if needed. And they’re not going to pay for any of the other things. They won’t pay for your licenses, your registrations, or any health, vision, dental, retirement, life, or disability. All of that will be the responsibility of the independent contractor. Now, if you have the choice of being an employee versus being an independent contractor, there are a few things you need to think about. One, if you’re working as an independent contractor, then you very likely should set up an LLC or a PLLC, it just depends upon what state you’re in. And then in that scenario, you’ll have a bank account under your business and a tax ID number, and then you can deduct all the expenses that are associated with your professional services.
W2 Contract Meaning
A W-2 contract refers to an employment arrangement in which a worker is classified as a regular employee, with their employer responsible for withholding payroll taxes and reporting the worker’s annual compensation on a W-2 tax form. This form details the employee’s gross income, federal, state, and local taxes withheld, as well as Social Security and Medicare contributions. W-2 employees benefit from consistent income, employer-provided benefits, and legal protections, while employers manage tax obligations and compliance with labor laws throughout the year, ensuring a streamlined process for both parties.
W2 Employee Meaning
A W-2 employee refers to an individual whose wages and tax withholdings are reported to the Internal Revenue Service (IRS) on a Form W-2. This form is generated annually by the employer and outlines the employee’s total earnings, federal and state income taxes withheld, Social Security, and Medicare taxes. W-2 employees are classified as regular staff members and typically receive benefits such as health insurance, retirement plans, and paid time off. Their employers are responsible for handling payroll taxes and adhering to labor laws, ensuring that the employee’s tax obligations are met throughout the year.
W2 Position Meaning
A W-2 position refers to a type of employment where the worker is considered a regular employee and receives a W-2 tax form from their employer. This traditional form of employment requires the employer to handle payroll taxes, withhold federal, state, and local taxes, and report the employee’s annual compensation on the W-2 tax form. In contrast to other classifications, such as 1099 independent contractors, W-2 employees typically enjoy consistent income, employer-sponsored benefits, and legal protections under labor laws. The term “W-2 position” highlights the employment status and associated tax implications for both employees and employers, ensuring a well-defined and structured work arrangement.
Benefits of W2 Position
Once again, if you’re a healthcare provider, then you could deduct your malpractice insurance, any supplies, maybe a rental space, travel, or any of that stuff associated with you. Well, if you’re working for the company, you are an independent contractor. Now, the benefits of a W2 are obviously the benefits. So, having healthcare, travel reimbursement, continuing education, support, so administrative support, many times you’re not going to get as an independent contractor. That’s what makes the W2 position, I guess, attractive. I also find, as an attorney who helps professionals, many independent contractors don’t budget for having to pay the taxes on what they’re paid throughout the year. And so, they’ll get to the end of the year, and they’ll owe a significant amount of money. And for some people, it’s a budgetary problem, whereas when you’re working as a W2 employee, all the taxes are taken out every time you get paid, and therefore, at the end of the year, theoretically you’re not going to owe anything back to the government.
So, that’s what it means to work under a W2 contract. If you sign an employment contract, it’s not called a W2 contract. You are classified as a W2 employee because you receive the W2 at the end of the year. But any employment contract that you’re going to sign will be called an employment contract, not a W2 contract.
W2 vs 1009 Benefits
Most likely health, vision, dental, retirement, life, disability, they’re going to pay for your board license, DEA registration, and continuing education, you’re going to get paid time off. All of that, in a normal employment relationship, would be covered by the employer. If you’re working as a 1099, you’re going to be responsible for all of that including malpractice insurance. Now, if you want to maximize your tax deductions, then what you should do is create an LLC, get an EIN, get a bank account in the state that you’re working in, and then put all compensation and expenses, have it flow through that bank account. That way, you can track whatever your expenses and revenues are. And then use that as tax deductions at the end of the year as business expenses.
What Does a Contract Job on W2 Mean?
What does a contract job on W2 entail? A W2 contract job refers to a unique employment arrangement where an individual works as a contractor for a client through a temporary staffing agency. The individual is issued a Form W-2 by the agency, which outlines their wages, deductions, and taxes for the year. In this setup, the contractor is classified as an employee of the temporary work agency, rather than an independent contractor who would receive a Form 1099. This distinction is essential because W2 contractors are entitled to certain benefits and protections, such as withholding of taxes and access to unemployment benefits, that independent contractors may not receive. By understanding the nuances of a W2 contract job, individuals can make informed decisions about the type of employment that best suits their needs and preferences.
Working as an Independent Contractor
I would suggest if you’re going to work as an independent contractor, you should talk to an accountant in advance of starting or signing the agreement and then set up all those things properly, so you can maximize your tax deductions. If you do set up an LLC, you don’t have to do it for every single job that you take as an independent contractor. It’s good to go from when you start until however long you want to work as an independent contractor. For multiple different organizations, what they would do is in the independent contractor agreement, it’ll state who the parties are, just use the contract they’re contracting with your LLC and not you personally.
And that way, the relationship is set up correctly. Now, as I said before, the situation really dictates which one is better. There are times when an employer will ask you to work as an independent contractor, but they’re really treating you as an employee completely. The reason why most of them would do that is just to save on paying employment taxes, which is usually around 10 to 12% of your total compensation. The IRS lists kind of like a 20-factor test to determine whether someone is an independent contractor versus an employee. I would suggest if you’re concerned that you’re being misclassified, that you look at that test, and then if it’s clear you’re actually an employee, but they’re just classifying using an independent contractor, so they don’t have to pay employment taxes or give you any benefits, bring that to the attention of the employer and say, look, I believe you’re misclassifying me.
Review Your Contract Carefully
I’m not comfortable signing this. I mean, what could happen is if the IRS determines that you were misclassified, they could come back to the employer for employment taxes. Sometimes employers will even put language in there stating that the independent contractor would be responsible if the IRS comes back and says they’re misclassified for those back taxes and penalties. Absolutely do not sign something that says that. So, that’s kind of the different scenarios where it might make sense to be a W2 versus a 1099. It just depends upon the situation. I mean, most people, if they’re just working sporadically, maybe once or twice a month for a surgeon or something they’re assisting in like if you’re orthopedics or something like that, that makes sense to be an independent contractor. If you’re working every single day from nine to five, you are not an independent contractor. It’s very, very unlikely that a scenario like that would dictate you to be classified as an independent contractor. So, you just need to be careful.
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What does contract work on W-2 mean?
What does it mean to be a contract worker on a W-2? A contract worker on a W-2 is an individual who is employed by a temporary staffing agency but performs work for a client of the agency on a contractual basis. The staffing agency issues the worker a Form W-2 for tax reporting purposes, indicating that the individual is classified as an employee of the agency rather than an independent contractor. This distinction is important because W-2 contract workers are eligible for certain employee benefits and protections, such as payroll tax withholding, workers’ compensation coverage, and unemployment insurance, which are not available to independent contractors who receive a Form 1099 for their work.
What is the difference between a W-2 employee and a W-2 contractor?
What is the difference between a W-2 employee and a W-2 contractor? A W-2 employee is an individual who is directly employed by a company, receiving a regular wage or salary, and benefiting from various employee rights and protections, such as health insurance, retirement plans, and paid time off. On the other hand, a W-2 contractor, also known as a contract worker, is employed by a temporary staffing agency but performs work for a client of the agency on a contractual basis. While both W-2 employees and W-2 contractors receive Form W-2 for tax reporting purposes, W-2 contractors typically have more flexibility in their work arrangements, limited employee benefits, and may not be eligible for the same legal protections as W-2 employees. The distinction is crucial, as it determines the extent of benefits, tax obligations, and employment rights each worker is entitled to.
What is a full-time contract position? In my mind, if you’re working in a contract position, then you’re an independent contractor, and usually, as an independent contractor, you are brought in to do a specific task for a specific amount of time. I’d say more and more, now that people are working remotely, contract positions are, I guess, more prevalent than they used to be. There are some different categories of being in a contract position. For instance, let’s say I wanted to have a website built and I used Upwork or onlinejobs.ph or something like that to find somebody. It would be a limited scope of what they’re doing for me. It would take a limited amount of time and that would then make them have a contract position that was part-time.
The Difference Between a Full-Time Contract Position and a Regular Employee
Now, if you are a full-time or in a full-time contract position, the only thing that really differentiates you from someone else is they have employees that are paid as W2 employees. At the end of the year, they’ll receive a W2 which shows all the compensation that they received and then all the taxes that were taken out. Whereas if you’re in a full-time contract position, you’re classified as an independent contractor, and then at the end of the year, you’re going to receive a 1099. And as a contractor, no taxes will be taken out of any of the compensation that you received. So, at the end of the year when you file your taxes, you are responsible for paying the state and federal taxes associated with any compensation that you received. Many times, if someone is acting in a contract position or as an independent contractor which is really the same thing effectively, they can’t transition into a full-time permanent position.
Benefits of both Full-Time Contract Position and Regular Position
But in that scenario, it’s extremely likely that you’ll then transition from an independent contractor into an employee, as I said before, where you received the W2. What are the benefits of both? Well, in a contract position, at least if you’re doing part-time work, you can work for whomever you want, whenever you want, and your schedule is completely up to you. Whereas if you’re working in a full-time contract position, you’re going to sign an independent contractor agreement of some sort. And then in that agreement, it’s going to state what the expectations are as far as your time commitment to the organization you’re working with. And so, many of those agreements will state you can’t have outside employment without written approval from the organization you’re working with. The entire point of being an independent contractor is for it to be quick in, quick out, and can work for multiple people at the same time.
Whereas as an employee, especially as a professional, there’s almost always either exclusivity or outside activities provision, which would then prevent the professional from working in multiple locations or for multiple organizations at the same time without written approval from the employer. So, keep that in mind. One of the main differences between being an employee versus a contractor is just that you’re going to have some restrictions based on who you can work for and when you can work. Now, one other consideration as an employee and a contractor, especially as a full-time contract position, is that there very likely will be restrictive covenants in whatever agreement that you signed. Restrictive covenants prohibit the independent contractor from doing certain activities during or after the contract ends. The most common restrictive covenants are non-compete, non-solicit, and non-disparagement. For most people, the non-compete is the most important part.
Non-Competition Clause in an Independent Contractor Agreement
And yes, you can have a non-competition clause in an independent contractor agreement. There are a few states where non-competes are completely unenforceable. So, I would check with whatever state you’re in that makes certain that you’re not in one of those states. And even if you did sign a non-compete in one of those states, it’s very likely it would be unenforceable. However, most states do have some enforceable non-compete either through their case law or in their administrative code or statutes, or regulations. It’s called different things in different states, so be very careful about how it’s worded. I find that for some of the healthcare professions, it’s much more limited, whereas if you’re in sales it could be very broad, meaning they want to knock you out from the entire state of doing things for similar employers.
What you want to do for any non-compete is get it as specific as possible, meaning the scope of it should be the specific thing that you’re doing for that organization. So, if you are in software sales as an independent contractor, then it needs to say you can’t work in software sales, not any sales. Or if you’re in a full-time contract position doing IT work or doing graphic design or whatever it is, it needs to say specifically what you’re doing for that employer. That way you have some options to do some other things after the contract or agreement ends. So, that’s what it means to be a full-time or in a full-time contract position.
Independent Contractor Agreements
An independent contractor agreement is a vital part of the modern workplace. For many professionals, including in the healthcare industry, working as an independent contractor can offer several contract benefits, such as having control over your work schedule and enjoying the ability to collaborate with multiple companies.
While such a contract agreement may seem attractive to most people, it is essential to dive deep into what this independent contractor agreement entails. And how it differs from a traditional employment contract. This way, you’ll get to know what to expect and how to handle yourself during the contract duration. In this blog post, we will discuss:
What to look out for when signing an independent contractor agreement
What Is an Independent Contractor Agreement?
An independent contractor agreement is a legal document between the hiring company and an independent contractor. This agreement outlines the terms of the working relationship, including the services, the compensation, and other relevant details.
It is important to note that independent contractors are not employees of the company they are contracting with. Instead, they are self-employed individuals who provide services to that company. This can breed confusion, primarily if you’ve never worked as an independent contractor. You may have questions about what’s fair and reasonable and how to work with what’s provided and what’s not provided in the contract. If this is your case, you should consider consulting an experienced physician contract lawyer to help you review the contract. And guide you on all you need to know before signing the agreement.
Is a Physician an Independent Contractor?
A physician can be an independent contractor or an employee depending on the contract agreement they signed when starting their job.
The vast majority of physicians are employees meaning they signed an employment contract. However, some specialties, such as dermatology and anesthesiology, are more independent contractors.
Employment Contract Agreement vs Independent Contractor Agreement
As discussed below, there are three significant differences between an employment agreement and an independent contractor agreement.
Work Status
When you sign an employment contract agreement, you become an employee of the hiring company. However, if you sign an independent contractor agreement, you’re considered a self-employed individual or a freelancer.
Taxes
If you sign an employment contract agreement, you must complete the w-2 tax forms. This means that taxes will be deducted directly from your salary. While if you sign an independent contractor agreement, you’ll be paid full compensation. However, you’ll be required to complete the 1099 tax forms to pay off your taxes on your own at the end of the year.
Benefits
An employment contract offers benefits such as life insurance, health insurance, disability insurance, paid time off, retirement plans, and Continuing Medical Education (CME) reimbursement. In contrast, an independent contractor agreement doesn’t offer any company benefits. However, you may be eligible for a higher salary and compensation factor for relative value units (RVU).
About to Sign an Independent Contractor Agreement?
Before signing an independent contractor agreement, you must understand what you agree to. This way, you can know what to expect and be sure the contract agreement is fair to you as it is to the hiring company. The first step is reviewing the contract and negotiating where needed. To make this even much easier for you, you should consider consulting an experienced healthcare attorney who can review and advise accordingly. Attorney Robert Chelle is a professional contract attorney who has helped many healthcare workers review their independent contractor agreements. He can help you too. Feel free to reach out today.
Independent Contractor Relationship
Remember, as an independent contractor. You’re free to work for multiple entities simultaneously, meaning you must be careful not to breach your contract by working with a competitor of your hiring company. If you breach this agreement, you may face the consequences, such as being sued by the hiring entity.
https://www.chellelaw.com/wp-content/uploads/2022/11/what-is-a-full-time-contract-pos.jpg7201280adminhttps://www.chellelaw.com/wp-content/uploads/2020/01/cropped-favicon-1-300x300.pngadmin2022-10-18 19:25:252022-11-28 04:34:34What is a Full Time Contract Position?