Don't get me wrong, no one should find out about an offer in an offer letter - it should have already been discussed it in detail. But the letter does make it official - like a referee with a whistle. Candidates like that. And you like that. Folks (sometimes you) forget or misunderstand what was agreed on. Not only can you use the letter to welcome your newest hire but it also ensures you are on the same page with all the details, and it prevent arguments in the future.
Here's what to include:
- Expected start date
- Supervisor's name
- Job title - list exempt/non-exempt and FT/PT status
- Primary job tasks - make sure to say these may change, expand or evolve over time)
- Earnings (I think listing annual salary is fine, but some argue to only list earnings per pay period in - order to avoid any arguments the letter represents a contract). Stick an At-Will statement in their to cover all your bases. And definitely don't say any incentive payments are guaranteed.
- Equity - include just the basics here, like # of options, strike price and vesting period
- Benefits - Holiday, vacation, personal, FSA, 401(k), etc...
- Expiration date - give a date they need to get back to you with a decision -typically this is a week, but listen to their needs and make your own call. Give time for, and encourage, discussion with family and friends.
- Non-compete - add a phrase that by signing they are indicating they are not part of any non-compete or similar agreement that would preclude them from taking this job.
- Contingencies: State that offer is contingent upon completion of an I-9 form as well as any other background checks, screens, or confidentiality agreements that you require employees to complete.
Did I miss anything? Do you have any offer letter success or failure stories?