Decoding your job offer letter
You ran the interview gauntlet, cleared reference checks and – finally! – you’ve received a verbal offer of employment. Congrats! Now, you’ll want to be sure you receive a written offer confirming the details. A solid offer letter will contain lots of information, and it’s important for you to read and understand it before signing and returning it.
Here’s a guide on what to expect and understand when you receive a job offer:
1. Position/title, department, and reporting to whom
Take note of the job title and department to understand your role within the organization. The letter should indicate reporting structure either by job title or your supervisor’s name.
2. Work Schedule and location
Is the job full-time or part-time, how many hours per week, how many days in the office vs remote, where’s the office, and what are the office hours/work schedule expectations.
3. Exempt/Nonexempt classification
The letter should include the job’s classification as exempt or nonexempt, as this impacts overtime requirements and payment. (Nonexempt means you must be paid overtime; exempt means you don’t.) In some states, you may also receive a separate notice with this information.
The letter should include a high-level overview of your responsibilities, with an understanding that these may evolve over time. There may even be a job description attached to the letter.
5. Base salary and pay schedule
This should be stated as either an hourly rate if non-exempt, or a rate per pay period that equates to an annual amount. Double check the math here.
There may also be language around overtime: Does it require approval? Is it limited?
6. Additional compensation and/or equity
Take note of details regarding bonuses or commissions, and check if there’s reference to formal plans. If these were discussed but not referenced in the letter, ask for clarification. Some beonus plans are informal and discretionary, but others are written.
If applicable, there should be mention of any equity grants, noting that they are subject to specific terms and conditions.
7. Benefits, paid time off/holidays, other perks
There should be reference to benefit eligibility and when they start. This includes health & welfare benefits (and employee costs/contributions), and retirement savings plans (entry dates, employer contributions, etc.).
Your leave accruals should also be specified – check the math on these. Ideally, a more detailed summary of benefits will be included. If not, this is a great time to ask.
Additional perks, such as parking/commuter subsidies, other allowances, etc. should also be confirmed in the letter.
Benefits often have a material impact on the total compensation of an offer. Don’t be afraid to ask questions.
Your employment will be subject to company policies, procedures, and handbooks, if applicable. This may be noted in the letter. If so, be sure you receive and have time to actually read the handbook before you sign off.
9. At-Will Employment
Your letter will include language that may seem scary around rights to terminate the employment relationship at any time. This is called at-will employment, and it’s the prevailing employment law in most states, and this is standard language. (Look for it in the employee handbook, too.)
10. Confidentiality/NDA or other employment agreements
If you will be asked to sign confidentiality or invention assignment agreements as part of the employment conditions, those should be referenced in the letter.
Your offer may be contingent upon background checks, drug tests or medical exams, and/or proof of the right to work in the U.S. Any contingencies must be spelled out.
There may also be language around a “probationary period.” This isn’t a legal definition, and at-will employment supersedes it. Think of it as an initial trial period where you and the employer are getting to know each other.
12. A signature block and a deadline to respond
Offer letters usually include a date by which you must respond. It’s a good idea to sleep on an offer, and good etiquette to stay in touch during your consideration period if you decide to wait. Employers should give a reasonable period of time for you to respond; be wary of offers that require response within one day.
Understanding these key elements ensures you make an informed decision about your next career move.