What terms and conditions an Offer of Employment letter should contain?

A written Offer of Employment is a legally binding document. It should contain main terms and conditions, which later are included in the Employment Agreement, provided the offer is accepted. Accordingly, the employers should be very careful in drafting it. Make sure you don’t put something in this letter if it is still up for discussion or you are not sure yet that you want it to be included in the employment agreement.

An Offer of Employment is a unilateral contract, meaning its acceptance by the offeree makes it an enforceable contract. Why an employment contract should be drafted anyway? Because an employment contract is a more extensive document, it may include additional terms and conditions. The offer of employment letter contains the main terms of the agreement. E.g. offered position, salary, paid vacation and sick leave must be included in the Offer of Employment. An employment agreement that are developed once the offer is accepted may supplement is with various corporate procedures, additional benefits, non-disclosure/confidentiality requirement, etc. You can give more but you cannot take away what was initially offered after it was accepted (can certainly withdraw the offer before its acceptance though).

An Offer of Employment can be short or long depending on the parties’ discussions during the interview process. As you can imagine, the higher proposed position is the more terms the offer will contain. Compare the duties and responsibilities as well as bargaining power of the one to be a financial officer of the company with the one applying for a position of the filing clerk.

The simplest offer of employment usually contains the following:

·        Title

·        Job description

·        Compensation: 1. Salary 2. Equity compensation if any

·        Paid vacations, sick leave, maternity leave

·        Working hours and starting date

·        Any other agreements

Usually the company retains the services of a business attorney to draft the Offer of Employment letter. Since this document is a legally binding agreement it is very important not to miss anything. Later the same attorney can prepare an employment agreement based on the earlier drafted terms and conditions, saving some money in legal fees to the company.