Reasons Why Employers Withdraw a Job Offer

By hrlineup | 20.04.2021

Hundreds of applications are perused when a position is available in a company. Recruiters narrow these applications down to just a handful of the applicants through the interview process. In the end, one individual is chosen to fill the position and given an offer letter. However, sometimes employers realize that the chosen individual was not a perfect fit for the position. When this occurs employers withdraw a job offer.

In this article, you will have a better understanding of the reasons for job offer withdrawal. Employees will also understand how to respond when a job offer is withdrawn. At the end of it, you will be able to effectively manage the hiring processes. 

Can an Employer Withdraw an Offer of Employment After Employee Accepts? 

Many individuals wonder if a job offer sent to a job applicant can be withdrawn. Well, an employer has the power to rescind job offers for various reasons.  This can happen even after an employee has already accepted the offer. 

Note that job offer withdrawal can not be based on discrimination since it is illegal. However, the employer has reasons to withdraw on a disability basis only if the candidate is incapable of performing the job. 

There is always a deadline or notice for signing and withdrawing a job offer. If an employer withdraws within the timeframe and for valid reasons, then the employee will have no legal claims to the decision. 

Why is a Job Offer Withdrawn?

Many factors contribute to why companies rescind offers even after being sent and accepted by new employees. Note that your reasons must be valid and be done via a job offer withdrawal letter that is detailed with your reasons for withdrawal. 

That being said, below are significant reasons why employers withdraw job offers: –

    • Background checks – When candidates fail a background check, such as a criminal background or drug test, their job offer is normally automatically withdrawn.
    • Downsizing – Change always occurs in companies, and unforeseen circumstances could lead to a company choosing to downsize. This means that rather than offer positions, the companies will be cutting down on their existing employees.
    • Overspending – This occurs when a recruiter exceeds their hiring budget, and then have to make cuts to accommodate their new hires.
    • Bias in hiring – Bias could include instances of nepotism or accepting to hire individuals who did not conduct themselves well during the interview process.
    • Unconfirmed references – When a reference check is not done before the offer letter is given, or when a bad reference with negative insight on the character of the candidate.
    • Candidate Behaviour – There is often a short period between the job offer being given and the candidate starting the job. If the candidate behaves in a way that does not represent the company well during this time, then the employer can have their job offer rescinded.
    • Changing goalposts – Once the offer has been given and signed, the job applicant should not attempt to negotiate for an increase in salary and attach another offer for comparison. This can make the employer withdraw the job offer letter

The offer withdrawal is officially done with a job offer withdrawal letter. This type of letter needs to be short and straight to the point while including all the information the applicant needs. As a letter of regret, it should capture the name of the company and the job position. Following this, the reason you rescind a job offer should also be stated. 

It should also communicate that the hiring company is not bound to offer any compensation, particularly of the offer letter had not yet been signed and shared. The last portion of the letter should contain contact information for the HR team if the applicant has any questions that need resolution.

How to Respond When a Job Offer is Withdrawn?

Employers can send and offer letters and withdraw after you have accepted. Maybe you had already invested in starting the job leaving you with losses. When such happens, an employee can sue the employer for damages.

An employee will be required to provide evidence showing losses or damages due to the job offer rescinded. This can be relocation expenses or lost income if they had to quit their previous jobs to pursue the current one on offer.  

If you believe that you have a strong case against the employer, file a lawsuit. You first need to consult with a lawyer that understands your state’s laws and has successfully handled similar cases. 

Bottom Line

Offer withdrawal should only be applied as a last resort for a recruiter or HR manager, as the time and cost of the hiring process can be quite high. Furthermore, as digital, and online platforms continue to expand, recruiters need to be particularly careful about how they interact with all staff, both existing and potential. 

Ultimately, an employee can sue the employer on valid grounds for compensation. So before you send out any job offer withdrawal letter, consider what the outcome will be and how it will affect the organization.


  • Can an employer retract an offer of employment?

Yes. An employer can retract the employment offer if they see a breach in the employment agreement. We have listed above the significant reasons that can contribute to the retraction of an offer of employment. 

  • Can you sue a company for rescinding a job offer?

Yes. If you feel like your offer was rescinded unfairly or you suffered a loss in the process, then you can sue the company. 

  • Does a job offer mean you got the job?

Yes. A job offer means that a company wants to hire you. However, you need to agree to the terms attached to the offer and sign for you to be an official employee of the said company. 

  • Can you lose a job offer by negotiating salary?

Yes. After a job offer letter has been sent, negotiating salary is a valid reason for job offer withdrawal. 

  • Should you accept a job offer immediately?

No. Most job offer letters have deadlines for acceptance. Therefore, this gives you enough time to go through the offer letter and understand it before signing.