Demystifying Employment Basics: Offer Letters, Relocation, ‘At-Will’ Employment was originally published on WayUp Guide.
Securing a job is daunting enough, and in a global pandemic, it can be downright painful. Unemployment is at one of the highest levels many of us have ever experienced, the stock market is a rollercoaster, and every day, the never-ending stream of bad news has the power to distract us, creating a sense of uncertainty and confusion.
WayUp team members heard loud and clear that many early-career candidates who are new to the market or new to economic uncertainty want a better understanding of some of the fundamentals surrounding getting a job during uncertain times.
We put together a basic guide that outlines some of the fundamentals we thought you should know.
- What is an offer letter?
- What is a verbal commitment vs. a signed commitment?
- What does “at-will” employment mean?
- What is a relocation package and when can I expect one?
- What does it mean if my offer has contingencies?
- What does it mean for an offer to be rescinded? When can that happen?
- What does it mean to be fired?
- What is a PIP?
- What does it mean to resign?
- What does it mean to be laid off?
- What does it mean to be furloughed?
- What is a severance package and when should you ask for one?
- What is a severance agreement?
- Why would an employer push back a start date? Can they do that? What does that mean for me, and what should I do?
- How should I react if I’ve been laid off, fired, furloughed, or had a start-date pushed back?
- Can I put the job that I had accepted on my resume if I didn’t actually start in it? What about on my LinkedIn or WayUp profile?
- If I left a job because of COVID (I was laid off or furloughed), should I mention that on my resume or online profile?
- As a job seeker, what should I be thinking about at a time when there is an unstable economy?
What is an offer letter?
An offer letter for employment is intended to lay out the terms of your employment offer. It’s an employer’s way of letting you know exactly what the job entails and what you can expect from accepting the role. Check out our article on the difference between offer letters and contracts to learn more about what you can expect from this agreement.¹
What is a verbal commitment vs. a signed commitment?
When extending a job offer to a candidate, some companies require the candidate to give a verbal commitment before the company sends a written offer letter. A verbal job offer, which is made and accepted formally, is legally binding on both the parties. However, it’s a bit more complicated than a written agreement since you must establish the terms of employment at the time of the offer.
Usually, in the case of a verbal offer, there is no witness or any other proof of offer or associated conditions. That’s the reason it’s usually followed by a written confirmation. The employer offers you a job, you accept it, the employer sends across an offer letter, and finally, you accept the offer in writing.
What does “at-will” employment mean?
At-will employment means the employer can terminate an employee at any time for any reason and incur no legal liability for doing so. As an employee, you have the freedom to leave an at-will job at any time for any reason without legal consequence. You should also note that working in an at-will job means the employer can change the terms of your agreement with no notice or consequences.³ Think it’s unfair? Put it this way: if you can give your notice anytime, the employer is just saying they can do their version of the same thing — end the relationship with you. They don’t technically need to give you any reasoning (though companies with strong HR teams will usually give you a reason, and/or put you on a performance plan ahead of time), as long as they’re acting within the law (i.e. you can’t fire someone for their race, gender, etc.)
What is a relocation package and when can I expect one?
Some employers offer relocation assistance to help with moving-related expenses such as hiring movers, purchasing storage, or buying a plane ticket. Not all employers offer relocation assistance though, and there are often limits to what is covered in these agreements, so be sure to ask what your new employer will cover if this is important to you.
What does it mean if my offer has contingencies?
When an offer has contingencies, this essentially means that the employer has included certain caveats to protect themselves in case new information surfaces concerning your ability to satisfy all of the requirements of the job.
Common contingencies include: criminal record checks, drug tests, relocation (i.e. that you relocate to the location in the offer letter first), or background checks to ensure that all information you submitted in your resume or application was accurate. If you are hired by a Staffing Agency, another common contingency is that the client you’ll actually be spending time with must also approve of your application. In most circumstances, this is not an issue.
If you see that your offer letter has contingencies, make sure you understand what each of them are before signing. If one or more are unclear, you can absolutely ask the recruiter you’re working with for more information.⁴
What does it mean for an offer to be rescinded? When can that happen?
When a job offer is rescinded, that means the company is no longer offering you the job. In general, there are two reasons why an offer is rescinded. The first reason is that after the offer was made, the company found new information about you and decided you were not the right fit for their company. You’ll likely never find out what that information is, and it could be anything from seeing something they didn’t like on your social media to talking to your former coworker who already works at the company.
The second reason a job offer is rescinded is when the company’s financial circumstances change suddenly and drastically. For example, the company had to conduct a massive recall of their new product, there’s a sudden investigation into the company, or external forces deplete demand for the company’s offerings (i.e., the coronavirus pandemic).
Sudden financial changes can also result in your offer being put on hold. When your job offer is on hold, it means the company would still like to hire you but can’t right now. And the company likely can’t tell you exactly if and when they will hire you in the future.
What does it mean to be fired?
You may have heard someone say, “I was fired”. This means they are terminated at a company and are no longer employed with the organization. There are a few types of terminations, voluntary and involuntary or a lay-off. Involuntary terminations or “firing someone” is when a company informs an employee that they are no longer employed with the company. Typically, being fired is a result of poor performance, a violation of a company policy, or some other act that isn’t in line with how the business wants to operate. But if you’re an at-will employee, you can also be fired for any reason (with a few exceptions including illegal discrimination) or no reason at all.
What is a PIP?
A PIP (Performance Improvement Plan) is a plan that an employer will often put their employee on if the employee is not performing. Most PIP’s last 4 weeks and outline very clear rationale for why a manager feels as though an employee is not performing, along with a plan for how to get them to improve their performance. Most PIP’s last 4-8 weeks, and the manager or HR usually do check-in’s along the way to see if the employee is on track. Sometimes a company will fire an employee midway if they are not on track to achieve their PIP, but other times, if the employee is on track, the employee can save their job by performing to meet expectations.
What does it mean to resign?
Voluntary terminations or resignations are when the employee informs the company they are no longer continuing their employment with the company. This is also known as “quitting” a job. Most companies expect someone to give two-weeks notice, which means you (the employee) will work for the company for two more weeks and then will end your employment. Some employers will not take you up on your 2 weeks notice offer, and others will. It is absolutely best practice to give at least two weeks notice so that your colleagues and your manager can plan for your transition. Don’t forget: most people remember an employee most by their final weeks / months at a company, so be sure to leave on a positive note, and work just as hard in your final days as you would have in your first few.
What does it mean to be laid off?
When a company lays off an employee, it means there is no longer a need for the position within the company as it currently exists. The loss of employment is through no fault of the employee.
What does it mean to be furloughed?
A furlough is “a temporary layoff from work.” People who get furloughed usually get to return to their job after a furlough. In general, people are not paid during furloughs but they do keep employment benefits, such as health insurance. When an employee gets furloughed, they are not guaranteed to be able to return (a furlough could be extended or could turn into a lay-off) so employers typically expect to see some turnover from furloughed employees who choose to not take the risk of waiting to be brought back.
What is a severance package and when should you ask for one?
Some companies choose to offer a severance package when terminating an employee after they have started in their role. A severance package is a flat payment to a terminated employee, and can sometimes include benefits. Employees who are fired or laid off can inquire about their final pay and the possibility of a severance package included in their termination. If you did not start in a role (i.e. you got an offer letter but did not sign it, or you signed it but didn’t start yet), and if your offer is rescinded for whatever reason, you likely will not be given a severance package, given that you didn’t actually work for thee employer.
Severance packages can sometimes be negotiated if an employee is leaving on good terms, though larger companies often have specific frameworks they’re looking to stick to, so don’t be surprised if the company isn’t willing to budge. Finally, senior employees (usually at the Vice President level or above) often negotiate severance terms into their offer letter (i.e. saying if they are fired for performance or due to lay-offs, that they will get a severance package of a certain amount). We do not recommend requesting this to be included in your offer letter if you are joining a company at the entry-level.
What is a severance agreement?
A severance agreement is an agreement between an employer and an employee that contains guidelines for when an employee is terminated. A severance agreement template includes details like how much pay the employee will be entitled to after termination, when benefits will be discontinued, etc.
As you look over your severance agreement, most employers will spell out their methodology and provide an overview of how your individual severance pay was calculated. Typical Agreements include:
- Your severance pay terms
- Your vacation pay terms
- Cobra (Benefits) Information
- Return of Property
- Non-compete Clause
- Confidentiality Agreement
- Unemployment Information
- A General Release of Claims and Covenant Not To Sue⁶
You should not expect to get a severance package if you are not willing to sign the terms the employer is requesting. Furthermore, if you do sign a severance agreement, receive the money, and then break one of the terms in the agreement (such as your NDA), you could be held liable for paying back the severance.
Why would an employer push back a start date? Can they do that? What does that mean for me, and what should I do?
An employer may push back your start date for a variety of reasons. For example, if you are hired to support a client, and then the employer loses that client’s contract, they may no longer need your services and may ask to push your start date back unless they can find a new contract for you to work on. Typically, offer letters and employment contracts will include a Force Majeure clause that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as war, epidemic, or Natural Disaster, prevent one or both parties from fulfilling their obligations under the contract. Right now, the economic uncertainty we’re facing coupled with our changing lifestyles in response to COVID-19 means many companies have to constantly reevaluate and restructure their organization.⁷
How should I react if I’ve been laid off, fired, furloughed, had a start-date pushed back, or had my offer rescinded?
Losing your job or having your start date delayed affects everyone differently, but it’s important to find healthy ways to cope if you do receive this news. It’s a very small world, and you never want to burn bridges in the workplace. Maintain a positive rapport with the employer, and demonstrate that you can handle this adversity without losing your professionalism — after all, you never know if you may want to apply for a position with that employer in the future, or if the HR person you’re dealing with may move to another company at a later date where you want to work.
Can I put the job that I had accepted on my resume if I didn’t actually start in it (i.e. my offer was rescinded before I started)? What about on my LinkedIn or WayUp profile?
You should always put your best foot forward when networking or applying for a new job. Providing an accurate summary of your work history is essential to establishing trust and being matched with the right job for you, so we recommend that you only update your online profiles with positions that you’ve actually worked in. However, on your resume, if you have had an offer rescinded due to an external factor (such as Coronavirus or a company going bankrupt, etc), we typically recommend having one line under your “Work Experience” that shows the company’s name and says “Position eliminated due to ___” so that employers know you were not procrastinating with your job search.
If I left a job because of COVID-19 (I was laid off or furloughed), should I mention that on my resume or online profile?
Context is key when employers are evaluating your reasons for leaving a position. Letting them know that you’re searching for a new opportunity because of COVID helps them understand that you were not let go for reasons related to your performance. If you’d prefer to not include this information in your resume or online profile, you can alternatively incorporate this in your cover letter. However, we typically recommend having this information on both your resume and your online profile in order to give future employers / recruiters more context. There is nothing to be ashamed of — millions of people were laid off due to COVID-19, and it was not any of their fault.
As a job seeker, what should I be thinking about at a time when there is an unstable economy?
- Review your resume. You should spend time editing your resume to ensure you’re sharing the most compelling information. Check out this article to help you understand how to write a winning resume.
- Pro Tip: Submit your resume to TopResume to get a free, confidential review from a resume expert.
- Research every company you’re applying to. How big or small is the team? Public or Private? Venture Backed? Are they profitable?
- Perform high-touch outreach. Once you’ve submitted an application to the company’s you are interested in, find the hiring manager on LinkedIn and send them a thoughtful note encouraging them to consider you for their role.
- First impressions are important. Check out this article to help you prepare for your first phone interview.
We’re all in this together. More, now than ever, job seekers have an unique opportunity to stand out during the economic uncertainty. When we say knowledge is power, job seekers have helpful information available to them so they can take control to understand and demystify the hiring process. That way, job seekers can spend more time on the things that matter like crafting a thoughtful resume, researching the right role, and interview practice.
- WayUp. What’s the Difference Between An Offer Letter And A Contract?
- UpCounsel. Is a Verbal Offer Binding: Everything You Need To Know?
- National Conference of State Legislators. At-Will Employment Overview.
- Career Trend. What Is a Contingent Job Offer?
- FlexJobs. Rescinded Offers and Hiring Freezes: What They Mean for Jobseekers.
- Salary.com. 9 Things to Know About Your Severance Package.
- SHRM. You Are Excused: Force Majeure and the Workplace in the COVID-19 Era.
About the Authors:
Jim Leahy is the Director of Human Resources at WayUp. His decade of experience in building teams has made him passionate about helping others build their brands.
Matt Sheffield has worked with thousands of WayUp users to help them get their dream job. He now works in WayUp’s Business Operations department where he manages internal job requisitions.