Overview: An offer letter provides an important opportunity for employers to confirm the verbal offer of employment and avoid any potential confusion on the part of the employer or prospective employee regarding the terms of the employment relationship. The offer letter should include the terms of employment, including position, salary, start date, as well as a date by which the candidate needs to respond to the offer.
The offer letter is also a prime opportunity for the employer to remind the new hire of his or her at-will employment status and disclaim any contractual relationship. To further avoid an inference that the offer letter is a contract of employment, the offer letter should not provide any estimate of the duration of the employment, the length of time in which salary will be provided, promises of future compensation or an explanation of circumstances under which employment may be terminated.
Offer letters should also clearly state if the job offer is contingent upon certain representations by the employee, as well as the satisfaction of certain conditions. These can include reference checks, employee background checks, medical exams, drug tests, and/or driving records. If not done so already, employers should provide any required notifications to the employee if such prescreening measures are necessary and attach the appropriate authorization for the candidate to sign permitting the release of such information to the employer.
Trends: Employers should always consult their state laws before sending a written offer letter. Depending on the state, employers may be required to send certain terms in writing to a new hire. Also, some states require employees to sign the offer, while other states may discourage the signing of an offer because the offer may then be considered a contract of employment.
Author: Melissa A. Silver, JD, Legal Editor
Updated to reflect legal developments regarding Philadelphia's wage equity ordinance.
Updated to reflect forthcoming amendment regarding social media accounts of prospective and current employees.
Updated to include hiring requirements in the San Jose Opportunity to Work Ordinance, effective March 13, 2017.
Updated to reflect employer limitations on obtaining salary history of job candidates in the forthcoming state Act to Establish Pay Equity, which strengthens existing equal pay laws.
Updated to reflect hiring requirements under the Workplace Privacy Act, effective July 20, 2016.
Updated to include employment offer requirements under Portland's ban the box law, effective July 1, 2016.
Enhanced to improve the comprehensiveness, organization and scope of coverage.
Updated to reflect hiring requirements under the forthcoming social media privacy law.
Updated to reflect Austin's ban the box ordinance and its conditional employment offer requirements, effective April 4, 2016.
In-depth review of the spectrum of New York employment law requirements HR must follow with respect to making employment offers.
HR guidance on terms to include in an offer letter.