Global HR Glossary

What is an Offer Letter? 

An offer letter is a formal communication issued by an employer to a prospective employee that outlines the terms of employment. This document serves as the foundation for the employment relationship, detailing the role, salary, benefits, and terms of employment, including start date and work conditions.

Function and Legal Implications of Offer Letters

• Clarifies Employment Terms: An offer letter provides all essential job details, helping to ensure mutual understanding and agreement between the employer and the candidate.

• Initiates Employment: The offer letter typically requires a signature from the candidate, signifying their acceptance of the job offer and terms.

• Legal Document: While primarily informative, the offer letter can have contractual implications if not properly drafted, potentially binding the employer to certain commitments.

Offer letters should be clear, concise, and include necessary legal disclaimers or conditions such as employment being contingent upon background checks or other pre-employment screenings. They are a critical tool in establishing clear communication and setting the stage for a successful employment relationship.