This article is written to provide you with an understanding of what an Addendum Letter is. Included in this article is a template and example of the Addendum Letter for you to download and use at your company.
When there are unexpected off-cycle changes being made to an individuals employment terms and conditions (i.e. total rewards, change of work schedule, location, etc.), it would be beneficial to speak directly with the employee(s) prior to the effective date of change. Once you have had that verbal conversation, it would be best practice to communicate the changes in a written document, which is called an Addendum Letter.
An Addendum Letter is a valuable resource to have, as it outlines the expected changes that are going to be made to an individuals employment terms and conditions, which can be either temporary or permanent changes. Regardless of how long the changes are in effect, employees should be made aware of any changes being made to their employment terms and conditions. Some changes that are generally outlined in this letter are listed below, but are not limited to:
- Work Schedule
- Employment Status
- Employment Type
- Base Salary
- Vacation Entitlement
- Sick Days
- Benefit Uplifts
- Work Location
- Travel and Accommodation Allowances
Businesses can administer the letter either as an agreement or informational document. We recommend having the employee sign and agree to the letter. This will protect your company from possible legal matters that could result from a disgruntled employee making the claim that they never saw the document.
Download the Addendum to Offer of Employment Letter template.
This completes the Compensation Letter series, if you choose to implement these simple and useful tools to keep a record and inform your staff of changes, there won’t be any need to overcompensate!