The hiring process for a new job can be full of stressful twists, a maze of initial and follow-up interviews, and the hope that it’ll all be worth it. This applies to hiring managers and interviewees, as asking all the right interview questions can be just as taxing as answering an endless stream of them.
As tedious as the job search can be, one aspect that’s never fun is the rescission of a job offer. Employers can rescind a job offer letter due to various circumstances throughout the interview process, even when hiring managers select qualified candidates. Offers of employment can be withdrawn until the candidate accepts the offer.
Employers want to keep, maintain, and support a top-notch staff. Incentivizing this staff is just as important as making sure you’re hiring the right staff in the first place. Unfortunately, that sometimes means letting go of other potential employees.
Below, we explore what situations could necessitate rescinding a job offer and how to navigate a job offer being withdrawn from both the perspective of the employer and the potential employee.
11 common reasons to rescind a job offer
When responding to a job offer being withdrawn, it’s vital to know an employer’s legal limits. The legal reasoning behind an offer being revoked could mean the difference between a win or loss, depending on your perspective.
Rescinding an offer for any discriminatory-related reason is illegal, and there are labor laws in place to help protect potential candidates from being discriminated against based on factors like race, gender, religion, national origin, age, and disability. If you’ve been handed a rescinded job offer or you’re looking to withdraw an offer that’s on the table, here are some of the legal and ethical reasons it can be done:
Internal Reasons
1. Hiring budget
A hiring budget is the predicted amount an employer plans to put toward hiring new recruits. The cost per hire (CPH) is calculated by dividing the sum of the internal and external recruiting costs by the total number of hires. If this amount is exceeded during the hiring process by hiring a few too many new employees, the job offer for those excess recruits might be rescinded.
2. Unauthorized salary offer
If a potential employee is offered a salary range outside the possible salary budget, the offer might be rescinded because the promised amount can’t be met.
3. Selected with improper criteria
Sometimes, there’s an internal issue with the conduct in which the employer or hiring manager interviews a potential candidate. Whether this improper conduct involves nepotism or some other form of discrimination, the HR manager should intervene and take over the process to limit possible repercussions that might affect the candidates.
4. Double hiring
The same job could accidentally be offered to multiple candidates if there’s a miscommunication between departments. In those cases, one of the job offers must be rescinded because only one employee can fill the role.
5. Organization restructuring
There are some instances during an interview process when the organization that offered the position might change its structure to the point that the position is altered or completely eliminated. In this case, the candidate should be informed immediately of any position updates.
6. Sending an offer wrongly
It’s an unfortunate error, but it can happen. If the offer is sent to the wrong candidate, it can be withdrawn by the employer.
External reasons
7. Candidate behavior
If an individual puts up an offensive or misrepresentative post on social media, they could be cut loose. This also goes for disorderly conduct or any past behavior that surfaces surrounding the individual. If you don’t want certain actions or beliefs associated with your organization, that’s a factor to consider during your hiring process.
8. Background check discrepancies
Many job offers are reliant on a clean background check. If a candidate has been convicted of felonies or crimes in the past that are correlated to their current desired position, such as embezzlement or fraud, it could be a line you don’t want to cross as an employer.
9. Candidate dishonesty
Honesty is a virtue. When you learn that a potential new team member hasn’t been forthcoming with the truth, it can be a serious issue. This could be a lie on a resume, twisting the truth in an interview, or any other incident in which a candidate was dishonest.
10. Non-Compete Agreements
In some cases, a potential employee might have signed a Non-Compete Agreement at another place of work. This legally means they can’t accept another job offer through a binding contract.
An employee might not remember having signed the agreement and isn’t out to lie or misconstrue their situation. Still, the employer could be subject to legal backlash if the process is continued.
11. Drug test failure
This goes hand-in-hand with the background check. Most offers are dependent on a drug-free lifestyle. If results come back to show that your candidate dabbles in some unsavory pastimes, it’s grounds for rescission.
What is the time limit for rescinding an offer?
When considering an offer rescission, it’s very important to approach the situation with full clarity of the circumstances. Withdrawing a job offer should never be done lightly, as you could face legal action if you’re not completely certain of proper protocols.
The employer can withdraw all job offers without legal implications until the point when an applicant accepts the offer. There’s usually a week’s window of time when this can take place.
Rescinding the offer after acceptance differs based on whether it’s a conditional or unconditional offer (which we explore in depth below) and whether the state you’re in operates as an at-will state.
How to rescind a job offer in 4 steps
If you’re looking for a foundational guide on how to approach rescinding a job offer as a human resource manager, here are a few steps to get you there in one piece:
- Consult professional legal counsel for legal advice and to perform a legal review.
- Have another potential candidate ready to fill the position before proceeding.
- Notify the withdrawn candidate as soon as you’re able, preferably by phone call or in person:
- Inform them that the meeting or phone call is confidential
- Professionally explain the reason for the rescission;
- And leave room for the candidate to ask any questions or explain their perspective.
- Formalize the final decision with a rescinding offer letter
Sample letters/emails to withdraw a job offer
Example 1
If you’re sending out an official rescission or letter of withdrawal to an applicant, it might look a little different depending on the reason behind it being sent. Just like other professional letters (such as a Salary Increase Letter), it’s vital to make the purpose clear. Whether by phone or in writing, withdrawing an offering because of an internal issue on the employer’s side might look something like this sample email to withdraw a job offer:
Dear [Candidate’s Name],
We’re sorry to inform you that the previous offer you received from [Organization Name] for the position of [position] was sent in error. We’re following up on that error to inform you that any further steps taken to accept the position of [position] don’t result in any obligation to employ or compensate you in any way.
If no action on your part has been taken thus far, there’s no need for any moving forward. Please send any questions or concerns you’d like addressed to [HR Manager]. You can find them at [phone number] or through [email address]. We apologize for the unfortunate error and thank you for your understanding.
Best,
[Name of HR Representative]
Example 2
If the reason you’re sending out a letter of withdrawal is correlated with a screening issue, that letter should be a bit more detailed. A template for this circumstance might resemble this rescind letter:
Dear [Candidate’s Name],
As made known to you in the recent offer received from [Organization’s Name], employment is based on several requirements being met during and after the interview process. These included things like [background checks/drug tests/screening].
After receiving the results of [background checks/drug tests/screening] you willingly agreed to, we found that you didn’t meet the conditions set forth in the job offer. Because of this, [Organization’s Name] is withdrawing the offer for [position] on the grounds of this unmet condition.
If you have any unanswered questions regarding additional information or how to address any disputes in the information presented, please refer to the Disclosure Form you signed previously.
Best,
[Name of HR Representative]
As with any case you might be addressing in the rescission letter, always exercise professionalism and as much clarity as you can provide to avoid unnecessary strife on both your part and the applicant’s.
Tips for candidates: How to respond when a job offer is withdrawn
A few actions can be taken from the candidate’s perspective when a job withdrawal is due to an organization’s internal errors. Here are a few steps you can take if you’re on the receiving end of a rescission:
1. Request a detailed explanation and learn from the experience
2. Keep the door open and check potential position reopenings
3. Negotiate other possible options
4. Continue your job search
If there’s one positive takeaway from having an offer withdrawn for an internal error it’s that the weight isn’t necessarily on you. Sometimes unfortunate things happen, and the best thing you can do is keep your chin up and look for the next open door.
Employment contracts and unconditional job offers
If you’re looking to withdraw an offer, there are a few key takeaways to remember. If you’re working in an at-will employment state— basically meaning the employer can fire an employee for any reason at any time and an employee can resign for any reason at any time — then rescinding a job offer falls into two technical situations: conditional and unconditional job offers.
In any case, an employer can rescind an offer without any legal weight up until the moment the potential employee accepts. If they’ve accepted an unconditional job offer, you could be bound by a Contract of Employment that might entitle the employee to certain actions should that offer be withdrawn afterward for a breach of contract. This still has to work within an at-will employment state, however, so the details may differ depending on location.
In the case of a conditional job offer, the same still stands true; the offer can be withdrawn up until the moment of acceptance. Still, after that, the job offer can be withdrawn by the current employer based on the conditions of the offer not being met. This could be a health screening result (but be careful when this overlaps with discriminating based on disability), background check discrepancy, drug test failure, or unsatisfactory references.
The biggest thing to remember is that avoiding ever having to send a withdrawal starts during the hiring process, not after. Make sure your team is always on the same page about the open positions and that everyone understands the potential legal risks that come along with mistakenly offering a job or not noting all the important elements of the applicant before the offer.
You can sidestep a lot of mess if you think it all through beforehand, but on the chance that you still have to send that dreaded withdrawal letter one day, these tips will help you get through it safely.
