Basic Training: Unwritten Agreements--Are They Valid?

By Nina Kaufman

Opinions expressed by Entrepreneur contributors are their own.

Are verbal agreements valid? Does it make a difference if they come up in an employment situation?

Q: What are the laws regarding verbal agreements concerning workers' compensation cases?

A: Generally, most states provide that verbal agreements are enforceable, just like written agreements (except for certain defined exceptions in the law, such as real estate brokerage contracts). The problem with verbal agreements is that, to quote Louis B. Mayer, "They are not worth the paper they're printed on." Any number of issues can arise in the course of an employment agreement--such as expectations concerning working hours, duties, pay structure, entitlement to bonuses, availability of benefits, opportunities for promotion or profit-sharing, etc. With only a verbal agreement, you are reduced to a "he said/she said" situation that can often be difficult to prove.

That said, by law, employers need to have workers' compensation insurance to cover any injuries to their employees. This is usually a state-mandated requirement, so any verbal agreement that your employer gave that there would (or would not) be workers' compensation benefits available to you has no bearing. In fact, in many states, there can be serious penalties levied against an employer for failing to have workers' compensation insurance for covered employees. If you are injured on the job in the proper performance of your duties, you should have a right to avail yourself of workers' compensation benefits.As your next step, I'd recommend that you speak to an employee-side employment attorney who has some familiarity with the workers' compensation laws of your state. This should enable you to get more clarity on your situation and your options.

Nina L. Kaufman, Esq. is an award-winning New York City attorney, edutainer and author. Under her Ask The Business Lawyer brand, she reaches thousands of entrepreneurs and small business owners with her legal services, professional speaking, information products, and LexAppeal weekly ezine. She also writes the Making It Legal blog.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Leadership

How to Align Your Team Through Every Growth Phase and Reach True Success

Entrepreneurship demands adaptability, with success hinging on understanding and evolving your business's center of gravity through each phase of growth.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

Leadership

'A Light Bulb Went Off' When Erin Andrews Saw a Glaring Gap in the Sports Market. Now, Taylor Swift Wears Her Clothing Line.

WEAR by Erin Andrews co-founders Erin Andrews and Constance Schwartz-Morini explain how they stitched together a dynamic apparel business.

Business Solutions

Use These Advanced Tools and Training to Transform Your Photos

Add excitement to a lifetime of photos with training and robust AI-powered editing tools.

Growing a Business

7 Things Every Growing Business Needs to Monitor to Scale Successfully

Discover the key factors every growing business must monitor to ensure successful scaling. From financial health to customer experience, these seven critical areas can help sustain growth and streamline operations.

Leadership

How Your Communication Style is Sabotaging Your Leadership — And 4 Ways to Fix It

Great leadership hinges on clear communication — listening actively, using a supportive tone and aligning body language to build trust and engagement.