Offer letters are the legal basis for employment. Offer letters are essential to all positions of the candidate, and it is critical to include all the correct information in them. An offer letter gives a candidate validation of their employment.
It clarifies items discussed during an interview and helps a candidate sort their doubts before signing the letter. Providing authentic information in an offer letter is highly important.
It should be transparent and must include all the necessary information such as the company’s policies, job title of the employee, compensation and benefits associated with the job, important dates (e.g., joining date, expiry date of the offer letter, etc.).
Terms & Conditions in Offer Letter
Job offer letters can be time-consuming to draft. They can even feel incomplete if not written well. Here are the following terms and conditions every job offer letter should contain:
Position of the Role
The job offer letter must describe the position for which the candidate is selected. It should mention the official title of the employee and their supervisor. It is also necessary to specify whether the title is full-time or part-time and whether the position is exempt or non-exempt.
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For non-exempt employees, it is required to give a brief description of overtime pay policies. It is also essential to describe the job roles and responsibilities and working hours.
It should also be stated that the duties and roles and responsibilities are subject to change. Finally, it is also important to mention whether the job is remote or work from the office.
Duties and code of conduct
Duties and code of conduct are an integral part of the offer letter. The duties and roles associated with the position must be emphasized. It should be stated that these duties are also subject to change.
A code of conduct is a set of rules that describes the expectation regarding an employee’s behavior. It conducts a variety of topics like harassment, discrimination, dress code, etc.
Working hours
Apart from mentioning whether the work is full-time or part-time, it is also essential to note the schedule for the working hours and the number of working days in a week. Information related to overtime should also be clearly stated in the offer letter.
Date of joining
The job offer letter should clearly state the joining date and time of an employee and the office location where the employee would be reporting on their first day.
Often, the start day may not be the beginning of the month, so it helps calculate the compensation at the end of the month.
Reporting structure
Reporting structure refers to the reporting relationships in a company. It is a basic orientation in an offer letter. It is essential to mention the name and designation of the person to whom the new employee must report.
Compensation
Compensation is an integral part of the job offer letter, and it must include the rate of pay and other benefits. Salaries should be stated hourly for non-exempt employees and pay-per-period for exempt employees. It should consist of pay per period, paid time off, health insurance, and holidays. It is essential to mention that the compensation is subject to change as per its decision.
Appraisal
An appraisal is an employee’s achievement, which is evaluated based on the employee’s performance and contributions during a specific period. The appraisal scheme encourages candidates in their career growth.
It must contain information on the implementation of appraisal, which motivates the employee to deliver better performance.
Confidentiality and Non-Compete Clause
The Confidentiality and Non-Compete clause is that section of an offer letter that prohibits an employee from misusing confidential information of the current and previous employment.
A candidate must also inform the present employer regarding any non-competition or non-solicitation agreements they’ve signed with former employers.
Transferability
Transferability is the section that describes what an employee is liable for from one branch to another based on their performance.
Provident fund and Gratuity Plan
A Provident and gratuity plan is also crucial for the offer letter. The gratuity amount paid entirely by the employer to the employee at the time of resignation, retirement, death, disability, or termination must be mentioned.
Unlike gratuity, the Provident Fund (PF) amount, which is a contribution of the salary towards the pension funds every month, should also be clearly stated.
Notice and Termination
The conditions for termination must be mentioned. The offer letter should discuss termination of appointment by notice. The offer letter should include the period of information that the employer is bound to give the candidate before terminating them.
This period varies from weeks to months differing from one company to another. All the conditions of termination are also mentioned in this section. In retirement cases, the date of retirement and the age of retirement should also be mentioned.
Leave Policy
Leave Policy should be mentioned clearly as it describes the leaves an employee is eligible to take during his course of employment. The calendar year or the financial year should include leaves such as the number of leaves allowed, paid and unpaid leaves, and gazetted and optional leaves. These also include casual, sick, and emergency leaves.
Dual Employment
The dual employment clause should be clearly stated in the offer letter. It should be clearly stated that the company does not allow its employees for two jobs simultaneously.
It should be mentioned that If any employee violates this law, then they are liable for prosecution, which might incur termination.
Contingencies
Personal data in any offer letter accounts for the employee’s permanent and correspondence address and employee background, including parent’s name, contact details, etc. Gathering personal data is essential for emergencies.
Employment Verification
Employee verification is also an introductory section in the offer letter as it confirms an employee’s work history. It is essential to section as it helps to know if the employee possesses the necessary skills to perform the intended role.
It can also reveal false employment claims. So various employee information such as candidate’s job ID, salary slips, experience letter, relieving letter, etc., from the previous company, helps in employee verification.
Therefore, an offer letter should demand all the required documents for verification purposes.
Document Submission
The offer letter addresses a section on document submissions, including educational degrees, address proof, etc. These documents undergo background and reference checks. It helps verify the credentials of an employee.
Frequently Asked Questions(FAQ)
An offer letter is a formal document sent to a candidate offering them a job at a company. It includes basic information about the position – start date, title, salary, onboarding information – and offers written confirmation that an employer is selecting the candidate.
The terms and conditions of employment are the elements of a contract defining the employment relationship between employer and employee.
The offer letter lays down the terms of employment, agreed upon by the employer and employee. Whether stated explicitly in the agreement or not, both the employee and the employer have the duty of mutual confidence and trust, and to make only lawful and reasonable demands on each other.
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