Wage Theft Safeguards:
Do I Have to Have a Signed Employment Contract to Be Protected from Wage Theft?
by Fred Schepartz
At its core, wage theft often involves something as simple as a broken promise. This is especially true in situations where a worker is not paid the wage they thought they were going to get paid. The worker is offered a job at a certain wage, but when that first paycheck arrives, the worker finds that they are getting paid less than what was promised.
A big part of this issue involves basic concepts of contract law. First, what exactly are the elements of a contract? At its core, a contract is an agreement between two or more parties that involves something of value. There needs to be an offer, and the offer needs to be accepted. Therefore, if an employer offers a worker a job under certain terms, and the worker accepts the job under the offered terms, that is a contract.
But does the contract have to be in writing to be valid?
Many types of contracts are valid even if they are not in writing. Some types of contract must be in writing to be valid. For instance, a marriage contract must be in writing to be valid. A contract involving the sale of land must be in writing to be valid. A contract that cannot be executed within one year additionally must be in writing.
The latter scenario may affect an employment contract. If the nature of the employment means that it cannot be completed within one year, then such an employment contract must be in writing to be valid. This does not apply to employment that is indefinite in nature.
Thus, if the nature of employment specifically means that it will take at least a year to complete assigned tasks or duties then the contract must be in writing. If it is not in writing, the contract is not valid. In other words, in such situations, if the contract is not in writing, the employer cannot be held to promises made regarding wages.
If an employment contract does not have to be in writing, is it enforceable?
The answer to that question becomes complicated because there are really two answers. On the one hand, the answer is yes. On the other hand, the answer is yes and no.
If the employment is either indefinite in nature or definite but for a period of less than one year, a verbal promise regarding wage is valid and enforceable. For example, if a construction worker is hired for start-to-finish of a new hotel, that contract would have to be in writing because the construction would clearly take more than a year to complete. On the other hand, if a construction company hires a construction worker but not for a specific project like the hotel, the contract would not have to be in writing because the employment is indefinite in terms of duration.
However, an employer may claim that they did not make that promise regarding the wage. If there are no witnesses to the promise, it may be difficult to prove that the promise was made, and the employer can get away with breaking their word.
The best way for a worker to protect themselves from this sort of broken promise is to request that the employment contract, including the promised wage, be put in writing. If the employer refuses to provide a written contract, that should serve as a red flag that this person cannot be trusted to live up to their end of the bargain.
It should be noted that even with a signed contract, the employer may still break their promise, but that is a topic for another day.