The Importance of Offer Letters

It is an exciting time when you have worked your way through the entire recruiting process and you have extended a verbal job offer . . . and even more exciting, when the candidate eagerly accepts! You have reached an important turning point in the relationship because this individual is about to become your new employee. It is now time to “seal the deal” by putting the offer of employment in writing, but you must use caution. An offer letter is an important tool used to recap your verbal offer and summarize it in writing to avoid any miscommunication. The following should be included in the job offer letter:

• Position title and responsibilities.

• Start date; where they should report and to whom on their first day.

• Compensation. Be sure to use the word “annualized” so you don’t infer a one-year contract or guaranteed payment by stating their wage is “$XXXXX/annually.” Rather, include the pay schedule of how they will be paid the annualized salary by adding, for example, “which is $XXXX/bi-weekly.

• Summary of benefits, to include waiting periods and employee cost – be sure to use a disclaimer that the official documents will be the final authority and that your Company may change benefits at any time at Management’s discretion.

• Contingencies. Ensure the candidate understands that the job offer may be rescinded based on the results of their drug screen, background or reference check discrepancies, or refusal to complete a confidentiality and noncompetition agreement, etc.

• At-will statement. This is extremely important. Even though it is in your employee handbook or job application, it should be repeated in the offer letter now to avoid litigation later.

• Acknowledgement. Request the candidate sign an acknowledgment of the offer letter stating they read, understand, and agree to the terms of employment being offered.