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In this video tutorial, the distinction between an offer letter and an employment agreement is clarified, emphasizing that they should not be used interchangeably. An offer letter is any communication that extends a job offer and outlines essential details such as job title, salary, supervisor, schedule, and expectations, enhancing the candidate's understanding of the position. The tutorial discusses the potential legal implications of conflating these terms and offers insights on how HR can protect employers from unintended consequences. The importance of clearly defining each document is highlighted to prevent confusion and ensure proper understanding in the recruitment process.