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What is a letter of employment?
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In this article, I will break down the Letter of Employment so you know all there is to know about it!
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Table of Contents
What Is A Letter of Employment
A letter of employment is a term used to refer to a document that confirms a person’s employment or work status.
In other words, the letter of employment confirms a person’s employment relationship with a company.
Typically, a letter of employment may be necessary when a person applies for a mortgage or loan.
The lender will ask the borrower to provide a letter of employment confirming that the person is effectively employed and get some information about the person’s employment.
The letter of employment can relate to any aspect of a person’s job such as verifying past employment, current employment, or even future employment.
In most cases, companies are familiar with letters of employment as their human resource department receives such requests from time to time from their employees.
Why Employment Letters Are Important
Employment letters are important as they confirm someone’s employment history, functions, salary, or other specifics relating to a person’s job.
Such letters can be used for many purposes.
The most common reasons why employment letters are used are the following:
- New employer validating a person’s past experience
- To support an employee’s c.v.
- To give a mortgage lender
- To give a finance company for a loan
- To provide a landlord to show employment
- To provide the government
- To provide the insurance company
Although employees may have different documents proving their employment, such as pay stubs or employment contracts, an employment letter is useful as it will typically be issued around the time when it was needed.
For example, mortgage lenders may ask for a letter of employment that is not dated more than 30 days from the loan application date.
A financing company may only approve a car loan if the employment letter is recent.
Employment Letter Content
A standard employment letter will generally have three main elements: employer’s information, employee’s information, and the third-party’s information.
The employer’s information includes the name of the company, company address, company contact name, and other relevant information about the employer.
The employee’s information can include a variety of things, such as:
- Employee name
- Employee number
- Employee address
- Hire date
- Job title
- Employee salary
- Description of job duties
- Other employment information
The third party’s information includes the name and address of the third party to whom the letter is addressed to.
For example, if the letter is intended to support a mortgage application at the bank, the employment letter will be addressed to the bank or bank representative.
How To Write An Employment Letter
Writing an employment letter is not very complicated.
Typically, these letters are not more than one page and are quite short.
Just like any other letter, you should write the letter using a business letter format.
Your letter should start by indicating what the letter is for and state the reasons why you are writing the letter.
This way, the recipient of the letter will understand why the letter is being issued to them.
Then, you indicate the information requested on the employee.
For instance, if the third party is looking to get a confirmation that the individual is effectively employed and earns a salary, the letter should indicate precisely that.
Once the employee information is confirmed, you conclude with the standard salutations.
Make sure that you include your contact information so the recipient can contact you as may be needed.
Letter of Employment Sample
Let’s look at a typical employment letter to illustrate how it’s written.
I’ll follow the business letter format.
Re: Letter of Employment
We have received a request from [Employee Name] to provide you with the present letter of employment.
This is to confirm that [Employee Name] works for [Employer Name] as a [Title] since [Hire Date]. The [Employee Name] earns an annual salary of [Salary].
Should you need any further information, please don’t hesitate to reach out.
[Employer Representative Name]
[Employer Representative Title]
What Not To Include In Letter of Employment
Writing a letter of employment is quite common for many companies having employees on the payroll.
When writing your letter of employment, you should keep it simple and to the point.
There are certain things that you should avoid putting in a letter of employment to prevent unwanted consequences.
Every jurisdiction will have laws that employers must obey.
As such, here are certain pieces of information relating to employees that should not be included in letters of employment:
- Person’s gender
- Person’s race
- Person’s religion
- Person’s sexual orientation
- Person’s disability
- Person’s health status
Also, employee information is confidential by nature.
When disclosing employee information, it’s important that employers are authorized by the employee to release the specific information.
Employers should avoid confirming information that the employee has specifically not asked for.
Letter of Employment FAQ
What does “letter of employment” mean?
A letter of employment is a letter that is written by a person’s employer, whether current or past, confirming a person’s working status within the company.
The objective of this letter is to confirm certain key aspects of a person’s job, typically how many years the person has been working at the company, the person’s functions within the company, and how much they earn at the time of the letter.
Why is a letter of employment needed?
The letter of employment is needed for many purposes such as employees wanting proof of employment, landlords looking to validate tenants’ working status, lenders wanting to know a person is duly employed, or government agencies inquiring about a person’s work status.
How to request a letter of employment?
Employees can request a letter of employment from their employer at any time.
In most cases, the request is sent to the company’s human resources or the employee’s superior.
The request should be professional, indicate to whom the letter should be destined to, and what information to include in the letter.
What’s included in a letter of employment?
Generally, the letter of employment can include the following information:
- The employee’s name and address
- The employee number
- The employee’s title or job functions
- The employee’s total earnings
- The frequency at which the employee is paid
- The wages that are fixed and variable
- The location of the person’s employment
- The employer’s name and address
- The employer’s contact name
So there you have it folks!
What does a letter of employment mean?
In a nutshell, a letter of employment is a letter employers issue to confirm certain details relating to an employee’s job.
In most cases, letters of employment are used to confirm that a person is effectively employed by the employer, the person’s title, and salary.
Very often, these letters are used when employees apply for a loan, mortgage, credit card, car loan, apply for certain types of insurance, or when dealing with the government.
It’s important that letters of employment remain on point, be short, and concise.
Now that you know what is a letter of employment and how it works, good luck with your research!
I hope you enjoyed this article on Letter of Employment! Be sure to check out more articles on my blog. Enjoy!
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