Make it official with an employment offer letter

When you're ready to offer an applicant a job working for your small business, the best way to make that offer is through an employment offer letter. An employment offer letter makes it completely clear what you are offering the potential employee, so there can be no confusion. While you probably will call the applicant initially to offer them the job, sending a written employment offer—via email or snail mail—should be your next step.

What to include in an employment offer letter

An employment offer letter should be typed (or emailed) and written in businesslike language. It is meant to provide an overview of the position, responsibilities, and compensation the job entails. You should let the applicant know you are sending the letter when you verbally offer them the job. The letter should include:

• The date of the offer
• The name and address of the company and applicant
• The job title
• The job description, including whether it is full- or part-time and, if applicable, the shift
• Name of the supervisor for this position
• The salary (described as a weekly amount or per-pay-period amount) and compensation package
• The terms of employment (such as at-will, meaning it can be terminated at any time)
• Basic information about benefits (such as health insurance, life insurance, disability insurance, 401(k) plans, educational assistance, and flexible spending plans) and eligibility/time to qualify
• Paid leave (such as vacation, sick leave, personal days, and holidays)
• The start date of employment
• The expiration date of the offer
• A statement that the offer of employment is subject to the employer's polices, handbook, and/or employment contract
• A statement that the employment offer letter is meant for information only and is not a binding contract
• A section where the applicant can sign the letter to accept its terms, along with instructions for returning it

It's important for the employment letter to comply with all laws applicable in your state. You can write an employment offer letter yourself or you can hire an attorney either to write it for you or to review one you have written. Another option is to use an online service provider to create the employment offer letter for you.

Conditional employment offer letter

An employment offer letter offers the applicant the position, but sometimes you may wish to make the offer conditional. A conditional employment offer letter offers the applicant the job only if certain conditions are met. These could include passing a drug test or a background check.

The employment offer also could be contingent on the applicant's complying with immigration laws and being legally able to work in the U.S., or signing a confidentiality agreement. Once the conditions are met, the applicant can begin the job. All relevant details of what you are requiring should be included in the conditional employment offer letter.

Employment offer letter vs. employment agreement

An employment offer letter lays out the basic particulars of the job and compensation and offers the job to the applicant.

By contrast, an employment agreement is a detailed contract that lists company policies, procedures, and requirements that apply to the employee. An employment agreement is much more in depth than an offer letter. Once the applicant accepts the offer letter, they can be asked to sign the employment agreement, as part of their onboarding process.

A well-written employment offer letter clearly states what you are offering the applicant. It also allows the applicant to get important details about the position so they can determine if it is a good fit for them. The employment offer letter helps avoid any confusion about the job's responsibilities and compensation so that both you and your soon-to-be employee are on the same page about the job.