Seven Deadly Sins Of Offer Letters
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Hi everybody, it’s Amy Letke, your self-proclaimed Doctor of HR-ology. I’m coming to you today to talk about the Seven Deadly Sins of Offer Letters. Would you believe it: Offer letters for employees can get employers in more trouble than not. If you’re a savvy employer you want to know what to say and even more importantly, what not to say to keep your company out of trouble and reduce your risk.
Let me share with you what I see as the Seven Deadly Sins of Offer Letters from an HR practitioner standpoint.
The Seven Deadly Sins of Offer Letters
#1 Not Listing The Type Of Position Offered and What It Starts
First of all, sometimes I see that the type of position you’re offering to your candidate is not even listed on the offer letter. You’ve got to tell them what the job is and when it starts. Don’t forget to do that.
#2 Not Explaining If The Job is Exempt or Non-exempt
Item number two of the Seven Deadly Sings of Offer Letters is not listing if the job is exempt from overtime or non-exempt from over time. So those of you who might not know what I’m talking about, that means are you paying them overtime or are you not paying them overtime. You need to know what that is and if you’re not sure about that you’re going to need to check that out (Click here to read our blog about the difference between exempt and non-exempt)
#3 Not Stating If There Are Any Contingencies For Employment
The third thing you need to pay attention to is if you are going to make an offer to a prospective employee and require some contingencies. For example: maybe the terms of the offer are subject to a background check, reference check, or a successful completion of a drug test. Those are things you’re going to need to say in the offer letter. So if there’s a challenge or that future employee needs to give notice to their current employer, they need to know ahead of time that these terms are absolutely critical.
#4 Not Mentioning The Pay Specifics
How about the pay specifics? How are you going to pay the person, what you are going to pay them and when are you going to pay them. This is very important for the new hire to know. You also need to mention the benefits. What benefits are you providing? Are you going to be offering these like vacation, stock options, bonuses, health insurance, or a retirement plan? If you going to be offering that as part of your offer letter package you need to give yourself some important language. You need to say that those benefits will be subject to the terms and conditions of those plan documents.
#5 Not Saying That You Are An At-Will Employer
If you’re in a state where you are an at-will employer, you need to mention that in your offer letter. One of the common concerns about offer letters from a variety of my legal friends is that those offer letters actually become contracts of employment. That is something you want to make sure you avoid. If you’re in an at-will state, make sure you indicate that in your offer letter.
#6 Not Stating When The Offer Expires
Another deadly sin of offer letters I see is failing to say when the offer expires. How many days are you going to give a prospective employee to accept the conditions of your offer? Sometimes employers forget to put that important point in the offer letter and they could be waiting a long time if the prospective employee thinks the offer is good forever.
#7 Not Having A Place For The Prospective Employee To Accept
Finally, make sure you get acceptance of the terms and agreements from the prospective employee. That way, there’s clarity on the job you’re offering and they know what they are getting into when they join your firm.
I’m Amy Letke. If you would like to download this free copy of our Sample Offer Letter (without all the red marks), fill out the form below to get a copy.
Remember: This is HR advice, not legal advice. If you need some legal advice, just let me know and I can get you to a great person who can help you.
In the meantime, stay tuned for more great HR updates and we appreciate you watching “The Seven Deadly Sins Of Offer Letters.” Have a great day!