An Offer You Can't Refuse: Offer Letters vs. Employment Agreements—What's The Difference?

When hiring new employees, it is critical that employers put careful thought into the documents they use to formalize the employment relationship. Among the most common tools are offer letters and employment agreements. These documents are sometimes used together as part of what is called a "two-step" offer.

What Is an Offer Letter?

An offer letter is typically a high-level summary of a job offer, used by employers to outline the basic terms of employment and clearly communicate the offer they are making to a potential employee. While some employers use offer letters to establish the employment relationship, it is more common for them to serve as a preliminary step in the hiring process. Offer letters are often used for new hires but may also be given to existing employees transitioning to new roles.