Tips and Templates for Employment Contracts & Offer Letters

The process of welcoming a new team member officially starts with the signing of an employee contract or offer letter. For businesses, the excitement of finding the right person can be tempered with anxiety about creating a document that protects everyone’s best interests.

Offer letters and employment contracts can be intimidating–but they don’t have to be. 

The fastest way to get an offer letter or employment contract to your new hire is to use a template in your e-signature solution. But you can draft a simple onboarding document that covers the basics and doesn’t require a million-dollar legal team to decipher.  

Let’s walk through some of the best practices to use when you’re drafting offer letters and employment contracts. These guidelines are not intended to be legal advice; they’re just to get you started.

Best practices when writing an offer letter or employee contract

It’s a good idea to step back at this point and remember that contracts exist not only to clarify the exact terms of an agreement, but also to guide the resolution of a dispute if one party believes the agreement was not honored. 

In the same way, it is important to remember that attention to detail is important in an offer letter and a contract. People don’t normally enter into agreements anticipating litigation, but it’s always a good idea to make sure your documentation is well defined and free from errors.

Tip #1: Check your local requirements for offer letters

Some states in the USA have specific requirements for what must be included in an offer letter. Be sure to search to see if your state has any requirements and abide by them to keep your business in compliance with local laws.

Tip #2: Be precise 

Perhaps the most common mistake in drafting any sort of agreement is a lack of precision. This can be anything from vague language to leaving sections out entirely. If the terms of the contract are not explicit, and can be reasonably seen as having multiple interpretations, there is a risk that the contract will have to be honored even if the work was not done satisfactorily.

It’s not expected that every duty will be described in detail, but the contract should specify that the work will be done for the company and who will assign the work. 

Tip #3: Avoid confusion between an offer letter and a contract

With an offer letter, the main danger is if the text of the letter reads as a contract–or does not specify that it is not one. If an employee argues that the offer letter made promises that were not delivered on, the employer may be exposed to legal and financial risk if the offer letter does not clearly specify that the document is not a contract. 

Clarify that the offer letter is not a contract, that the employee is agreeing to at-will employment and avoid any language that could be considered a guarantee. 

Tip #4: Give yourself time to do it right

The time required to draft an offer letter or employment contract is not insignificant. This process can take hours or even days. If not done prior to a verbal offer, the drafting process risks being rushed and therefore risks being sloppy. Additionally, if it takes too long to draft, your intended new hire may lose interest or find work elsewhere while they’re waiting for their official paperwork. 

When you make sure to give yourself the time you will need, you will have a much better document.

The must-haves 

Use these checklists to ensure your document is on the right track.  

11 must-have sections for an offer letter

  1. Employee’s name
  2. Job title and responsibilities
  3. Compensation package, including insurance, bonuses and other benefits
  4. Details on employee sick and paid time off
  5. Whether the position is full or part time
  6. Working hours
  7. Exclusivity
  8. Non-disclosure 
  9. Work for hire/intellectual property ownership 
  10. Dispute resolution procedure 
  11. Termination protocol 

7 must-have sections for an employment contract

  1. Employee’s name
  2. Job title and responsibilities
  3. Term of employment
  4. Working hours
  5. Non-disclosure 
  6. Non-competition
  7. Work for hire/intellectual property ownership 
  8. Dispute resolution procedure 
  9. Terms and form of notice

Benefits of digital template-based offer letters and contracts

If you are ready to make a written offer but don’t have the proper document prepared, a template from your e-signature solution can make the process quick and painless.  You can automatically populate data into the template, and rest assured that the boilerplate text passes legal muster. 

Explore Docusign templates with a free trial

A Docusign template makes it easy to send your document for eSignature, automates the process of distributing final copies of the document and stores the document digitally with Docusign’s full suite of digital and physical security. 

You can explore our templates and learn more with a Docusign free trial.