The “job for life” has become a rarity. Consequently, many highly qualified people are expected to fight for secure positions with attractive salaries. There’s a lot of difference between offer letter vs employment contract
This has been highlighted in 2020, with the coronavirus pandemic hobbling hospitality and other service industries, shrinking the job market further. Once you receive the offer letter it means you have accepted the job.
Despite the difficult conditions, the struggle to find an excellent job continues. You distribute your resume, and cover letter, and undergo testing and possibly a series of interviews over weeks.
Finally, you get a call with the news; you got the job! An offer letter will be sent through shortly. Once you have accepted the offer, HR will often set to work drafting a contract.
So how do contracts and Offer Letters differ, and why is the distinction important for employees and employers? Read on as we explore the difference between an offer letter vs employment contract.
Show where you can get an Offer Letter sample, and see how PDF contract and job offer letter templates can be drafted, edited, and distributed in minutes using Lumin PDF editing software.
What is an Offer Letter? Defining Offer Letter Vs Employment Contract
An offer letter is a formal document that an employer sends to a prospective employee to provide details about a job offer. It usually outlines critical terms, such as job title, compensation, start date, work location, and other fundamental employment details.
However, unlike a contract, it is typically not as comprehensive and may serve as a preliminary step before the employee signs an employment contract.
Employment Contract
An employment contract is a legally binding agreement between an employer and employee, defining specific terms and conditions of employment in detail.
It includes job responsibilities, compensation, benefits, confidentiality clauses, termination policies, and other terms both parties agree upon.
This contract is enforceable in court, ensuring both parties fulfil their obligations.
Legal Implications and Enforceability of Offer Letter Vs Employment Contracts
Offer letters may contain disclaimers stating they are not binding contracts, but, in some cases, they can become enforceable if they create an implied promise of employment.
Employment contracts, however, are legally binding once signed.
Breach of an employment contract can lead to legal consequences, such as claims for compensation or damages. Both documents should be carefully drafted, reviewed, and signed to clarify and avoid disputes.
Best Practices for Drafting Offer Letter Vs Employment Contracts
Here are some of the best practices for drafting an offer letter and employment contract:
1. Clarity and Precision: Use clear language to ensure both parties understand the terms and obligations.
2. Outline Essential Details: Include job title, compensation, start date, location, and responsibilities.
3. Specify Offer Validity: Indicate if the offer expires, giving the candidate a clear timeframe for acceptance.
4. State Conditions of Employment: Outline any requirements for employment, such as background checks or drug screenings, in the offer letter.
5. Include Legal Disclaimers in Offer Letters: Clarify that the offer letter is not an employment contract to avoid misunderstandings.
6. Comprehensive Contract Terms: The employment contract should cover all legal aspects, including non-disclosure, non-compete, dispute resolution, and termination policies.
7. Seek Legal Review: Involve legal counsel to ensure compliance with both documents’ applicable labour laws and regulations.
What’s The Difference Between An Offer Letter And A Contract?
As mentioned above, the Offer Letter often comes as your prospective employer is first confirmed, signalling in writing the intention to hire. Details such as start date, base salary, direct report, and broad job description are often included.
Offer letters can vary in formality but are usually (depending on state laws and specific legal language used) not legally binding. Even if you have signed an offer letter, there is no iron-clad guarantee that the job will materialize.
In contrast, a contract has greater weight.
It contains some of the same information present in the offer letter. Still, it is more involved, using all the necessary legal jargon and outlining some of the worker’s rights and conditions that must be met to retain employment.
You may wonder why an offer letter is necessary if the contract outlines all the details. An offer letter is no guarantee that the relationship between potential employer and employee will progress.
The candidate can turn down the job, or negotiate on some initial terms, such as salary and duration of employment. The initially written terms provide the basis for negotiation, leading to contractual arrangements if both parties are satisfied.
Offer letters are also more friendly and welcoming than a dense contract, making the first official contact more relaxed.
It is evident that employees need to know what goes in an offer letter or contract as they (or their team) will be drafting them, but for candidates, it is also good to know the format of an offer letter.
For one, it allows prospective employees to distinguish professional companies from less trustworthy ones and know which information should be transparent about the job from the start.
Where Can You Get an Offer Letter Template or Contract Sample?
Rather than reinventing the wheel and writing one from scratch, it is easiest to find a contract or job offer letter sample that can be customized. Some people look for job offer templates or job acceptance letter samples to edit in Microsoft Word.
Still, there can be problems, namely that formatting can change or certain parts of logos, images, and tables can disappear when opened on the recipient’s device.
The use of PDFs is to ensure consistent formatting and giving a professional look.
While PDFs are mainly view-only documents, the decline of paper storage and the rise of computer literacy has made PDF editing software indispensable for many.
Lumin PDF is one of the leading companies that provides the necessary functionality to edit, manipulate, and collaborate with others using the PDF file type.
Lumin PDF allows users to edit text directly in PDFs, highlight and comment sections, add e-signatures, and compress, merge and split documents.
Integration with Google Drive, OneDrive, and Dropbox means documents go to cloud storage. This also makes them easy to share for collaboration, with real-time syncing and auto-saving.
Best of all, Lumin PDF has a contract and simple job offer letter samples on their website for free download.
Adapting an Offer Letter format with Lumin PDF
So you have your job Offer Letter format and the tools to customize it, the rest is easy. In minutes you can add images, and your company logo and personalize the text provided.
If you have stored the PDF letter in the cloud, you can share it with a colleague to check or make changes before sending it out.
While Lumin’s form section has no appointment letter templates for employees or sample letters for declining a job after accepting it, there is an easy solution – go to Google and search for a template!
If the sample is in PDF format, you can upload it to Lumin’s storage and easily edit it.
If the template is in Word format, this is not a problem either. With Lumin, you can convert Word documents to PDF and edit as you would normally.
What Does An Offer Letter Imply?
The offer letter highlights that you get a job offer from an organization after cracking their interviews. All your salary pay scales, leaves, and all the company norms will be mentioned there.
If you sign it, it implies that you are accepting the job you have been offered. It does not mean that you are doing a partnership with any company.
Document Handling with Confidence
In this article, we have learned the difference between an offer letter vs employment contract, what it means for employers and employees, and why the PDF file type is the best way to display these documents.
Using editing software such as Lumin PDF, you are not limited to a simple job offer letter format in Word.
Still, you can easily create, edit and distribute professional and reliable PDF documents to be viewed using any device or browser.
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