What goes in an offer letter? I get this question more frequently that you might expect. Of course all you have to do is enter that question in an Internet search and you will find plenty of advice. In fact here is one of the most comprehensive lists I have seen. If you included everything in your offer letter it would be about 14 pages long.
Must be included
All good letters need to have an introduction and a welcome statement. You want to take every opportunity to begin the “engagement” process. The sooner you get people connected the better it will be.
A position title and the wage to be paid are important. One thing that is often a mistake is how the offer is stated. It should be stated in the minimum pay period you pay. If you are paying on an hourly basis, that is easy. Most exempt employees, however, tend to think in terms of annual salary, so you can say something to the effect of “You will be paid $2500 bimonthly, which annualizes out to a $60,000 per year.” Additional compensation possibilities should be included.
Unless you are offering a specific employment contract you want to make sure a statement that employment-at-will is the standard is included.
If the offer is pending successful completion of either a drug test, a medical exam or a background check make sure that notification is included.
A statement about benefits and the eligibility period should be included, but rather than putting all the information in the offer letter you can state that complete information will be covered in orientation.
This is not a comprehensive list, but one thing that needs to be included is a statement on agreements.
Many companies have confidentiality agreements, noncompetes and nondisclosure agreements. Depending on the level of position they agreements may be signed up front or on the employee’s first day of work. If you do the latter it is important to make sure you let the employee know they will be required to sign those agreements. According to Theodore Olsen of Sherman & Howard LLC, in a recent Pennsylvania court decision the court ruled that “the offer letter was not the governing contract, but was basically part of the negotiation process.” The case dealt with an employee violating a noncompete he had signed. He had argued that the offer letter was his contract. The company stated that the employee had signed a binding agreement after he had started work. The PA Supreme Court agreed with the company because in their offer letter they had stated that he would be required to sign “an employment agreement with definitive terms and conditions outlining the offer terms and conditions contained herein.”
So the next time you are crafting an employment offer make sure you include the standards, but also make sure you include this statement about what agreements will be included.
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