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Once you’ve put in the time and resources to interview the perfect candidate, you may be ready to send a job offer! That’s great, but it’s not time to pop corks just yet. A true job offer isn’t valid until you send and receive a signed agreement letter.
An agreement letter details the terms of employment between a company and a new employee. A basic agreement letter will include the job title and function, duties associated with the job, salary, bonus information, job location, and to whom the employee will be reporting.
Depending on the new role, this message can also include a provision for severance payments in the event the employer terminates the employment without cause or good reason.
How to Write an Agreement Letter
Agreement letters can vary in content and length depending on which type of position is being offered. It’s important that the agreement letter details clear employment specifics, and omits any vague language. Read the tips below and check out the agreement letter samples for reference.
Be extremely detailed: Remember, this is a legal, binding agreement. If crucial details are omitted, there can be legal consequences in the future. It’s a good idea to include dates, financial details, pertinent job functions and expectations, and penalties or consequences for not achieving these expectations.
Use appropriate language: Like a formal business letter, an agreement letter should use proper grammar and avoid slang. You’re probably excited (as you should be), but a job prospect is no excuse to slack on your writing skills.
Be as succinct as possible: Your reader has lots of work to do too. If you write too much, finer points may slip through the cracks. Read your agreement letter out loud, and eliminate any superfluous words and phrases.
Double check with a lawyer: Writing a straightforward, legally binding agreement is an important job. The legal requirements vary from state to state. It’s always a good idea to have any legal document reviewed by an attorney prior to being mailed.
How to Format an Agreement Letter
Agreement letters are formatted based upon the company’s style guidelines. The letter is typically printed on company letterhead and will include a space for both the employer and employee’s signature. The format details are below, but it would be wise to compare your final draft with the agreement letter samples.
An Agreement Letter should include the following details:
á Date the offer is being made
á Name of position (Title)
á Start date of employee (date agreement takes effect)
á Compensation plan including base salary, and any commissions
á How salary and commissions are paid
á Benefits including eligibility date
á Retirement program details
It’s also common to add noncompeting clauses, arbitration details, and severance information for certain job descriptions.
Common Agreement Letter Mistakes
á Overpromising: If you write an Agreement Letter that promises K-Cups every day for the employees’ tenure Ñ you better be willing to provide it. The little details can come back to haunt employers.
á State of the State: This letter is a legal-binding document and can be held as evidence in court. Make certain you are writing the letter based on your state’s employment laws, as they vary.
á Lawyer Jargon: Use words that any reasonable person can understand. While it’s encouraged to have this letter reviewed by a legal team prior to sending, it’s imperative that the employee understands what he or she is reading and signing.
You’ve Written Your Agreement Letter. Now What?
A well-written agreement letter includes the answers to any questions the employee might have, and leaves out any vague ideas that can lead to misunderstandings. The agreement letter is used to protect both the employer and employee, and starts the relationship off with clear expectations. To learn more, view the agreement letter samples.