How to produce an offer Letter without contractual Implications
Updated on : 2020-Dec-03 16:21:21 | Author :
How to produce an offer Letter without contractual Implications
When the recruiting part has been completed and an employer has created a decision on the candidate it needs to hire for a specific position, the employer usually makes a verbal supply and follows up with an employment offer letter. The signature of candidates on an offer letter confirms that the candidate has accepted the position and its terms. However, the employer should be aware of the language utilized in the offer letter, or it should be construed as an employment contract or agreement.
In an attempt to avoid making a contractual agreement, the offer letter should contain an announcement that the employment is at-will (except in Montana; see its Wrongful Discharge from Employment Act for restrictions). Employment at will is a philosophical system which means the employment relationship is also terminated by the employer or worker at any time and for any or no reason. Once contract language is introduced, the employment-at-will relationship is negated. Eliminating verbiage concerning employment for an explicit amount of time or that produces guarantees regarding future earnings or bonuses is a consistent way to keep employers out of court. Employment contracts were traditionally reserved for executives; but, the effort to recruit and retain specialized skilled and technical staff has created it necessary to use the offer letter at different levels.
An employer should be aware of what the provisions of an employment contract include so that it will not inadvertently add these elements to its offer letters. Common topics lined in an employment agreement that should be avoided include the period of the job (unless for a temporary or fixed-period assignment), job duties and necessities, and grounds for termination or resignation.
An should ought to produce a generic offer letter with a standard format that may be used for any position being filled by the corporate.
The standard form should allow for the insertion of the applicable position, the Fair Labor Standards Act (FLSA) exemption status, start date, full- or part-time status and rates of pay.
Step 1: Opening and Basic Information
The offer letter should begin with a statement that features information like the position title, start date, orientation date, full- or part-time status and applicable shift. Employers should avoid using phrases that imply an indefinite way forward for employment, like "job security," "we're a family company" or "in the long run." Organizations might in addition want to include language that the company has the discretion to change or revoke data contained inside the offer letter throughout the course of a worker's employment.
Step 2: Job-Specific Information
The offer letter should provide details on the salary and pay periods. Employee compensation should be stated in an hourly, a weekly or a per-pay-period salary amount to avoid the expectation of receiving the full annual salary if the employee is terminated midyear. An annualized equivalent may be mentioned, but only after pay is clearly stated in one of these increments. It is practical to include the supervisor or manager to whom the employee will report, as well as the performance development or evaluation periods for company employees.
Step 3: Benefits Information
Employers should add a summary of the applicable benefits and eligibility requirements for health care insurance, 401(k) plans, life insurance, educational assistance, flexible spending accounts, short- and long-term disability, and accidental death and dismemberment coverage.
Step 4: Paid Leave Information
The amount of leave that the employee is entitled to should be described next. This should include holidays, paid time off or vacation, sick and personal time.
Step 5: Terms of Employment
Another paragraph should include the conditions of employment. This section typically covers items such as successful completion of drug testing and background checks, signing of confidentiality agreements, compliance with immigration law and completion of a Form I-9. The conditions should never include statements about job security, promises of future employment or contractual agreements. The individual can attest via signature that he or she is not bound by any noncompeting agreements or other restrictive covenants with former employers.
Step 6: At-Will Employment
A statement that the employment relationship is at will should to be added at this point. It allows the employer the right to terminate the employee at any time, with or without cause, and gives the employee the same right to resign from the position. A contract binds both the employer and the employee; an at-will statement may alleviate that commitment. If statements were made by the employer during the interview process, either orally or in writing (e.g., in an offer letter), that imply an employment agreement, then the employer may have an obligation to uphold it as a contract. The employers should take legal guidance in those matters.
Step 7: Closing
The offer letter should close with information regarding a point of contact for questions or concerns. An employer can include sentiments that express the organization's excitement in bringing the employee on board. The letter may also contain a few words about the company culture. Finally, the letter should end with a line for the employee's signature and date. Organizations may want to include a sentence that the offer letter is for informational purposes only and is not a binding contract.
Step 8: Legal Review
As with any document that an employer presents to its employees, it is imperative that the offer letter template be reviewed by legal counsel prior to implementation.
Examples
Scenario1:
After an extensive interview process, an employer decided on a suitable candidate. The employer verbally offered the position to the candidate and followed up with an offer letter. This letter stated the company was financially sound and that the candidate "would have job security with the company even during these tough economic times." The candidate accepted the position and signed the offer letter. About two months after the hire, the employee was told that the company would need to lay him off as part of a reduction in force. The employee immediately sought legal guidance because the offer letter stated that there would be job security and did not include an at-will statement. Although the suit was a financial burden to the company, it taught the employer a lesson in how to prepare an offer letter using appropriate language that does not constitute an implied contract.
Scenario2:
An offer letter was drafted after a candidate accepted an oral offer of employment. The letter confirmed an annual salary amount that was agreeable to the candidate, who then signed and returned this letter to the employer. Six months into the job, the employer felt the employee was not a good fit and decided to terminate the employee. The employment was at will; however, there was no statement of such in the offer letter. In addition, only the annual salary was quoted in the letter, which implied that the employment was guaranteed for a year. As a result, the employer could not terminate the employee due to the implied duration of employment unless the employer decided to pay out the remainder of the annual salary. This employer no longer adds annual salary amounts to its offer letters, but quotes the pay on an hourly, a weekly or a monthly basis.
Conditional Job Offer Letter
[Date]
[Candidate Name]
[Street Address]
[City, State, Zip code]
Dear [Candidate Name]:
It is with great pleasure that…………………. [Company Name] offers you the designation of [job title]. You will be contacted to [Name, Title], and your start date is ……… [Date].
This is a full-time [exempt position that is not eligible for overtime/non-exempt position eligible for overtime pay after 40 hours in a workweek (include any relevant state daily OT requirements here)]. We are offering you a starting base wage of (INR)______ [per month] paid [monthly, etc.].
With this, your compensation package includes the following (these details are for information purposes and are subject to any policy or plan changes) options:
Criteria to participate in the company incentive bonus program, subject to the terms and conditions specified in the incentive bonus plan document.
A way for company stock, subject to approval by the Board of Directors and the terms of the company's stock option plan.
Eligibility for health and dental coverage, plan and flexible spending accounts, subject to plan terms.
Eligibility for company-paid benefits such as life insurance, short- and long-term disability and long-term care, subject to applicable waiting periods.
Paid time off (PTO) earned on an accrual basis.
Company-paid holidays.
This job offer is contingent upon the following:
[Insert any or all of the following:]
Completion of a satisfactory background check.
Passing a drug test.
Satisfactory reference checks.
Execution of an employment/noncompete/confidentiality agreement.
Obtaining _____ level security clearance.
Obtaining ____ certification/licensure.
[If applicable, add:
as soon as the above contingencies are successfully completed, this job offer will also be contingent upon receipt of results of a satisfactory physical examination designed solely to determine your physical ability to perform the duties of the position being offered to you.]
On your first day, you will be given an orientation by HR. This orientation will have completing employment forms, reviewing fringe benefits, introduction to management and touring the premises. Please bring appropriate documentation for the completion of your new-hire forms, including proof that you are presently eligible to work in India. Failure to produce acceptable documentation inside 3 days of hire can lead to immediate termination of employment in accordance with the terms of the Immigration Reform and Control Act.
Please indicate your acceptance of our offer by signing below and returning one copy of the letter, along with your original signature, to me no later than [date]. If you have got any questions on this offer, please contact [Name, Title] at [phone and e-mail].
We look forward to having you as a part of our team and believe you'll find this opportunity both challenging and rewarding.
Sincerely,
[Insert name]
[Insert title]
I have read and understood the provisions of this offer of employment and that I settle for the above conditional job offer. I perceive that my employment with [Company Name] is taken into account at will that means that either the corporate or I’ll terminate this employment relationship at any time with or while not cause or notice.
This offer shall stay open till [date]. Any acceptance postmarked once this date is considered invalid.
Date: ...............................
Signature: ...................................
UNCONDITIONAL JOB OFFER LETTER
[Date]
[Candidate Name]
[Street Address]
[City, State Zip code]
Dear [Candidate Name],
We are pleased to offer you the position of ________ at [Company Name] reporting to [Name, title].
This position offers a monthly salary of INR_____, which is the equivalent of INR____ on an annual basis. This position is considered exempt under the central and state wage and hour laws, which mean you, are not eligible for overtime pay beyond your salary.
[OR]
This position offers an hourly rate of INR__.__, which is paid on a weekly basis. This position will be considered a nonexempt position, which means that you will be eligible for overtime time pay for hours worked in excess of 40 in a given workweek [add in any relevant state OT laws here].
This is a full-time position, and hours of work and days are [insert schedule]. Extra occasional evening and weekend work may be required as job duties demand.
Full-time employees are eligible for company benefits, including __ [days/weeks] of vacation, which is accrued at the rate of _____ hours per biweekly pay period. We also offer health, dental and vision benefits, sick leave and company holidays. A summary of company benefits is enclosed with this letter. Further details will be provided at the new-hire orientation program, scheduled during your first week on the job.
Your employment with our company is at-will, which means that either you or the company may terminate the relationship at any time.
As previously discussed, [day, date] will be your first day of employment with us. Kindly indicate your understanding and acceptance of our offer by signing below and returning a copy in the enclosed envelope no later than [date]. This employment offer expires as of [date]. Should you have any questions, feel free to contact [name] at [number].
We look forward to meet you on [date].
Sincerely,
___________
I accept the offer of employment set forth above.
Signature: _____________________________________________
Date: _________________________
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