The purpose of an employment letter depends on whether you're receiving it or giving it. A business owner who sends an employment letter to the candidate she feels is best suited for the job is ensuring that she has a commitment from the person she thinks is best suited for the job. It means she has completed the selection process and is now ready to move forward with onboarding the new employee. If you're a job seeker who receives an offer letter, it means that once you agree to the terms and conditions of your new job, you can probably feel comfortable tendering resignation to your current employer.
Employment Letter Versus Offer Letter
The terms employment letter and offer letter often may be interchangeable; however, there could be distinct differences between the two, depending on the purpose and contents of each letter. An employment letter may be an employment contract, meaning that it describes the terms and conditions of a position that is not at-will.
At-will employment applies to most jobs, meaning the employer or the employee can sever the relationship with or without notice or reason. Many employers even state the conditions of at-will employment on their applications, and as long as the company doesn't terminate an employee for discriminatory reasons, they are well within their rights to end the employer-employee relationship at any time, or at will.
An employment letter that functions as an employment contract might express a finite period of employment, say five years. Or it could be indefinite until the parties agree the relationship will end. Also, a contract might contain information about bonuses throughout the employer-employee relationship, or a severance amount payable when the relationship ends. Many executive-level employment contracts also include "moral turpitude" clauses which require the employee to adhere to a higher standard. This would apply to things such as avoiding participation in activities that could embarrass the company or put the employee or the company in a compromising position.
An offer letter, on the other hand, could be a routine document that the company sends to a new employee who is not under contract. A routine offer letter contains the position, department, start date, reporting relationship and job duties, salary and description of benefits. Many employers provide an offer of employment that is contingent upon the candidate passing a background check, and that would be stated in the offer letter. A written offer of employment might include language about the at-will nature of employment, and expressly state that the employment relationship can end at any time, without reason or notice, by either the employer or employee. If the candidate agrees to the terms and conditions of employment, the offer of employment can reassure the candidate that she has a new job. It's wise to wait until you receive a written offer and that you accept the offer in writing before you quit your current job.
Employment Letter as Salary Verification Letter
A written offer letter or employment contract also is useful if you need a salary verification letter or document that verifies you are employed. For example, if you're moving to a new city and require proof of employment and salary, your offer letter can be used to prove to a potential landlord that you, indeed, have a job and sufficient earnings to enter a rental agreement or buy a home.
Sometimes a job offer doesn't go as planned. With an employment letter for an at-will job, you may have little recourse if an employer reneges on a job offer. For example, maybe you didn't pass the background check. If that's the case, talk to the company HR manager or director and ask if there's any way you can save your new job by providing information that refutes what a background investigation revealed. But if the company ultimately decides that they don't want you to join the company, the best course of action might be to look for another job.
If you have a contract of employment, check with your lawyer about a course of action. If you discover that the employment contract was retracted, your lawyer may be able to reach an agreement with the employer for compensation if the company reneged on the offer without justification.