An Employee Offer Letter is the form that your startup should use to solicit someone’s at-will employment. “At-will” means that the person in question can be terminated (subject to applicable federal and state laws of course) without notice. The Employee Offer Letter is best suited for the hiring of your startup’s rank and file workers. Key executives are normally subject to more-detailed and comprehensive employment agreements. There is not a formal “offer letter” that applies to consultants, however your startup should have each of its consultants sign a copy of the Consulting Agreement before their service to it begins.
Here is some of the information contained in an Employee Offer Letter:
- Individual’s prospective title;
- Specific date at which employment will begin;
- Individual’s base salary;
- Description of any equity compensation to be awarded (usually stock options or Restricted Stock Awards);
- General description of employee benefits such as health insurance and paid leave and/or vacation;
- Notice of at-will employment – this allows the employee to be terminated at any time, for any reason (does not include protected classes such as gender, race, and religion for which an individual cannot legally be released);
- Covenant that while employed by your startup, the individual will not engage in any activity that competes with or is detrimental to your startup’s business (includes both current and future business), or undertake any other activity that would conflict with his or her employment obligations.