If you’re a business owner, you’ll probably run into a situation that requires verification of employment. You may receive a request from a former employee, or you might want to verify a job candidate’s employment.
Even your current employees may contact you and ask you to verify employment so that they can get a bank loan or visa approval. The type of verification you provide depends on who’s asking and why.
Keep reading to learn when someone might request verification of employment, how you can provide it, and what employee information you’re allowed to give.
Understanding Employment Verification
Employment verification is the process of confirming someone’s current job details or employment history. It’s usually done while hiring for a new position, but that’s not always the case.
Here are the various reasons someone might request verification of employment.
Verification of Employment for Hiring
Checkster surveyed job applicants and found that 78 percent of them lie or misrepresent themselves on their resumes. Job candidates most commonly lie or stretch the truth about job title, work experience, and responsibilities.
While performing a background check can alert you to a candidate’s legal history, it can’t tell you if they’re lying on their resume.
The only way you can know that your candidate’s resume accurately reflects their job history is by requesting employment verification from their previous employers. If a candidate isn’t honest, it’s better to find that out before making your hiring decision.
Alternatively, you may be asked to verify employment history and details for a former employee seeking a new job. In most cases, you’ll receive a call from a potential employer. But sometimes, your former employee may contact you requesting an employment verification letter.
Alternate Reasons to Request Employment Verification
Human resource managers aren’t the only people who ask for employment verification. Lenders, landlords, and government agencies may also submit an employment verification request.
Employment Verification for Loans
When one of your employees applies for a credit card, mortgage, or other loans, you may receive an employment verification request from their lender. Lenders verify employment while reviewing applications to ensure that the applicant hasn’t lied.
Typically, lenders only need to verify current employment, not job history. So, you may receive a call from a lender asking about an employee’s job title and salary. Lenders may also ask you if it’s likely that your employee will continue to work for you.
In most cases, lenders only need verbal confirmation over the phone. However, some may ask for an email or fax to have written confirmation from you.
Before providing an employee’s salary history for a loan, check with them to ensure they’re actually applying for a loan. Sharing an employee’s salary information without their permission can affect the trust you’ve developed with your team.
Employment Verification for Leases
Landlords and building supervisors use employment verification when reviewing applications from potential tenants. It helps them decide if the applicant will be able to pay rent on time consistently.
The information a landlord requests will be just like what a mortgage lender requires. They’ll likely ask you to confirm your employee’s job title and current salary.
If an employee has been with your company for less than two years, a landlord may also inquire about their work history.
Employment Verification for Green Cards and Visas
Government agencies use employment verification when processing immigration requests for citizenship, green cards, and visas.
Anyone applying for a family- or employment-based green card needs to show they have the means to support themselves. So, the government confirms that by verifying salary, current employment, and continued employment.
Suppose the government asks you to verify employment for immigration purposes. In that case, you’ll have to write an employment verification letter that includes your employee’s job start date, current employment status, position, and salary.
You’ll submit your letter along with an Affidavit of Support, which is either Form I-864 for family-based green cards or Form I-134 for visa sponsorship.
Laws for Verification of Employment
As an employer, you’re not legally required to respond to employment verification requests unless they come from the federal government. Failing to respond can result in fines, and if your company has government contracts, you may lose those for a period of up to 12 months.
Besides that, employment verification laws vary by state.
Salary Disclosure
Some states, like New York and California, don’t allow potential employers to request salary information. These laws are known as salary history laws, and they prevent you from lowering your salary offer based on a candidate’s previous earnings.
In most cases, hiring-based employment verification requests don’t ask for salary or earnings.
If you receive a request for your employee’s salary information, check with the employee and confirm that salary information is necessary. Or, you can make it a policy that you don’t release salary information about current or former employees.
In some states, you may be fined for each employee you released salary information about. You can view your state’s employment verification guidelines and restrictions here.
When you receive an income verification request from a lender or credit card company, you should still check with your employee before releasing that information. Make sure your employee has actually started an application that needs salary verification and that the request isn’t from someone fishing for information.
Disability Information
The Americans with Disabilities Act protects information about an employee’s disability. New employers cannot ask specific questions related to a candidate’s disabilities. However, they can verify whether or not your former employee can perform the job’s responsibilities.
For example, you can verify whether or not your former employee can lift heavy boxes or operate specific machinery. Other than that, avoid providing any medical information when verifying employment.
You also shouldn’t ask a previous employer for information about a potential employee’s health.
Employment Verification and Defamation Lawsuits
If your relationship with a former employee ended poorly, it could be challenging to provide a reference check for them. As an employer, you’re allowed to discuss someone’s work history, performance, and reasons for termination (if that applies).
However, the information you provide has to be true.
In rare cases, a former employee may sue for defamation if they believe you provided false information during employment verification.
A defamation suit requires three things:
- Proof the former employer made false statements
- Proof the false statements were communicated to a third party
- Proof of injury (such as not receiving a job due to false and defamatory statements)
While this may seem extreme, there are a few simple steps you can take to limit your liability as an employer when verifying employment.
- Provide documented, verifiable information.
- Require former employees to sign a release of employment verification information (include a summary of all the information you might release such as start date, end date, job title, and reason for termination).
- Educate your managers to operate within the law.
- Create a central employment verification process through HR.
In other words, stick to basic employment information such as job position, start date, and end date. And, if you’re asked for more personal data such as previous salary, always check with your state laws and former employee before providing that information. Asking for permission before releasing salary information helps you build trust with your employees.
Employment Verification Methods
There are a few ways you can provide or request verification of employment. The method usually depends on the reason for verification.
Employment Verification Letter
Requests for an employment verification letter (also known as a proof of employment letter) will usually come from your current employees. Employment verification letters can be used for loan applications, leases, and immigration purposes.
Reference Call
Phone calls are another common way you may have to verify employment. You’ll usually receive them from a potential employer.
Pay Stubs
Pay stubs are a form of employment verification used on applications for loans, leases, and immigration. In this case, your employee can share their W-2 information or pay stubs themselves. As an employer, you wouldn’t receive requests to release pay stubs.
Former Contract
Instead of asking for a proof of employment letter from their previous employers, some employees may send copies of their previous contracts due to time constraints or personal reasons.
If you’re verifying employment for a job candidate, you can accept both former contracts and employment verification letters. Still, the proof of employment letter from a previous employer will be more thorough.
How to Write an Employment Verification Letter
Usually, your employees will let you know who to send the letter to and what information to add to it.
An employment verification letter should include:
- Your company name, address, and contact information
- Employee name
- Dates of employment
- Job title (or positions held)
- Job description
- Reason for termination (if applicable)
- Current salary (if requested and if state laws allow)
Employment verification letters should be brief. Typically, you won’t need more than 100 words.
Be sure to ask your employee (or former employee) if the letter should be a paper copy or if it can be sent via email.
Sample Employment Verification Template without Salary Information
Your Name
Your Job Title
Company Name
Company Address
Date
Name of Person Requesting Verification
Job Title
Company Name
Address
City, State, ZIP Code
Dear (recipient name),
This letter is to verify that (employee name) has been employed at (company name) in the role of (job title). He/She has been employed with us since (start date).
In his/her role he/she was responsible for:
- (Job responsibility example)
- (Job responsibility example)
- (Job responsibility example)
If you require any additional information, please feel free to contact me at (your phone number).
Sincerely,
Your Name
Sample Employment Verification Template with Salary Information
Your Name
Your Job Title
Company Name
Company Address
Date
Name of Person Requesting Verification
Job Title
Company Name
Address
City, State, ZIP Code
Dear (recipient name),
This letter is to verify that (employee name) has been employed at (company name) in the role of (job title). He/She has been employed with us since (start date).
I am authorized to release the following salary information on his/her behalf.
- Annual gross salary of $(annual salary) paid (weekly/bi-weekly/monthly) by (check/direct deposit).
- A maximum of (percent)% of annual salary is eligible for a performance bonus.
- Benefits package includes: Medical insurance, (number of) vacation days, sick days and/or PTO annually, and retirement plan details.
If you require any additional information, please feel free to contact me at (your phone number).
Sincerely,
Your Name
How to Request Verification of Employment
If you’re in the process of making a new hire, you should verify your final candidates’ employment. We recommend requesting verification before or after the final interview stage so you don’t spend time verifying prospective employees that you would have eliminated.
Choose whether you want to receive employment verification letters or call previous employers instead. If you’re unable to get in touch with a previous employer, you can ask the applicant to make an introduction or connection for you.
You can also use a background check service or employment verification services, but they usually charge a fee.
Keep your hiring process compliant by exploring Hourly HR Support Services.
Ready to transform your business into a profit-pumping machine? Learn how with our monthly newsletter.
