Deconstruction of an Offer Letter

You may be hiring for the first time, and asking "what is supposed to be included in an offer letter?" We're here to help! There are eleven key elements go into an offer letter – some to set expectations, some to protect yourself, and some to ensure that your offer complies with state and federal guidelines.

1. Position/Title – accurate information here is important for gathering info about what is expected in the role and establishing industry standards.
2. Name/Position of Supervisor – This is especially critical for the onboarding process; your potential employee should know who they will be reporting to in the role, and how their leader falls into the company hierarchy.
3. Scheduling Expectations – What are their contract hours? Is this a full-time or part-time position? Will they be expected to work on weekends, or after 5?
4. Exempt/Nonexempt Classification. It is important to correctly classify employees as exempt or nonexempt from federal and state overtime requirements to avoid penalties or claims for unpaid wages. Please seek legal counsel if you have any questions about how these classifications affect offers in your state.
5. Duties – While it is good for your new hire to understand their day-to-day responsibilities, it is important to note that the items mentioned are not comprehensive, and that job duties are subject to change.
6. Bonuses/Commissions – Your offer letter should include a brief overview of your bonus and commission structure, including what it is based on, and how/when it will be dispersed.
7. Base Salary -This one is pretty simple; before all the bells and whistles, what will your employee be walking away with? Will they be paid weekly, biweekly, or monthly?
8. Benefits – Your offer letter should briefly describe what benefits are available to your employees, such as medical, dental, and vision care. This is also the place to outline your PTO policies, sick leave, etc.
9. At-Will Employment – If the employment is at-will your offer letter should outline that either party retains the right to terminate the relationship at any time, with or without cause or advance notice.
10. Prior Employer Restrictions – This should be a short statement requiring disclosure of any non-competition or non-solicitation agreements from former employers, and prohibiting the unauthorized use of confidential information gained from previous employment.
11. Contingencies – This is the part that protects you the most; include a brief statement that the offer is contingent upon a background check clearance, reference check, and proof of the employee's right to work in the U.S., as required by law and your corporate policies.