Learning how to rescind a job offer the right way is important for professional, reputational, and legal reasons. Regardless of the reason, it is crucial to handle the process with professionalism. Doing so not only protects your company’s reputation but maintains a positive experience for the candidate involved.
First, you need to ensure your reasoning doesn’t violate labor laws (i.e., discrimination against a protected class). You’ll then notify your candidate of the decision, explain the reason the offer is being rescinded, and give the candidate an opportunity to follow up. Finally, formalize your decision by sending a letter to the candidate.
Key Takeaways
- Avoid rescinding a job offer for discriminatory reasons (e.g., age, race, gender, etc.)
- Explain the reason for the rescinded job offer and allow for candidate follow-up questions
- Send a formal letter to rescind a job offer
Use our free rescinded job offer letter template below, which you can customize to suit your company’s needs.
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Considerations Before Rescinding a Job Offer
Rescinding a job offer properly can mitigate any potential legal issues that may arise from such actions. It is advised to consult with legal counsel during this process to avoid potential lawsuits or damages.
By adhering to employment laws and regulations, you can prevent any claims of discrimination or breach of contract from being levied against your organization. Take the appropriate steps to communicate directly with the candidate about why the offer is being withdrawn to further minimize legal risks.
- Review Terms – Be sure to review your offer letter or employment contract to determine if there are any specific provisions regarding rescinding offers.
- Be Transparent – When communicating the decision to rescind the offer, it’s essential to be transparent and provide clear reasons for your actions.
- Communicate – Maintaining open lines of communication throughout the process can help ease any concerns or disappointment resulting from this difficult decision.
- Keep It Legal – Rescinding a job offer should always be approached with caution and handled in accordance with legal guidelines.
- Remove Bias – Rather than making reactive decisions influenced by bias or prejudice, organizations should focus on creating an inclusive environment where all individuals have an equal chance at employment opportunities.
Many states have at-will employment. As long as the reason for denying employment doesn’t break any federal hiring or employment laws and isn’t for reasons relating to previous whistleblowing activities, employers can terminate the employment relationship at any stage in these states.
Legal Reasons to Rescind a Job Offer
Employers rescind job offers for many reasons. These include both external (or candidate) factors, including failed background or drug tests, and internal (or company) factors, such as budget issues or the offer being made to the wrong candidate.
External (Candidate) Factors
When unforeseen circumstances arise with a particular candidate, it may be appropriate for your company to rescind a job offer. These may include:
- Failed background check
- Failed pre-employment drug screen
- Failed employment references
- Offensive social media behavior discovered after the job offer
- Concerns around the accuracy of resume content, including work experience or education
- Dishonesty about earned skills, licenses, or qualifications
Internal (Company) Factors
Certain instances within your company may prevent you from hiring a candidate for whom you have already offered a job. These may include:
- Change in strategy: When company objectives have changed or evolved regarding the hiring of the right individual for a position
- Budgetary changes: Unintentionally exceeding the budget for the position
- HR-related error: Offering a candidate the incorrect salary or total compensation package
- Management oversight: Double-filling a position
- Change in business outlook: Hiring for a position that has been newly tagged for elimination
- Illegal or improper conduct: Improper behaviors or conduct during the interview and selection process (may include biases among interviewers)
- Incomplete pre-employment process: Failure to check employment or character references before the job offer
- Mistaken identity: Job offer shared with the wrong candidate
Illegal Reasons to Rescind a Job Offer
Rescinding a job offer cannot be for reasons that are protected by law, such as discriminatory-related reasons, including:
- Race
- Religion
- Gender
- Gender identity
- Pregnancy
- Age
- National origin
By rescinding a job offer for such reasons, companies not only jeopardize their reputation and credibility but also open themselves up to potential legal consequences.
Protecting employees from discrimination starts with the hiring process itself. Employers must ensure that their recruitment practices are fair and unbiased. Rescinding a job offer based on discriminatory grounds undermines the principles of equal opportunity and fairness in the workplace.
Handling the Job Offer Withdrawal
Once you are secure in your reasoning and ready to move forward with rescinding a job offer, follow these steps:
Step 1: Notify the Candidate
Rescinding an offer has limited risk to the organization before sending an offer letter, even if a verbal indication was made. However, when you’ve already sent an offer to the candidate, you will want to contact them and clearly state that the job offer has been rescinded.
Delivering the news in person is ideal, with initial contact usually done over the phone. If you are unable to speak with the candidate in person, such as with a remote employee, it is recommended that you conduct the initial notification through a video call. Although uncomfortable, speaking directly with the candidate can best express the compassion and professionalism that represents your company.
Step 2: Describe the Reason
In clear terms, describe the reason the offer is being rescinded. Much of the time, companies rescind a job offer due to a failed pre-employment drug screen or background check. Share your company’s concerns without displaying judgment or accusations of dishonesty.
There may be a simple reason for the job offer being rescinded—and if the candidate is still eligible for this or another position in your organization, you will want to stay on good terms. If it is due to an internal company decision, such as budget limitations or a change in strategy, be sure to let the candidate know that you will keep their resume on file for future consideration.
Step 3: Allow for Candidate Follow-up
Provide the candidate with an open invitation to follow up with the company with questions they may come up with after the fact. In addition, if the rescinded job offer was due to candidate error or findings, you will want to allow them to explain. Although this may not change your decision, it is a best practice.
Step 4: Send a Formal Letter
When you rescind a job offer, it is not complete until you have delivered a formal letter to the candidate, explaining what occurred and what was discussed over the phone or in person. This letter may be sent by email or regular mail but should be delivered to the candidate within three business days of your conversation with them.
Your physical letter should include the following:
- The candidate’s name and address
- A reference line that clearly states the official job offer is being rescinded
- The title and date of the position that was originally offered
- The reason the offer is being rescinded
- The signature of the hiring manager, position manager, or owner of the company
Job Rescind Letter Template
Having a well-crafted job rescind letter template can make the process of rescinding a job offer much smoother. The letter should be concise yet professional, clearly stating the reason for rescinding the offer while also expressing regret for any inconvenience caused. It is essential to be honest and transparent in your communication, ensuring that you provide enough information to explain your decision without going into unnecessary detail.
Download our customizable job offer rescind letter template here.
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Remember that although withdrawing an offer may not be pleasant, it is sometimes necessary due to unforeseen circumstances or changes within the organization. By using our job rescind letter template as a guide, you can ensure that your message is both clear and empathetic while minimizing potential harm during an already difficult situation.
How to Rescind a Job Offer Frequently Asked Questions (FAQs)
When communicating the decision to rescind a job offer, be clear and specific about why the offer is being rescinded. It is not necessary to go into personal detail (and actually advised against), however.
As long as the rescinded job offer is not due to discriminatory or otherwise illegal circumstances, a candidate most likely would not be able to win a legal claim against an employer. Most states have at-will employment, meaning an employer can terminate the employment relationship at any time for any reason.
Bottom Line
Rescinding a job offer is the act of canceling an offer of employment that was previously made to a candidate, usually because the employer stumbled on to an area, or multiple areas, of concern. Although you have the right to exercise business-related decisions that best serve the company, it is important to understand how to rescind a job offer as an employer. Rescinding an offer of employment should be done professionally and legally.
