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 salary history restrictions, effective October 6, 2017.
Updated to reflect amendment to Illinois Human Rights Act regarding religious accommodation, effective August 11, 2017.
Updated to reflect the New York City 'ban the box' final regulations, effective August 5, 2017; forthcoming New York City law prohibiting inquiry into an applicant's salary history, and forthcoming offer requirements under the New York City Fair Work Practices ordinances.
Updated to include amendment regarding social media accounts of prospective and current employees, effective July 31, 2017.
Updated to include offer requirements under the Seattle Secure Scheduling Ordinance, effective July 1, 2017.
Updated to reflect hair testing law, effective July 1, 2017.
Updated to reflect forthcoming law regarding salary history inquiries.
Updated to reflect amendments to criminal screening law, effective May 26, 2017.
HR guidance on terms to include in an offer letter.