I often hear “we’ll just send the candidate an employment agreement and tax forms to get them started”.  Sounds reasonable, right?  However, aside from the fact that there are several other documents required for onboarding a new team member; you might want to stop and think long and hard before offering an employment agreement.

Both an offer letter and employment agreement outline the basic terms of employment – hire date, pay rate, title, job duties etc.  But, an offer letter will also have an ‘at’-will’ statement that governs when and how someone can be let go (basically, at any time, for any or no reason).  I know – this makes you wonder what all the HR hub bub is about, around ‘you must document disciplinary actions’.  Well, just because the at will  guideline says for ‘any or no reason’, you can still get dinged if you terminate (or it is determined that you terminated) for an unlawful reason such as discrimination or harassment.  That’s why we want you to have your ducks in a row on all terminations.

In contrast to an offer letter’s at will statement; an employment agreement generally spells out specific reasons for termination.  Makes sense – employment agreements are mostly reserved for the top members of the organization – the ones you want to ensure will stay aboard for a specific period of time, and not just give notice one day.  At the same time, you will want to maintain the flexibility of ‘at will’ with most of your employees.

Any employment agreement should be drafted by your labor counsel – do not, I repeat, do not try to draft one yourself!  It is a legal contract, and unless you graduated law school with flying colors, it isn’t something we recommend you try to tackle yourself.  On the other hand, an offer letter contains fairly standard elements, and can be edited and reused for all new hires.