The offer letter is the first document a new hire signs, and it is often the one they reread when something goes wrong. A clear letter gets a fast yes and sets expectations. A sloppy one can promise things you never meant to promise: guaranteed employment for a year, a bonus that was really discretionary, or a start date that ignores a background check you have not run yet.
This guide walks through what a US offer letter should cover, how to word at-will language, how to make an offer contingent, and the mistakes that turn a friendly welcome note into evidence in a dispute.
Offer letter vs employment contract
Most US employers use an offer letter, not a formal employment contract. The difference matters. An employment contract usually sets a fixed term or limits when you can end the relationship. An offer letter, written carefully, confirms the basic terms of the job while making clear that employment is at will and that the letter is not a guarantee of employment for any period.
Executive hires, roles with severance or equity acceleration, and employees covered by a union agreement often need more than an offer letter. For a typical hourly or salaried role at a small business, a well-drafted offer letter plus your handbook and any separate agreements (confidentiality, invention assignment, arbitration if you use it) is the norm.
What to include in an offer letter
Keep it to one or two pages. Every item below should match what the candidate was told during interviews and what your payroll system will actually do.
- Job title and manager. Name the role and who the person reports to.
- Start date and work location. Include whether the role is on-site, hybrid or remote, and the state the employee will work from. Work location drives which state and local laws apply.
- Full-time or part-time status, and FLSA classification. State whether the role is exempt (salaried, not eligible for overtime) or non-exempt (eligible for overtime). Getting this wrong at the offer stage is common and expensive.
- Compensation. Give the base pay as an hourly rate or an annual salary, and the pay frequency. If there is a bonus or commission, describe whether it is discretionary or formula-based and point to the governing plan.
- Benefits summary. A short description (health insurance eligibility, retirement plan, PTO) with a note that benefits are governed by plan documents and may change.
- Equity, if any. Number of options or units, and a statement that the grant is subject to board approval and the equity plan.
- At-will statement. See the next section.
- Contingencies. Background check, references, proof of work authorization and anything else the offer depends on.
- Other agreements. Reference any confidentiality or invention assignment agreement the employee must sign.
- Acceptance deadline and signature lines. A clear date the offer expires and space for the candidate to sign.
Writing at-will language that holds up
In every state except Montana, private employment is presumed to be at will: either side can end it at any time for any lawful reason. Montana has a wrongful discharge statute that generally requires good cause after a probationary period, so Montana offers need different wording.
A typical at-will clause reads something like: "Your employment with the Company is at will. This means either you or the Company may end the employment relationship at any time, with or without cause or notice. Nothing in this letter or in any Company policy creates a contract of employment for any specific duration. Only the CEO, in a signed writing, may change your at-will status."
The clause only works if the rest of the letter does not contradict it. Watch for phrases like these:
- "We look forward to a long career together" is harmless; "your position is secure" is not.
- Stating pay as an annual salary is fine, but avoid "you will earn $90,000 per year" if it could be read as a promise of a full year of employment. "Your annualized base salary will be $90,000, paid biweekly" is safer.
- Avoid "permanent employee." Use "regular full-time" instead.
- Describe any introductory or probationary period carefully. It should not imply that employees who pass it can only be fired for cause.
Making the offer contingent
A contingent offer lets you extend the offer before every check is complete. Spell out each contingency and say the offer may be withdrawn if it is not satisfied.
| Contingency | What to know |
|---|---|
| Background check | If you use a consumer reporting agency, the federal Fair Credit Reporting Act requires a standalone disclosure, written authorization and a pre-adverse and adverse action process. Many states and cities have "ban the box" or fair chance laws that control when you may ask about criminal history and how you evaluate it. |
| Work authorization | Every new hire completes Form I-9. Do not ask for specific documents in the offer letter; just say employment depends on completing the I-9 within the required timeframe. |
| Drug test | Rules vary a lot by state, especially for cannabis. Some states restrict pre-employment testing for cannabis in many roles. |
| Medical exam | Under the ADA, a medical exam is allowed only after a conditional offer, must be required of everyone in the same job category and results must be kept confidential. |
| References and credentials | License verification, degree confirmation and reference checks are common contingencies for regulated or senior roles. |
| Signed agreements | Confidentiality and invention assignment agreements. Several states restrict non-compete agreements, and some ban them for most employees. |
Because background check, salary history, non-compete and drug testing rules differ so much by state and city, check the state HR law guides for the state where the employee will actually work.
Things to leave out
- Anything you did not discuss. The offer letter should not be the first time a candidate learns about a key condition.
- Salary history references. Many states and cities ban asking about or relying on prior pay.
- Protected characteristics. No references to age, family plans, health, national origin or similar.
- Vague promises about raises or promotion. "Eligible for a performance review after six months" is fine. "You will be promoted to senior within a year" is a promise.
- Policies that change often. Point to the handbook rather than copying in PTO rules, which then become harder to update.
Offer letter checklist
- Title, manager, start date and work location are correct.
- Exempt or non-exempt status has been checked against the duties and salary tests.
- Pay is stated as hourly or annualized, with pay frequency.
- Bonus and commission language says whether it is discretionary and points to the plan.
- Benefits are summarized with a "governed by plan documents" note.
- At-will clause is included (or adapted for Montana) and nothing else in the letter contradicts it.
- Each contingency is listed, with a statement that the offer may be withdrawn.
- Background check process follows FCRA and applicable state or local fair chance rules.
- Required agreements are attached or referenced.
- Acceptance deadline and signature lines are included.
- A copy of the signed letter goes into the personnel file.
Sending and tracking the offer
Call the candidate first, then send the letter by email or e-signature the same day. Give a reasonable deadline, often a few business days. If terms change during negotiation, issue a revised letter rather than editing by email, so there is one clean final version. When the candidate signs, the letter should flow straight into your onboarding steps: I-9, tax forms, policy acknowledgments and equipment.
Key takeaways
- An offer letter confirms terms; it should not read like a guaranteed contract.
- Include a clear at-will clause and remove any language that contradicts it.
- List every contingency and follow FCRA and local fair chance rules for background checks.
- Confirm exempt or non-exempt status before the letter goes out.
- Check state rules on salary history, non-competes and drug testing for the work location.
Draft your next offer faster
If you want a starting point, AskHrAI's HR document generator can draft an offer letter tailored to the role and state, and you can ask follow-up questions in the AI HR chat before you send it.
This article is general information, not legal advice. Employment laws change and vary by state and city — confirm details with your state labor department or an employment attorney.