Updated on March 21st, 2023
A letter of intent to hire is used to communicate a company’s interest in employing a job applicant. Unlike a conclusive employment contract, a letter of intent is a blueprint for negotiating a potential agreement between the parties. It assures the applicant that the company is serious about the job offer while also relaying the terms and conditions of the position. The letter specifies the proposed salary, work obligations, days off, start date, and other essential employment details.
A letter of intent to hire outlines general terms for a potential employment agreement. While the letter won’t be as long or comprehensive as a formal contract, it must still convey enough information to help the applicant decide whether to accept or reject the offer. The letter will generally include the following:
Employer and Applicant Information
The letter of intent must specify the names of the employer and the person applying for the job, as well as each party’s mailing address.
Intent of the Letter
It must be apparent that the letter conveys the terms of a potential agreement and doesn’t represent a final employment contract between the parties.
The letter must clearly and concisely describe the applicant’s work responsibilities. It should also specify when the employee is expected to start and whether the position is full-time or part-time.
Employers must establish the hourly wage or salary of the potential employee and describe whether they’ll be paid weekly, bi-weekly, monthly, etc. Employers can also outline any benefits they intend to provide to the applicant.
Terms for taking days off may be incorporated in the letter of intent, including whether the employee’s absences will be paid or unpaid.
Companies may choose to implement a probationary period during which the employee can be fired without cause or warning.
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LETTER OF INTENT TO HIRE
[SENDER (e.g., EMPLOYER) NAME]
[SENDER STREET ADDRESS]
[SENDER CITY, STATE, ZIP]
[RECIPIENT (e.g., EMPLOYEE) NAME]
[RECIPIENT STREET ADDRESS]
[RECIPIENT CITY, STATE, ZIP]
RE: Intent to Employ [EMPLOYEE NAME]
This Letter of Intent (the “Letter”) sets forth the proposed terms and conditions of an employment agreement between the Employer and Employee (the “Parties”) and shall govern the relationship between the Parties until replaced by a definitive, formal agreement addressing the same transaction and subject matter (the “Definitive Agreement”). The agreement considered in this Letter and in the Definitive Agreement is subject in all respects to the following:
1. THE EMPLOYER. [EMPLOYER NAME] (the “Employer”).
2. THE EMPLOYEE. [EMPLOYEE NAME] (the “Employee”).
3. CLASSIFICATION. Employee shall be considered [WRITE “full-time” OR “part-time”].
4. EMPLOYMENT PERIOD. The employment period shall be [WRITE “at-will” or “fixed-term”].
5. PAYMENT. Employee shall be paid $[EMPLOYEE WAGE] [WRITE “per hour” OR “annual salary”].
6. PAYMENT FREQUENCY. Payment shall be distributed to the Employee [PAYMENT FREQUENCY (e.g., WEEKLY)].
7. START DATE. It is the intention of the Employer to have the Employee begin employment no later than [EMPLOYMENT START DATE].
8. RESPONSIBILITIES. Employee shall be given the job title of [EMPLOYEE JOB TITLE], which will involve the following responsibilities: [DESCRIBE WORK RESPONSIBILITIES].
9. DAYS OFF. Employee shall have the option of taking [#] days off per year. The days off will be [WRITE “paid” OR “unpaid”].
10. INTENTION OF THE PARTIES. This Letter sets forth the intentions of the Parties to use reasonable efforts to negotiate, in good faith, a Definitive Agreement with respect to all matters herein. Notwithstanding paragraphs 10 through 11, which shall be legally binding, any legal obligations with respect to all other matters shall only arise if and when the Parties execute and deliver a Definitive Agreement.
11. GOVERNING LAW. This Letter shall be governed under the laws of the State of [STATE].
Employer’s Signature: ___________________ Date: [MM/DD/YYYY]
Print Name: [EMPLOYER NAME]
Employee Signature: ___________________ Date: [MM/DD/YYYY]
Print Name: [EMPLOYEE NAME]
Why It’s Used
Employers use a letter of intent to communicate the conditions of a job offer and demonstrate their willingness to hire the prospective employee. Through the applicant’s response, the employer can determine whether the individual is interested in the position or if they’ve found employment elsewhere.
Additionally, a letter of intent can help distinguish a company from other hiring businesses, mainly when recruiting top candidates in a niche or specialized market.
Signing a letter of intent doesn’t obligate either party to enter into a legally binding employment contract. However, they’ll be required to use “reasonable efforts” to negotiate an agreement. If this is not possible, the parties can back out from the arrangement without legal consequences.
Note: To avoid potential complications, the parties should only sign an LOI if the employment terms meet their needs.