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Illustration for article titled What to Look for in an Offer Letter (Besides the Money)

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If you’re a recent college graduate or preparing to start your first salaried position, you might never have seen a job offer letter before, and it’s important to know what these documents mean. The letter is an offer of employment, yes—but the terms presented within aren’t necessarily set in stone, and can often be negotiated. Here’s what to look for in your offer letter.

What is an offer letter for a job?

An offer letter is a formal job offer that includes specific details about the job, including its start date, annual salary, and benefits. Offer letters are often written in ways that protect the employer, which can include language about at-will employment or noting that you can be terminated “for any reason.” You’ll want to read the offer letter carefully and decide whether you will accept the job as presented or negotiate for better terms.

For most employees, signing the offer letter is the last step in the application process, but you might also be asked to a sign an employment contract that covers confidentiality, compensation, job duties, and the termination policy in more detail. An offer letter should include the following information about the job:

Base Salary

If you’ve discussed salary during the interview process and it’s not reflected in the final offer letter, politely and firmly ask for clarification (mistakes can happen). You can also attempt to negotiate your initial salary offer. Negotiation can be awkward, however: Since the job offer can easily be rescinded, you don’t want to press your luck unnecessarily, but you also want to get a fair market value for your labor.

Check out these tips on negotiating your starting salary and decide whether it makes sense for you. And make sure to consider other benefits aside from your direct pay, like healthcare, flexibility, and paid vacation.

Dates and times

An offer letter should, at the very least, also give you a definitive start date and time. Again, this is negotiable, as you might need extra time to give notice with your current employer or relocate, or be facing prior commitments you otherwise can’t cancel. (You’ll also want to note other immovable dates within the first few months of your employment). It’s worth being reasonable here: Pushing off a start date by weeks without much explanation can send the wrong message about your seriousness to a prospective employer.

Job responsibilities

Before you sign a job offer letter, you’ll need to know what you’re actually signing up for. There shouldn’t be a lot of surprises about this, so be sure to follow up on any responsibilities indicated in the offer letter that weren’t discussed during the interview process.

Bonuses 

The offer letter should tell you whether a proposed bonus, if you have one, is guaranteed or discretionary. If it’s discretionary, you want to know exactly how it’s awarded: is the bonus based on personal or team performance? Are the bonus benchmarks clear and achievable? You want to get a sense of how often employees in similar roles achieve their bonuses.

Benefits

Companies might offer universal benefits such as a 401(k), insurance coverage, flexible spending accounts, educational credits, and work from home options. If you’ve worked out any additional benefits as part of your negotiations (a subsidized phone bill, extra time off, etc.) make sure they’re noted in the offer letter. You want a written record, in case they’re forgotten later.

Non-Disclosure Agreements 

Non-disclosure agreements, or NDAs, are common in offer letters. Basically it’s a promise not to discuss sensitive company information, particularly that which could be used by competitors. These are harder to negotiate, because doing so will likely require approval by your employer’s lawyers. However, the employee-advocacy group Workplace Fairness suggests that you be cautious of any overly broad NDA that “seems to be less about protecting confidential company information and more about forcing employees to be silent about everything regarding the company.” For more on NDAs, check out their blog post on the subject.

Non-Compete Clause

Per The Balance, a non-compete agreement typically states that the employee may not work for a competing firm for six months to two years following the end of their employment. Like an NDA, this clause is meant to protect trade secrets and strategic plans from being easily shared with competitors. If a company is asking for anything beyond the standard NDA of six months to two years, doesn’t specify a timeline at all, or has other stipulations that seem unnecessarily punitive, consider seeking legal advice before signing.

  



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