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 Cincinnati ordinance regarding salary history inquiries, effective March 13, 2020.
Updated to include offer and hiring requirements under the forthcoming Seattle Hotel Employees Job Retention Ordinance.
Updated to reflect the forthcoming Fair Chance to Compete for Jobs Act of 2019.
Updated to reflect addition of salary history law guidance.
Updated to reflect protections regarding salary history inquiries, effective January 1, 2020.
Updated to reflect change in applicability of Columbia ban the box law, effective December 3, 2019.
Updated to reflect forthcoming Waterloo ban the box ordinance.
Updated to reflect Kansas City law regarding salary history inquiries, effective October 31, 2019.
Updated to include law regarding salary history inquiry restrictions, effective September 29, 2019.
HR guidance on terms to include in an offer letter.