An offer letter, or offer of employment, is a document that outlines the work arrangements and expectations sent to a job candidate before they become an employee.
When is an offer letter sent?
An employer usually sends an offer letter to a potential employee during the hiring process once they have accepted the job via email or phone.
After the employee receives the offer letter, they should sign their signature indicating that they agree with the terms and formally accept the position. Most offer letters are also reviewed and signed by the hiring manager or a senior member of the company.
What should you include in an offer letter?
An offer letter is typically written in a standard format and sent to the new hire in an email. It should include the following:
- The employer’s official letterhead or company name
- Job title and job description
- Start date of employment
- Job duties and responsibilities
- Working hours and work schedule (full-time or part-time)
- Employee benefit and perk entitlements
- Compensation package details (starting salary, base salary, pay period, bonuses, and commissions)
- Any termination policies or at-will employment statements
- All legal terms and conditions of employment ( non-disclosure agreements, confidentiality agreements)
- Contact information
Are employment offer letters legally binding?
An employment offer letter can function as a binding contract and employment agreement. Legally binding means that the new employee and employer must follow the terms and conditions stated in the letter as agreed upon during the interview process. Any breach of the employment contract is subject to a lawsuit.
Before the employer signs an offer letter, they may request the employee to undergo a reference check, background check, or drug test.
Can you negotiate an employment offer letter?
Yes. Job candidates are within their rights to negotiate the details of the job offer letter, including the salary, benefits, and any terms and conditions, before signing.