Imagine you have just heard the fantastic news, "Congratulations! We'd like you to join our company." You start jumping up and down and screaming for joy. At this point, the employer is likely to want you to commit as quickly as possible, sign an offer letter, and put the search to rest. And there is a natural inclination on your part, especially if you have been "between jobs" for an extended period, to gratefully and gladly accept whatever is offered. Restrain yourself.
If you regard an employment offer letter as being non-negotiable and sign it without careful review and clarification, you may set yourself up for trouble down the road.
Typically, an offer letter will include the basic terms of your employment, including: the position title, start date, compensation, vacation time or paid time off (PTO), and other benefits such as retirement plan, 401(K) plan or IRA. Additionally, any disability or death benefits including group life insurance and medical benefits will be covered, including how much the employer will contribute to health insurance.
This may seem simple and straightforward, without much to discuss. But Todd Bennett, a partner at the Cambridge, Mass., law firm Bennett & Belfort, P.C., cautions: "The devil is in the details." Well experienced in litigating issues of business and employment law, Bennett offers advice about five things you should consider before signing any employment offer:
1. Understand what Is negotiable. Depending on the company and your particular situation, your start date, compensation, vacation or paid time off may be negotiable. If you're working in a big city, you may be able to obtain free or subsidized parking worth $15 to $50 per day.
2. Make certain that everything is spelled out clearly. If you have been promised something verbally pertaining to your employment, make certain that it is included in your offer letter. Bennett cites the example where an employee is verbally promised three or four weeks of annual vacation as an enticement, when the standard laid out in the employee manual is two weeks. "It's almost like, if it isn't in the offer letter, it didn't happen," he says. "Then the employer will have a very good argument that the matter is handled in the employee manual." The result is that what you believe you have been promised may not materialize.
3. Make certain you have all the relevant information. Bennett counsels that you should review all documents, such as an employee manual, benefits programs, etc., that are incorporated into or referred to in an offer letter before signing. "It would be a red flag for me if an employer referenced policies or documents but wouldn't share them with the employee before the offer letter is signed," he says.
4. Pay particular attention to variable compensation. Especially if you are in sales, or are considered a key employee, at least a part of your annual compensation may derive from non-salary sources such as commissions, bonuses, stock or profit sharing. It is important to flesh all that out clearly so that there is an unambiguous understanding of how any of these items are calculated, when they are due, and what event or events trigger them. Bennett cautions that unless all this is spelled out in the offer letter, it can lead to misunderstanding, or even a company denying parts of the deal. The great feelings that you have at the beginning of your relationship can all to easily dissolve into dispute when expectations are not met.
5. It is often worthwhile to consult an attorney before accepting an offer. Employment law differs considerably from state to state. What may be perfectly legal and commonplace in one locale may be illegal in another, as some states favor employers and others favor employee rights. Hiring a local attorney to review an offer letter requires relatively little legal time, and may have significant benefits.
An attorney can be especially helpful in evaluating restrictive non-compete or non-solicitation elements of an employment offer that, in many states, can be enforceable and restrict your behavior and income after you leave the job you have yet to begin. He or she can then provide background advice as to how to discuss narrowing these terms to your benefit..
You should be on the lookout for warning signs of a potentially troubled relationship that can appear in an offer letter. If an employer wants to hire you without any written offer, or provides one that is poorly drafted, beware of what this might signify about the way the company does business or treats its employees.
In the end, the final employment offer that you sign should fairly and accurately set forth the meeting of minds that you have achieved with your new employer. When you begin a relationship with that kind of crystal clear communication, you are off to a great start.
Arnie Fertig is the head coach of JOBHUNTERCOACH.COM, where he utilizes his extensive background in HR Staffing and as owner of a recruiting company to help mid-career job-hunters land their next job. Arnie provides one-to-one coaching services to individuals throughout the U.S. in all aspects of the job hunt, including: resume writing, personal branding, utilizing social media, enhancing networking skills, preparing for interviews, and negotiating compensation.