Offer in Hand is a three-part series collaboration with Real World Playbook. In this final article, they’ll provide insight on understanding your new job offer letter and what to look for in the fine print.
Reading Between The Lines: The Fine Print of Your Job Offer
So you’ve gotten the initial offer, hopefully tried to negotiate, and now’s the time to take a final look over the offer letter before signing on the bottom line. So close!
Before you skip over all the boring lingo and submit the signed agreement, remember that a job offer is a legal contract and you want to know what you’re getting yourself into. We’ve done the homework and highlighted eleven important clauses to check for in your offer letter. Let’s go through what they are, what they mean, and how they can have an impact down the line.
- Start Date – Pretty self-explanatory, but this is the day you’re expected to show up at your new gig! First day vibes aside, if you have to give your current employer “notice” (a specific window of time before you leave a job), are waiting for a bonus to be paid, or have a vacation planned, you will need to ensure that you are actually available to start work on this date.
- Job Description – Make sure that the job you’re signing up for is the one you wanted. Not only could there be a clerical error (it happens), but having your responsibilities outlined on paper can really put things into perspective. Ensure that the job you interviewed for, discussed with the team, and are excited about is actually the one you have in front of you.
- Base Salary – This number may have changed since your initial conversation or since your first letter came through because of your amazing negotiation skills! It also might be presented in the amount you’ll receive each pay period (usually every two weeks). Double check the math, and ask for clarification if things just aren’t adding up. Remember, if you’re an employee (not an independent contractor), this number will also differ from your take-home income thanks to taxes, social security, healthcare, retirement savings, and any other paycheck deductions.
- Bonus – In addition to your base salary, some roles come with various bonus payment opportunities. These may include performance bonuses, signing bonuses, relocation bonuses, etc…Your letter will outline your eligibility, but because bonuses typically depend on performance (think reaching sales goals) they may be represented as a percentage of your salary or another earning structure rather than as a dollar amount.
- Vacation Policy – Every job comes with some sort of vacation policy (some companies have unlimited vacation days while others provide a standard 10 days a year), but if you were able to negotiate more days or a different structure than what’s typical, make sure that this new allocation is written in your offer letter.
- Any Negotiated Benefits – Depending on your job, you may have asked for some specific benefits. Sales role that requires driving? You might want a corporate car or gas mileage compensation. Lots of emails and cyber security concerns? You may want a corporate-issue cell phone or phone bill reimbursement. Basically anything specific you’ve requested and been granted should be outlined.
- Employment Term – Most positions are “at will,” which means that you are not employed for a set period of time. It also means that your employer can fire you for any reason at any time (except for discriminatory reasons, of course), and you can leave at any time without needing a reason. Some roles like Financial Analyst positions or training programs are for a set duration (for example, two years), and this duration should be outlined in your offer letter as the employment term.
- Non-Compete – This is one contract term that doesn’t mean a whole lot now, but can have a big impact on your next job. If you leave the company, you are legally prohibited from joining a competitor’s company within a certain amount of time. This is established in order to prevent employees from taking the ideas of a previous employer and passing them off to their next employer. For example, if you work as a software engineer for a ride-sharing app, have signed a non-compete, and then leave that company, you may be required to wait two years before joining another ride-sharing app.
- Non-Solicitation – Like a non-compete, a non-solicitation only comes into play once you leave this company. Rather than intellectual property however, this clause prevents you from taking employees or your previous employer’s clients with you to your next company. Bottom line: you can leave to work on another business, but you cannot bring anyone with you.
- Invention Assignment Agreement – These are often separate agreements you will need to sign as part of your acceptance of your offer letter. Invention Assignment Agreements require new hires to disclose any inventions they have developed prior to joining the company. This creates clarity around the development of new ideas and who owns the intellectual property. Generally something you create while employed by the company remains the property of the company even after you leave. Invention Assignment Agreements protect the company by preventing employees from bringing inventions to competitors.
- Dispute Resolution – This clause outlines the procedure for resolving conflicts between the company and an employee or between two employees should they occur. Typically, companies require employees to go through a process called “arbitration”, which means that instead of going to court (which can be very expensive), conflicts will be settled by a neutral third party. These clauses essentially prevent you from suing an employer or colleague.
Now that you know what to keep a lookout for, it’s time to take out your fine tooth comb and go through the final letter. It’s never a bad idea to consult a legal professional who can explain the implications of any additional subtle terms. These letters are filled with jargon, and if anything seems unclear you can always ask your HR representative to clarify. Once you feel good and sure about this job, the terms around it, and how you’ll be protected in the future, take out your pen and sign on the bottom line. Congratulations, you’re employed!