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Wage disputes and the importance of boilerplate contract language

On Behalf of | Oct 27, 2016 | Firm News, Wage And Hour Laws

When people searching for a new job are offered a position, it is understandably an exciting time.  Many employers in California offer a contract and then apply pressure to the recipient to commit quickly. However, most employment contracts have boilerplate language that generally benefits the potential employer, especially in issues of wage disputes. It could be important for a potential employee’s interests to read, understand and usually run the contract language by an attorney prior to signing.

There are several main areas of concern regarding boilerplate contract language, but three of the most troubling are governing law, offset and arbitration clauses. Governing law is a provision which states which state law will be relevant when a dispute occurs. This can be very important if an employee works with a company that is headquartered in a different state than the one in which the employee works. If there is an issue, many contracts require that any legal proceedings must be undertaken in the state where the company is headquartered. This could put significant financial and professional strain on an employee if he or she must travel to fight a legal battle.

An offset clause allows an employer the permission to deduct income from an employee’s paycheck if the employer alleges that the employee has caused the company damages. Generally, companies are only allowed to deduct things such as payroll taxes from an employee’s paycheck without permission. Finally, an arbitration clause requires that any disputes will be heard and settled via an arbitrator, rather than in open court. This can limit the ability for an employee or party to sue the company in a general court of law.

As these are only a few of the most common clauses in boilerplate contract language, it is apparent that this can be a complex legal situation. Most employees in California who encounter wage disputes seek the advice of experienced business law attorneys. Attorneys who focus on this area of law will be in the best position to discuss the path that best fits their clients’ needs.

Source:, “Why you should pay attention to contract boilerplate language“, Andrew Knoll, Accessed on Oct. 26, 2016



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