About to make my first hire (full-time W-2 employee, California). What needs to be in the offer letter? Seeing templates that are 1 page vs 10 pages. What's actually legally required?
California requirements are stricter than most states. Your offer letter should include:
Essential terms: Job title, start date, salary/hourly rate, pay frequency, at-will statement, reporting structure, work location, exempt/non-exempt classification.
California-specific: Must state at-will status clearly. Must specify if position is exempt from overtime.
Separate documents you'll also need: PIIA (invention assignment agreement), arbitration agreement if you want one, employee handbook acknowledgment, I-9, W-4, CA DE-4.
1-2 pages for the offer letter is fine. The 10-page versions usually bundle everything together.
Use a PEO like Gusto, Rippling, or Justworks for your first hires. They provide compliant offer letters, handle payroll, benefits enrollment, and all the California compliance stuff. Worth the ~$50/employee/month to not screw something up.
California has specific meal break, rest break, and overtime rules. Get a proper handbook too — one wage & hour lawsuit can sink a startup.
If you're offering equity: don't put the specific grant in the offer letter. Say "eligible for equity grant of X shares, subject to board approval and equity incentive plan terms." The actual grant is a separate stock option agreement.
This protects you if something changes between offer and start date. Also make sure your 409A valuation is current before granting options.
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