An offer letter is a short, at-will summary of the job. An employment contract is a longer agreement that binds both sides to terms such as a fixed term, notice, severance and restrictive covenants. Most small employers send an offer letter for every hire and add a contract only for key roles.

When the role needs more than a letter, build the longer document with the employment contract template. If the person will run their own business and send you invoices, they may not be an employee at all; the 1099 vs W-2 calculator compares the cost of each arrangement.

An offer letter does not replace the written pay notices some states require at hire. The generator adds a sentence pointing to the notice and flags it in the warnings.

• California, Labor Code § 2810.5.At hire, non-exempt employees must get a written notice with the pay rate and basis (including overtime rates), allowances, regular payday, the employer's legal and trade names, address and phone, the workers' compensation carrier, paid sick leave rights, and any disaster declaration issued within 30 days before the start date. Changes must be given in writing within 7 calendar days unless they appear on the next wage statement. The Labor Commissioner publishes the DLSE-NTE template.
• New York, Labor Law § 195(1).Every new employee, exempt or not, gets a written notice of pay rate and basis, allowances, regular payday, and the employer's names, address and phone, in English and in the employee's primary language when the state has a template for it. The employee signs an acknowledgment, and the employer keeps it for six years. Templates such as LS 54 (hourly) and LS 59 (exempt) are on the NYDOL pay notice page.
• Montana, at-will exception. Montana is the only state where an employee who finishes the probationary period can be discharged only for good cause (Mont. Code Ann. § 39-2-904). If the employer sets no probationary period it is 12 months, and the employer can extend it to 18 months in total (§ 39-2-910). For Montana the generator swaps the at-will paragraph for a probationary-period paragraph.

A growing list of states and cities require a good-faith pay range in job postings, so the salary in your offer letter should usually fall inside the range you advertised. The main laws in effect as of October 2026:

Connecticut expanded its wage range rule on October 1, 2026 to require the range and a general description of benefits before compensation is discussed. Coverage of remote jobs, the details a posting must list (benefits, bonus, commission) and penalties differ by law, so check the agency guidance for each state you hire in.

Once the offer is signed, these forms and filings come next:

1. Form W-4 for federal income tax withholding, collected before the first payroll. Our Form W-4 guide walks through each step.
2. Form I-9. The employee completes Section 1 no later than the first day of work; you examine documents and complete Section 2 within three business days. Keep it for three years after hire or one year after employment ends, whichever is later.
3. State withholding certificate in most states with an income tax. A few accept the federal W-4, so check your state revenue department.
4. New-hire report to the state directory within 20 days of hire under federal law; some states require it sooner.
5. State pay notice in California (non-exempt employees) and New York, plus any other notices your state requires.
6. Payroll setup:direct deposit authorization, benefits enrollment, and, for a first hire, state unemployment and workers' compensation accounts.

Run the first paycheck through the paycheck calculator to show the employee their take-home pay, and the payroll tax calculator to see the employer side: Social Security, Medicare, FUTA and state unemployment tax.

Harbor Lane Coffee Roasters in Austin offers Maya Torres an operations manager job at $62,000 a year, exempt, paid every two weeks, with a $2,000 signing bonus. That is about $1,192.31 a week, well above the federal $684 floor, and Texas sets no higher one, so the letter shows no salary warning.

Switch the work state to California and the same offer is flagged: California's 2026 exempt minimum is $70,304 a year ($1,352 a week). The owner can raise the salary to at least that figure or classify the job as non-exempt and pay overtime. Before sending either version, the employee cost calculator shows what the hire costs with payroll taxes and benefits, and the PTO accrual calculator turns 15 days a year into an hours-per-paycheck accrual rate.