Most employees work on an at-will basis. This means that you, as an employer, can fire them at any time. It also means they can quit at any time. Neither side is bound to anything, and even rules about giving two-weeks notice are not legally binding; they’re just what employees may want to do if they want to have a favorable reference in the future.
Signing a contract
When an employee signs a contract, that status changes. They can only be fired in accordance with that contract. For instance, it may say that they can only be fired for cause and list potential reasons. Meanwhile, the contract could also say that the employee has to stay with the company for a set amount of time, such as a year.
So, what happens if your employee quits before the time on the contract us up? It does happen, but it may open up options for you to sue your ex-employee for breach of contract. If that breach costs you money, you may be able to seek compensation.
Your options also depend on the specific terms of the contract. For instance, some employee contracts note that quitting early means that the employee has to pay a fine. They could be told to pay you directly, or you may have the option to reduce their final check by the amount of the fine.
Defining each party’s rights
When working with employees on a contractual basis, that contract can define their rights and yours, as their employer. Be sure you know exactly what options you have if they breach the agreement in any way.