Today, we have a guest post from Christine Frazer with HR Any Day. She’ll be presenting at our Eastern Oregon Nonprofit Conference in September in Ontario, Oregon. Register today to see her session “De-Mistifying Human Resources.”
“Joe is angry because he said he was told he’d be making $18.00 an hour. I told him we don’t start anyone at $18.00 an hour, and that we’ll pay him the starting rate we pay everyone, $17.00 an hour. Now Joe says he’s going to sue us. Help!”
“No problem,” I said. “Send over a copy of Joe’s offer letter. That should clear this all up.” Pause for painful silence on the other end of the phone.
“Are you still there?” I asked.
“Yes, I’m here. Um, well, um, well. There is no actual offer letter. But I know for sure what he was told.”
This conversation is all too common in my business. The details and names change, but the story is the same — a disagreement about the terms and conditions of employment and nothing in writing.
Here’s the deal. With no offer letter, the burden of proof is on you. Plain and simple. So, when there’s a disagreement, and you end up with a claim, you can guarantee most courts you’ll end up in will favor the employee first. Why? Because the system is designed to keep people employed. Not a bad system unless you’re an employer, getting taken advantage of, because they didn’t put their terms in writing.
There is one incredibly simple way to fix this. You guessed it. The tried and true offer letter. This fabulous document provides two primary benefits to help you sleep at night:
- Clear and concise understanding and future protection for the organization
- Clear and concise understanding and future protection for the employee
Now don’t just run out and grab the first offer letter you see on the internet, although, admittedly, there are some great ones out there. Be sure you have one that is compliant and meets your needs.
I realize I keep saying offer letter when in reality, I mean offer letters. You need two—one for exempt (salaried) employees and a second for non-exempt (hourly) employees.
Here’s what needs to be in these magic documents. I’m going to warn you, some of the items on the list may seem ridiculously obvious. They are. But every single one is on the list because they were missing on an actual offer letter I’ve audited at some point in my career. I can’t make this stuff up.
So, here are Christine’s top 10 items every offer letter should have:
- Name of employee – No joke! I’ve seen it. Or rather, not seen it, as the case may be.
- A date the offer letter is being written – This begins the timeline should you ever need to provide documentation of when the decision was made to make the offer.
- The effective date of hire – One of the most critical data points, makes sure everyone knows the day pay begins, which is often a point of dispute.
- The time they need to report to work on the first day – This might seem silly, but maybe you don’t want your new employee there at 8:00 a.m. on Monday if you haven’t had your first cup of coffee. Or, if you have varying work schedules, don’t assume they know which one they are starting on. Just make it crystal clear.
- The job they are being hired for – Yep, employees do actually say, yes, without really knowing the situation. Make their job title clear.
- Reporting structure – Often, a candidate is interviewed by many individuals, leading to confusion about their boss. Put it in writing.
- How much you will pay the employee. If non-exempt (hourly), compensation should be listed as an hourly rate. If exempt (salaried), salary should be listed as a weekly rate rather than an annual amount. A yearly rate can be problematic if the employee leaves before the end of the year.
- Employment requirements such as letting them know they will be completing an I-9, details on the background or drug testing if applicable, the dress code if that’s an important detail, etc. Eliminate surprises to make the first day more efficient and comfortable for both you and the employee.
- Benefits – This is optional but can be helpful.
- Date to return the offer letter – Don’t let an offer letter sit out there indefinitely. It must have an expiration date. Let’s play this one out. You send an offer letter with no specific deadline to return. You don’t hear back from the candidate for two weeks, despite trying to reach them with no answer. You’ve assumed they moved on and reach out to the second candidate and offer them the job. The second candidate accepts the job. Candidate number one comes back on week three with the signed offer letter. Now what? Time for 1-800-Call-A-Lawyer.
A few simple details in a well-worded offer letter will provide an enormous amount of support for both the organization and the employee. Implementing the practice of standardized offer letters for every employee is a great organizational safeguard whether you have 10,000 employees or just one.