Offer Letters and Employment Agreements
The “offer letter” is a crucial document that needs careful attention. When thought
through and well-crafted, an offer letter can communicate important information and make
the prospective employee feel good about joining the company, while still protecting the
employer. Assume that whatever is offered to an employee upon joining the company, an
employee will demand upon leaving the company.
Here are some tips to handle the more important issues in an offer letter.
The offer letter should state that employment is not for a definite duration, and is
terminable by either the employer or the employee at any time, with or without notice, and
for any reason. See Part I, Section 1.6(A) above.
Expression of Compensation
To avoid the inference that the employer guarantees employment for at least one year,
the offer letter should not reference a prospective employee’s annual salary. Rather, the
reference to compensation should reflect the amount of compensation based on the
employer’s payroll schedule (e.g., weekly or bi-weekly). Massachusetts law generally
requires that employees be paid no less often than bi-weekly or, in the case of bona fide
executive, administrative or professional salaried employees, semi-monthly.
If a prospective employee will be eligible for a bonus, the offer letter should clearly
state the amount and date of payment of the bonus. If the bonus is discretionary, the offer
letter should state that in no uncertain terms. In addition, if the bonus is contingent upon