I am preparing an offer letter for an exempt position who is working at 80%. Can you let me know if this language is OK?: “In this exempt position, you will be working at a reduced capacity of 80% and your compensation will be $XXX,000.00 annually, payable bi-weekly.”
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Thank you for your question relating to offer letters.
The language you provided doesn’t appear to be legally problematic, though there are a few other considerations you should keep in mind as you draft the offer letter.
Every employment relationship is a contractual relationship, regardless of whether the contract is reduced to writing. Employment contracts take many forms including the default contract of at-will employment recognized by most states, implied contracts created by offer letters or language in employee handbooks, collective bargaining agreements or union contracts, and individual written employment agreements.
The most important thing an employer can do to preserve the at-will nature of employment is to include an at-will disclaimer on its employment application, in every offer letter sent to a prospective employee, and in its employee handbook. State law regulates contract law. Therefore, it is important to consider the law in your state and what is required to preserve the at-will employment relationship.
Offer letters can be short and simple or more akin to a full-blown employment agreement. Simple offer letters may only summarize an employee’s job title, start date, and hourly rate of pay. However, a more complicated offer letter may set forth numerous terms of employment. We can offer a few tips for drafting the offer letter.
Every offer letter should contain certain provisions including the following:
- A statement that employment is at-will, meaning that either the employee or the employer may terminate the employment relationship at any time, for any reason, with or without notice;
- A statement that nothing in the offer letter is intended to or does create a contract of employment;
- A statement that the offer is contingent on successful completion of any background or reference checks, drug testing, if applicable, and proof of eligibility to work in the United States as required to complete the I-9; and
- If applicable, a statement that the employee will be required to sign a noncompetition, nonsolicitation, confidentiality, or proprietary rights agreement in a form acceptable to the company as a condition of employment (in many states, these agreements are only enforceable if they were made as a condition of employment at the commencement of employment).
It is always a good idea to have an offer letter reviewed by a local employment attorney to make sure it complies with all state laws and protects the employer’s interests.