As someone who has worked in HR or has been on the job hunt, you may have come across two terms: employment agreement and offer letter. While these two documents may seem interchangeable, they actually serve different purposes. In this article, we will take a closer look at the difference between an employment agreement and an offer letter.
An offer letter is typically the first piece of documentation given to a candidate. It serves as an official, written offer of employment, and outlines the key terms and conditions of the job. This includes the job title, compensation, start date, location, and any other relevant information. The offer letter typically serves as a preliminary agreement, which the candidate can either accept or reject.
On the other hand, an employment agreement is a more detailed, legally binding agreement signed by the employer and employee. It defines the specific terms and conditions of employment, including job responsibilities, compensation, benefits, termination policies, and more. An employment agreement is usually given to employees after they have accepted the offer letter and have officially become a part of the company.
One of the biggest differences between the two documents is their level of negotiation. An offer letter is typically a non-negotiable document, as it outlines the company`s initial offer and cannot be amended by the candidate. However, an employment agreement can be negotiated by the employee, who may choose to request changes to certain terms before signing the document.
Another key difference is the duration of the documents. An offer letter is usually only valid for a short period of time, typically a few days to a week, before it expires. Once the candidate accepts the offer, the offer letter becomes void. On the other hand, an employment agreement is a long-term agreement that remains in effect for the duration of the employment period, unless otherwise terminated by either party.
It`s important to note that not all employers use employment agreements, and some may use different types of agreements, such as non-disclosure agreements or non-compete agreements. If you receive an offer letter that does not mention an employment agreement, it`s important to clarify with the employer whether one will be provided.
In summary, while an offer letter and an employment agreement may seem similar, they serve different purposes and have different levels of negotiation and duration. As a job seeker, it`s important to understand the difference between the two documents to ensure you fully understand the terms and conditions of your employment.