What makes a good job offer letter?
So you’ve found the perfect candidate - congrats! The last piece of the puzzle to getting them in the door is sending them a great offer letter and getting them to sign on the dotted line.
Crafting your offer letter
- Job title
- The title of the role and a brief description of what’s expected.
- How much they’ll be making, any equity being offered, bonuses, what the commission structure is like, etc. For hourly employees, it’s a best practice to use the hourly rate in your offer letter, rather than an annualized version of it. For salaried employees it is best practice to show compensation in terms of your pay period (weekly, biweekly, or even monthly).
- Clearly explain how often they’ll get paid.
- Talk about any benefits they’ll be able to take advantage of, like health insurance or a 401(k) plan.
- Start date, office location, and work schedule.
- When does the offer expire? And who should they reach out to if they have any questions? Break it all down here.
- Who their manager will be and if they will manage .
- If your new hire has to sign a non-disclosure agreement or pass a drug test or background check (credit, criminal, driving record, employment or otherwise) in order for the offer to be valid, make sure that’s clearly stated.
- Include that hiring is contingent upon the new employee completing all of the new hire paperwork.
- To accept the offer, you’ll need to add a space where the employee can sign to agree to the terms outlined. You can do this by having them print and sign a copy or by sending them a secure version through an e-signature tool, like DocuSign or HelloSign.
Other important details to include
Do you want your offer letter to be seen as a binding contract? If not, make sure you include your employee’s at-will status. Unless you live in Montana, you probably live in an at-will state. (If you’re unsure, check with your local state employment agency.) This means that in these states, companies can end their employee relationships at any time without having a clear reason. If your employee is at-will, make sure you include this in the offer letter.
Exempt or nonexempt status
Your employee will also either be stamped with exempt or nonexempt status, which you’ll want to add in their offer letter. Exempt folks are typically salaried and therefore don’t receive overtime pay and may not be eligible for minimum wage. On the flip side, nonexempt employees are eligible for these things and are often hourly.