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5 Reasons You Might Rescind a Job Offer – and Top 5 Ways to Ease the Impact

Source: Fisher Phillips, July 7, 2023

Finding the right match between a job candidate and a critical role in your organization can take time, dedication, and even a little luck – so the need to rescind an offer of employment can be difficult for you and the potential new hire. Even if you rarely rescind an offer, you should be prepared to follow certain best practices before and after the situation arises. What are the five most common reasons for rescinding an offer and the five steps you should consider taking to minimize the impact and your legal risk? 

Top 5 Reasons for Rescinding an Offer and Key Points to Consider

1. Failed Drug Test

If your company has a comprehensive workplace safety policy, your process may include making job offers contingent upon passing a pre-employment drug test. From the start, it’s a good idea to let job seekers know what to expect during the recruiting, interviewing, hiring, and onboarding process – and this includes mentioning any background screening, drug testing, or other requirements. Additionally, when applicable, you should make it clear that the job offer is contingent upon passing such tests.

While employers can generally rescind a conditional job offer if a potential new hire fails a drug test, many states require employers to follow certain steps before taking adverse action. Therefore, you should understand and follow the rules and guidelines in the applicable state. You should also recognize the state-law trend to protect off-duty use of cannabis and consider whether you want to continue testing for it, and if so, how you will handle positive test results without running afoul of such laws.

2. Background Check Issues

Perhaps you run a criminal background or credit check before an offer is official. If so, you should carefully review applicable rules and regulations if your selected candidate fails to meet your criteria.

Companies that conduct background checks on potential new hires must comply with a host of federal, state, and local laws. For example, under the Fair Credit Reporting Act (FCRA), you must provide applicants with advance notice (known as a clear and conspicuous stand-alone disclosure) that you will be conducting a background check, and the applicant must provide written consent. Additionally, you must provide the applicant with copy of the report and certain notices before and after taking adverse action.

Moreover, many jurisdictions prohibit employers from making decisions based on arrest records, and the U.S. Equal Employment Opportunity Commission (EEOC) has extensive anti-discrimination guidelines for employers that conduct background investigations, including conducting an “individualized assessment” relating to criminal history records.

You should also be aware of any state or local “ban-the-box” laws that dictate when in the hiring process employers can ask about criminal history and what steps they need to take if they intend to take adverse action.

3. False Statements on a Resume or Application

Although research results vary, many studies have found that about a third to half of job seeker admit to lying or making misleading statements on their resume. Common falsehoods involve prior work experience, skills, and education, according to Entrepreneur. For example, an applicant may imply they received a degree from a university they merely attended for a brief period – or they may fudge their dates of employment to inflate their tenure.

Do you have processes in place to verify such information? What steps do you take when you find a discrepancy? You should ensure your job applications and background screening forms explain what will happen if applicants provide false statements. Give them a chance to explain and follow consistent procedures.

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