How Do I Provide Verification of Employment? - The Full Guide
As a business owner, you will probably have come across a situation in which verification of employment is required. Whether you are hiring a new employee, or a previous or even current employee sends you a request, it is important to know what exactly is required, and how you can provide verification of employment.
In this article, we will cover everything from what exactly employment verification is, to how and why you may need to request or provide it in the process of running your business.
What is Employment Verification?
Let's start with the basics, what is employment verification? In the most basic terms, it is the process of verifying an individual’s current or previous employment. Employment verification can confirm previous employment, reveal false employment claims, and identify fabricated job titles. This can be useful in many different circumstances.
Also read: How to Engage Employees
Verification for hiring
The most common reason for providing or requesting verification of employment is hiring a new employee. While a resume is very useful in finding out whether a candidate possesses the relevant skills, experience, and qualifications, it doesn’t confirm their experience by itself.
Verification of employment allows a company to confirm that the prospective employee has been truthful in their reported employment history. It can also be useful in the process of extending an offer to a new hire. When offering a salary to a new employee it is common to take into consideration their previous salary. It is important to verify the veracity of the stated previous salary to ensure you are providing a fair salary offer.
Verification for loans
One reason for a verification of employment request to come through for a current employee is if they are applying for a loan. Many loan providers require proof of employment or income before offering a loan to an individual, this applies to bank loans, mortgages, credit cards, and car finance.
A loan provider is only interested in an applicant’s current employment and will likely want to verify that they work for your business, what their salary is, and whether they are on a temporary or permanent contract.
With this type of employment verification, verbal communication is the most common requirement, however, some providers may also request that written confirmation be sent via fax or email. It is important that you check with the employee in question that they have actually applied for the loan before releasing any employment information.
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Verification for leases
When an employee is entering a new lease the landlord will be keen to verify employment status and salary information to ensure that the rent will be met each month. This can be done via verification of employment requests. Again, it is important to verify with your employee that the request is genuine.
Verification for visas or green cards
A final reason for requests for employment verification comes from visa holders providing proof of their employment status. If an individual is in the country on a working visa, they will need to provide proof of their employment to ensure they qualify for the extended duration of their visa.
Verification of employment Legalities
There is no legal requirement for an employer to respond to requests for employment verification provided that they do not come from the federal government. In such scenarios failure to comply with the request may result in fines and lost contracts depending on the nature of your business.
During verification of employment, a prospective employer may ask about a candidate's ability to perform in their role. General information about whether the individual can carry out tasks such as heavy lifting is fine, however, any medical information should not be shared with the new employer.
There are certain states in the US in which salary requests are not allowed to be made, it is important to check the laws in your state.
If your state does allow disclosure of salary information, confirm with your employee that the request is genuine and necessary before disclosing information.
If you have a former employee with whom your relationship ended poorly, it is important to ensure that you only provide information that is pertinent to the request.
The information that you provide has to be truthful and factual, in extreme cases, an ex-employee may sue for defamation if they believe false information was provided during the request.
Also read: 7 Employee Benefits and Compensation Ideas
Methods of verification
There are a few ways in which employment verification can be provided for any of the reasons listed above.
A common way to provide verification of employment is through references or reference calls. In this scenario, you will receive a phone call or email requesting acknowledgment of employment with your business as well as information about your experience of the individual as an employee.
Employment verification letter
The most common proof of employment is via an employment verification letter. The letter should include the employee’s job title, dates of employment, and salary. Depending on the reason for the employment verification request, you may want to include a list of responsibilities your employee had as a form of reference.
If the employment verification request is primarily focused on income or salary, pay stubs may be a sufficient response. In general, 3 months' worth of pay stubs should be enough to provide adequate proof of employment and income.
If time is an important factor in a verification of employment request, and a full proof of employment letter is not feasible, a signed and executed contract may suffice as employment verification.
This is less detailed than a proof of employment letter but contains all the important information to prove employment.
Also read: Give Feedback To Employees
Verification of employment may be necessary for a multitude of reasons, and the way in which information is provided often depends on the reason for the request. Remember to always verify with an employee or former employee whether the request is genuine and necessary before disclosing information.