I signed an offer letter a day late after verbally accepting. I only had 1 day to sign it and recruiter didn't let me know it was going to expire that soon. I am already in the background check/onboarding process. Is this potentially bad? I already emailed the recruiter but still haven't heard back yet.

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There's something wrong with the situation that they're only giving you one day. That's duress. If it doesn't work out because of this, you dodged a bullet.

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it's a long story. i did have a longer time to reply to the offer but they had to update certain things like compensation & start date. the offer letter itself however gave very limited time to sign

Given how tight the labor market is, I would think the recruiter would give you a second chance to sign it if you'd already verbally accepted

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