Question:
Looking forward to 2022, I anticipate hiring more employees and am curious what to include in our offer letter to potential new employees?
Answer:
Offer letters are a valuable way to inform a potential new employee about their new job and the conditions of employment. A properly written offer letter can minimize later misunderstandings about the nature of the job. The pre-employment offer letter should include specific details about 1) the job duties and schedule, 2) compensation, 3) at-will employment status, and 4) any pre-employment conditions that apply to the offer.
The pre-employment offer letter should include details about the job title, the general work schedule, and anticipated starting date. For example, indicating that the job will primarily have an overnight work schedule allows potential employees to consider their willingness to work that schedule and avoid misunderstandings about scheduling expectations. Given the COVID-19 pandemic, you may also want to identify whether the work is remote, in the office, or a mix of both. Attaching an accurate job description is recommended.
Next, the pre-employment offer letter should set forth the pay rate and benefits, and whether the position is exempt or nonexempt. This informs the potential employee the extent to which state and federal employment laws will apply to the job. This classification may impact issues such as overtime and meal and rest breaks. Given the importance of this classification, consult with counsel if you have questions about the exempt or nonexempt classification of a position. The pay rate is most frequently indicated as an hourly rate or annual salary. It is important to maintain consistency in the pre-employment offer letter, so if the compensation is an hourly rate, then state the hourly rate instead of an estimate of the annual compensation.
Indicate whether the position is full- or part- time, and generally the number of hours the candidate can expect to work each week. This classification is important for indicating the potential benefits available to an employee. For instance, part-time employees are often ineligible for benefits such as insurance and accrued vacation.
Employment in California is generally considered at-will, meaning the employee or the employer may end the employment relationship at any time, with or without cause. If the position is at-will, then it is important to explicitly state it is an at-will position and include the explanation of at-will status so there is no confusion about a promise of continued employment.
The pre-employment offer letter should also indicate any conditions placed upon the job offer. For example, California recently enacted the Fair Chance Act which prohibits employers from inquiring about an applicant’s criminal history until after a conditional employment offer. Use the pre-employment offer letter to set forth all of the applicable conditions that must be satisfied before employment begins, such as passing a post-offer medical exam, a post-offer drug test, or post-offer reference and/or background check.
Finally, include a deadline for the individual to accept the job offer by returning a signed copy of the offer letter, and indicate that the offer will be considered withdrawn if not accepted by the deadline. You should include at the end of the letter an acknowledgment and acceptance for the job candidate to sign showing an understanding of and acceptance of the offer. Properly drafted offer letters can help start the employment relationship with a new employee on the right path.