Why Providing a Job Offer Letter is Important

We all know how important it is to periodically review your employee handbook and other company documents outlining your employment obligations to employees. The offer letter, which can be different to an employment verification letter, is one of the first documents outlining the terms of your engagement with new hires. Making sure it addresses some critical elements can save you time, headaches, and even money down the road.

In addition, a well-crafted offer letter can be a simple way to demonstrate to your new employee that they are joining a professional and well organized company. This is particularly helpful for a startup or small company as it conveys to the new hire that while the company may be small or new, it has some standard and thoughtful infrastructure.

With hiring on the rise in Massachusetts and across the country, you may be bringing more people on board. To help you onboard new employees smoothly, here’s our guide to job letters and how to get them right.

What is a Job Offer Letter?

A solid offer letter outlines the final details of the position and serves as a document of reference for both the employee and employer. By providing the key points of the position both parties have agreed to, it can serve to eliminate future questions and even legal challenges.

What are the Key Things to Include in a Job Offer Letter?

Topline details in a job offer letter should include:

• The name of your company
• The specific title/position for which the person is being hired
• The name of the supervisor to whom s/he/they will report to
• Expected start date, time and location
• Position status; full-time or part-time, exempt or non-exempt

What Else Should You Include in a Job Offer Letter?

As you go through the hiring process and start to make job offers, remember that there’s more to the offer letter than the new employee’s title, start date and salary. Here’s what else you need to include in a job offer letter.

Pay Rate and How it Will be Paid

There are some nuances to how this is communicated. When we write offer letters for our clients, we always recommend that pay be stated in per-paycheck increments and annually. We do not want to imply that we are committing to a year of employment rather than at-will employment.

Other Compensation

Don’t forget to include information on bonus eligibility, relocation reimbursement, sign-on bonuses, etc., including when payable and any special terms such as pay back of reimbursements upon termination within some period of time. If you pay bonuses, the offer letter should be clear about whether or not they are guaranteed. If they are not guaranteed, clearly outline how bonuses are earned.

Benefits

How many details you include about benefits can vary. You’ll want to provide the general terms, and if you have some benefits that are above average and real selling points to the new employee, you may want to mention these. On the other hand, in general, you should not include specific plan provisions or commit to specific cost-sharing terms, as these are subject to change during the course of employment. We typically recommend that a general reference to benefits be included and that you send a brief benefits summary that the candidate can reference for more information. This allows you to keep the basic format of the letter standardized, and changes only need to be made on the benefits summary.

At-will Employment Statement

A paragraph that includes an “at-will” employment statement that expresses both the employer’s and the employee’s right to end the employment at any time, within the bounds of the law. At-will employment status is state law-driven, so if you are making offers for companies based outside of Massachusetts, be sure to check that state’s rules.

Details on Other Supporting Documents

The offer letter should reference what other items must be signed and returned, such as a confidentiality or non-compete agreement or forms authorizing background checks and noting that the offer is contingent on signing these documents and/or passing a background check. Include these forms in the package with the offer letter, as it is better to share these in advance in case there are issues with any of the provisions within them.

Closing Statement

The letter should close with contact information for the person who can answer questions about the offer or the job, and perhaps, the date by which the signed acceptance letter should be returned.

What Should a Job Offer Letter Not Include?

Along with what you should include in a job letter, there are some things you should leave out. Here’s a couple to be mindful of.

Specific Language Around Money

Words like “annual” and “guaranteed,” particularly when it comes to money. Salary details should be referred to in hourly, weekly or monthly rates, based on your pay periods. Again, if you state “an annual salary of $XXX dollars,” an employee could possibly infer that s/he will be employed for a full year.

Non-Specific Language Around Certain Practices and Policies

Statements about company practices and policies that could be considered binding. By using non-specific language and prefacing policy/procedure with “in general” or “typically,” indicates that these references are an overview. Leave specifics for the employee handbook and onboarding meeting.

Who Should Write Job Offer Letters?

If the letter is not being written by a professional well-versed in employment law, it is a good idea to have the final draft of your offer letter reviewed by a legal or HR consultant. You want to be sure that it complies with employment laws and that you are not making unintended promises that may be construed as contractually binding.

Additionally, non-compete language and confidentiality requirements are generally better in a separate document as they bog down the letter, which is a positive invitation to join the company rather than a legalistic document of employment obligations.

We generally recommend that the offer be contingent on signing these documents or passing a background check, if relevant, but not incorporated into the offer letter. Once the language is finalized, the offer letter can be saved as a template for future use.

We Can Help your Business with Job Offer Letters

At Insource, our staffing professionals have been specializing in the full cycle of the hiring process for years and are experienced with writing offer letters, as well as with the other documents you may want to consider as you bring new employees on board. We help you develop and implement an overall recruiting and hiring strategy and learn about your business to responsibly and positively represent it to candidates. And we create or review, and update everything from offer letters to policy and procedures to help protect you from bad hires.

Our unique business model allows us to do this in a way that saves you and your staff valuable time and money. Our hourly billing is more cost-effective than using a contingency or retained search firm to recruit top talent, and engaging us allows your focus to remain on the critical business functions that can’t be outsourced. For more information, call Insource Services today at 781-235-1490 or email us.