Put it on Paper
Accepting a job applicant into a position is an exciting move, often coming at the end of a busy schedule of interviews and research.
To make sure the new hire is on the same page with the employer, it’s a good idea to have an offer letter ready to go, even if the employer has given a verbal offer to that person.
It’s a way to make sure all the important initial information is covered to help the company avoid issues later. An offer letter also gets some of the boilerplate information out that wasn’t covered before.
“It sets the expectations from the beginning,” says Paige McAllister, vice president of compliance at Affinity HR Group. “And it answers a lot of questions that may not happen during the interview process.”
Most applicants will ask about pay and benefits in interviews. But things like overtime exemptions, union opportunities and specific job expectations might not get fully explained.
First and foremost, an effective offer letter welcomes the new hire to the business. It lets them know, in an official way, that the company wants them as an employee, McAllister says.
The rest of the letter will make sure that person is up to speed for the first day.
Describe the Job
An offer letter should include an outline of the specific duties in the position. McAllister says that should include:
- General job expectations
- Exempt / non-exempt from overtime pay (based on Fair Labor Standards Act)
- Classification: full-time/part-time/temporary
- Wages or pay period information for salaried workers
- Requirements like non-solicitation or confidentiality agreements
Have the new hire sign the letter. This helps the employer know that the prospective employee understands what’s expected and that they won’t dispute the pay amount or duties later.
The description should cover all job duties but still be general. Specific policies and practices can be covered after the person has started.
“I don't think you want too much detail,” McAllister says. “You don't want the whole three-page job description in there.”
It’s also a way to help the employer avoid legal trouble. McAllister says that it’s important to always include a line in the letter that employment is on an at-will basis, meaning that an employee can be terminated for any legal reason.
Prepared For Day One
An offer letter is also an effective way to pass along information for the new employee’s first day. McAllister says it could include tax forms, direct deposit requests and other onboarding paperwork that can be completed ahead of time.
The letter can summarize benefit information so that the new hire can consider their options.
It also gets logistical information across, like when to show up, where to park and where to go at the job location.
And if the new hire has questions, the letter should have clear contact information for the right person at the business.
In some states, a background check could also mark the start of the background check process. Those checks could include criminal checks and driver’s license verification.
Particularly for criminal background checks, some states require that a job offer is made before conducting one. These laws were passed to try and reduce employer discrimination of applicants due to any criminal history.
The Society for Human Resource Management has state-by-state information on these rules.
In these cases, an employer might give a conditional offer letter. That conveys the same tone as the regular letter but says that a background test, drug test or other process has to come first.
“You're still giving them all that information,” McAllister says, “but you're saying it’s conditional upon successful completion of whatever it is.”
Without a conditional letter, it can be tougher to terminate the hiring process if the person fails a background check.
Make sure to include a potential start date in a conditional offer letter.