So, after many months of job searching, you’ve finally landed your dream job. The recruiter called you with the good news, and you accepted. There’s one niggly issue, however: You have accepted job offer but haven’t signed contract. So, do you actually have the job in the bag? The answer is “It’s complicated.”
Although an unconditional verbal agreement or offer letter can be legally binding, the company can rescind such agreements with relative ease, especially since, in the U.S., employment is “at-will” in the absence of a contract that states otherwise. To help you carefully navigate the employment process, here’s some more detailed information on whether you should be worried when there’s no employment contract.
Things To Consider Before You Start To Worry
I get it. You really want this job, so you want to make sure that it doesn’t slip through your fingers. Before you start to worry, however, consider the fact that the contract possibly has to move through multiple channels or departments before it’s ready to be sent to a prospective employee.
If you’ve accepted a job at a large organization, there may be a lot of red tape involved. Although small-to-medium businesses often have less sophisticated structures in place, they may have a limited number of staff members who have to take care of multiple departments or tasks. In short, give the company a few days’ grace to get back to you with a contract.
Often, the recruiter or company will give an indication of when they plan to provide you with an employment contract. They may do so during a verbal job offer or after your acceptance of a job offer letter. If you haven’t heard from the company by that time, you can phone or mail them and politely request an update regarding your employment contract.
Whatever you do, however, refrain from hounding the company continuously for your contract. Although it’s advisable to have an employment contract in place, chances are that the company won’t rescind an employment agreement. The employment process costs time and money. They are likely to be as eager to employ you as you are to work for them.
Job Offer Letter vs. Employment Contract
It’s important that you learn about the different documents that you may encounter once you’ve received a verbal job offer. A company may or may not follow up a verbal job offer with a job offer letter.
Once you’ve agreed upon the terms and conditions in the offer letter, you may or may not be provided with a formal employment contract.
To help you distinguish between these two documents, I have written a short overview of each:
A Job Offer Letter
A job offer letter is a document that lays out the general terms of employment, such as job title, job description, salary, benefits, paid leave, and reporting structure.
Although the wording of a job offer letter can in some instances make the terms and conditions set out in this document legally binding, such a document mostly serves as a preliminary agreement between an employer and prospective employee.
If the terms laid out in the job offer letter are not agreeable to you, you have the opportunity to ask the company to make amendments.
For employers, a job offer letter serves as a means to officially inform a candidate of their intention to employ them. Doing so can minimize the risk of losing the prospective employee to the competition since they will hopefully stop searching for alternative employment after they receive and sign such a letter.
Conversely, a job offer letter also provides prospective employees with an added layer of security since such a document includes a written summary of the basic terms and conditions of employment.
However, an offer letter is typically regarded as unofficial and non-binding. Let me explain. There are two types of job offer letters: conditional and unconditional.
Often, job offer letters are unconditional, since they explicitly state that employment will be offered subsequent to certain conditions, such as passing a drug test or successfully obtaining a working visa.
If an employer fails to state that the offer of employment is subject to certain conditions, though, the offer letter becomes unconditional, in which case it can be legally binding. Especially if the employer uses words such as “guaranteed,” you may be able to successfully sue a company if the job offer is rescinded. It’s due to such risk that some companies opt against providing prospective employees with job offer letters.
An Employment Contract
While a job offer letter is often not legally binding, an official employment contract is always legally binding. In the event that you signed a job offer letter, your signed contract will supersede the former. In instances where details that were mentioned in the job offer letter are omitted in the contract, you should bring this to the attention of the employer before signing the contract.
While a job offer letter lays out the general terms and conditions of your employment, the contract provides detailed information, such as the time period of employment, details regarding a potential severance package, and actions that could lead to the termination of employment.
The purpose of an employment contract is to establish a binding commitment between employer and employee. In many countries, a large percentage of employees receive employee contracts, including executive, administrative, and professional employees.
Even in instances where employment contracts are not mandated by law, companies often opt to provide employees with contracts. Doing so is often beneficial for both employer and employee. In the U.S., however, things are a bit different.
Contract of Employment vs. At-Will Employment
You should be aware of the fact that all U.S. states, aside from Montana, have instated at-will employment laws, according to which an employer is free to terminate employees at will and for any or no reason. There are, of course, exceptions to the rule, such as termination due to discrimination based on race, gender, religion, and so on. At-will employment also provides employees with the right to quit at any time.
In the absence of a contract of employment, you will be considered an at-will employee in the U.S. by default. When a contract is in place, such a document will contain the explicit conditions under which termination of employment can take place.
This means that in the U.S., you may often not be presented with an employment contract after a job offer, in which case you will be viewed as an at-will employee. In such instances, a lack of an employment contract should be of no concern, and the job offer letter will set out the terms and conditions of your employment. In fact, companies in the U.S. are under no legal obligation to provide employees with either job offer letters or contracts of employment.
So, Do I Need a Contract of Employment?
In the U.S., the majority of employees are employed on an at-will basis. Often, this means that there is no employment contract involved, or an employment agreement may stipulate that a candidate is hired as an at-will employee. If your employer has made it clear that you’ll be hired as an at-will employee, the lack of a contract may be normal.
However, asking for a contract of employment in which the specific terms and conditions of your employment are laid out, including conditions for termination, will provide you with more rights and job security. At-work employees do have rights after termination, though, which include statutory rights under federal and state laws.
How Long Does One Typically Have To Respond To A Job Offer Letter?
When a company or a recruiter provides you with a job offer letter, they will typically inform you about when you should respond. Usually, you will need to respond anywhere from within 24 hours to a week. If you fail to do so within that timeframe, the job offer will expire.
Are Verbal Job Offers Binding?
As is the case with job offer letters, verbal offers can be conditional or unconditional. If an employer or recruiter uses contractual language during a verbal job offer, such as “If you agree to a two-year contract, we will provide you with a bonus of $10,000,” the verbal offer may serve as an implied or oral employment contract.
In such a case, a verbal job offer can be legally binding. In general, however, verbal job offers are conditional. This means that the offer is subject to specific conditions, such as passing a background or drug test.
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