Offer letters: what they should state

General information, not legal or financial advice. Written October 10, 2026. What an offer may say, and what it commits you to, depends on the country and state where the person will work. Have your own counsel review it before you send it.

An offer letter is the first piece of paper that turns a hiring process into an arrangement. It is short, it is usually written by the founder, and it is read closely by the person receiving it, who may keep it for years. Founders tend to treat it as a formality, and it is often the document the two sides turn to when they remember the conversation differently.

This article explains what an offer letter is, which terms it usually states, what the phrase “at-will” means in the United States, and which questions are for your counsel. It does not draft a letter, recommend a salary or say what your letter must contain. The rules differ by country, by state and by the type of work, and the person who reviews your draft should be licensed where the employee will work.

What an offer letter is, and what it is not

An offer letter proposes the terms on which you would like someone to join. If the person accepts, the letter may be treated as part of the agreement between you, or it may be followed by a longer employment agreement that replaces it. Which one applies is a legal question. What matters on the founder’s side is to write the letter so it says what you mean and nothing you have not decided.

Two other documents often travel with it. The first is a longer employment agreement, where one is used. The second is the paperwork the law requires a new employee to complete, which is separate from the offer and is covered in onboarding a new team member. The offer is not a substitute for either.

An offer is also not the same as a contractor engagement. If the person is not going to be your employee, a different document and different questions apply, which contractors and employees: the classification tests describes. Settle that question first, because it changes which paper you need.

The terms an offer usually states

Offers vary, but most state the same handful of terms. The table lists them with a question to ask yourself about each one.

The test that runs through the whole table is whether a stranger could read the letter and understand what was agreed. A letter that says “competitive salary and good benefits” gives the employee nothing to rely on and gives you nothing to point to.

Pay and the classification of the role

Pay is where an offer meets a rule most often. In the United States, the Department of Labor’s fact sheet on the white-collar exemptions says that job titles do not determine exempt status, and that employees generally must meet certain tests regarding their job duties and be paid on a salary basis. Put plainly, calling someone a “manager” or an “associate” in the letter does not decide whether the person is owed overtime. What decides it is the work and how the person is paid.

For a founder this means two things. First, do not choose a title or a pay basis to make a cost look smaller without asking counsel what the rules require. Second, do not say in the letter that a person is “exempt” or “non-exempt” unless you have asked. The fact sheet does not tell you which category your role belongs to, and neither can this article.

Start date and conditions

A start date tells the person when to expect work and pay to begin. Conditions are the things the offer depends on, such as completing required paperwork. In the US, the citizenship agency says all US employers must properly complete Form I-9 for every individual they hire for employment in the United States, and the IRS says you should have a Form W-4, Employee’s Withholding Certificate, on file for each employee. If your offer depends on completing those forms, say so in plain words, and ask counsel what other conditions, such as references or background checks, are lawful where you hire and how to describe them.

Do not promise a start date you cannot control. If the date depends on the person’s current employer, an approval or a visa, the letter should say it is a target and say what it depends on.

What at-will means, and where it does not apply

Many offers in the United States say that employment is “at-will”. The Legal Information Institute at Cornell Law School describes it this way: at-will employment is an employment arrangement in which the employee may quit at any time. The same page says the employer may fire the employee for any reason and at any point, so long as the dismissal isn’t for an unlawful reason.

The phrase is easy to over-read. The page says that in 49 U.S. states, employment is presumed to be at-will if there is no express or implied employment agreement, and that the only exception is Montana, which generally requires employers to have good cause for dismissing an employee who has passed the probationary period. Notice what that means for the letter. Two points follow, and both are for counsel:

• The presumption can be displaced by an express or implied agreement. A letter that promises a fixed term, a particular process before dismissal or “job security” may be read as that kind of agreement. Ask counsel how your wording will be read.
• The presumption is about the United States. Outside it, an offer does not usually need to say “at-will”, and in many countries the rules on ending a job are quite different. The page says nothing about them, and neither does this article.

Because the rule varies by state, a letter copied from a company in another state may state something that does not fit yours. Ask counsel to check it against the state where the employee will work.

Written terms in other countries

A letter that suits the United States may fall short elsewhere. As one example, the UK government’s guidance says an employer must give employees and workers a document stating the main conditions of employment when they start work. It says the employer must provide the principal statement on the first day of employment. Among the items it lists are how much and how often an employee or worker will get paid, hours and days of work and if and how they may vary, holiday entitlement, and notice periods.

This is an example, not guidance for any particular hire. It shows that some countries require specific written terms, on a defined timetable, and that an offer letter written to American habits may not satisfy them. If you hire where the rules differ, hiring across borders sets out the questions, and you should ask a qualified adviser in that country what the offer must state.

Equity in an offer

If you intend to offer an ownership stake, the letter should not make a promise that your company has not authorized. A grant normally needs approval and its own documents, and the terms are set out there. Stock options for early employees explains what an option is and what an employee may ask. For the offer, the question for counsel is simple: how should the letter refer to a possible grant, and what must be true before the person is told a number?

Questions to bring to your counsel

An offer letter is short enough that reviewing it is not expensive, and it is the most efficient moment to ask. Bring your draft and the one-page record from your first hire.

For a wider list of questions to take to a lawyer, see questions to ask your counsel before you sign. If you used a structured interview, keep the scores with the file, since they record why you chose this person. The glossary defines shared terms.

What this article cannot tell you

This article cannot tell you what your offer letter must say, whether to use “at-will” or whether a particular person is an employee. It draws on five public sources read on October 10, 2026: a Cornell Law School encyclopedia page on at-will employment, a Department of Labor fact sheet, an IRS page, a citizenship agency page and a UK government page. The first four describe the United States and the last describes the United Kingdom, and none is a template. It does not cover state wage statutes, notice and final-pay rules, non-compete or confidentiality terms, benefits, or the equity documents themselves. Ask counsel licensed where the employee will work before you send anything.

In the data

These figures describe U.S. businesses in general, not WE’s results. Each one names its source.

Show the data as a table

Median years with the current employer, by age, January 2026

Age group	Median tenure
Ages 20 to 24	1.5 years
Ages 25 to 34	3.0 years
Ages 35 to 44	4.7 years
Ages 45 to 54	7.0 years
Ages 55 to 64	9.6 years
Ages 65 and over	9.9 years
All workers 16 and over	4.1 years

Wage and salary workers only; tenure is time with the current employer, not in the current job.

Source: U.S. Bureau of Labor Statistics, Employee Tenure, Table 1 , January 2026

Retrieved 2026-10-16. Values are the published medians for both sexes, copied as printed.

Sources

1. At-will employment, Legal Information Institute, Cornell Law School . Accessed October 10, 2026.
2. Written statement of employment particulars, GOV.UK . Accessed October 10, 2026.
3. Fact Sheet #17A: Exemption for executive, administrative, professional, computer and outside sales employees under the FLSA, U.S. Department of Labor, Wage and Hour Division . Accessed October 10, 2026.
4. Hiring employees, Internal Revenue Service . Accessed October 10, 2026.
5. Form I-9, Employment Eligibility Verification, U.S. Citizenship and Immigration Services . Accessed October 10, 2026.

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