Building a team is more than handing over an offer letter to a job candidate you’re interested in hiring. In order to hire a strong team of employees, HR departments and business owners have to spend a significant amount of time parsing through job applications to find candidates to interview. From there, HR teams often send employment verification requests to a job applicant’s previous employers to uncover additional information, such as work history and job title. Business owners and HR teams aren’t the only people who may issue a request for employment verification. Government entities, loan providers and landlords are other examples of entities that may issue an employment verification request.
So, do I have to respond to employment verification requests? This is a common question many business owners or HR personnel may ask themselves, and the answer is — it depends. In this guide, we’ll walk you through everything you need to know about employment verification requests, including what they are, when to respond, legal requirements and more.
Employment verification is the process employers, financial institutions, government agencies and landlords take to confirm an employee’s, tenant’s or borrower’s employment history, including their job title, dates of employment, salary or hourly rate and additional work information. Verifying an employee’s work history can help landlords, lenders and employers ensure an applicant is providing accurate information regarding their employment history. For the employment verification process to work, these entities send employment verification requests to an employee or applicant’s current or former employers to determine their eligibility for a loan, housing, employment or other benefits.
A request for employment verification can be carried out through a verbal or written request of an individual being verified. These requests can be sent to a current or former employer, and these employers should only provide accurate and supportive information.
With that said, do I have to respond to employment verification requests? If the employment verification request comes from a government agency, whether at the state or federal level, you often must remain compliant and respond to the request. Failing to do so can result in penalties or fines that can harm your business. However, if a request for employment verification comes from another party, such as an employer, landlord or mortgage lender, there aren’t laws and regulations that require employers to respond to an employment verification request. Not responding can negatively affect your business, such as a lack of trust with employees and other companies in your industry.
The Importance of Responding
You might wonder whether you need to respond if you receive an employment verification request. While in some cases, you might be legally required to respond, and in others, you’re not, responding to all requests for employment verification can come with a host of benefits. Here are some of the reasons why it’s important to respond to employment verification requests:
- Legal compliance: Perhaps the most important reason to respond to employment verification requests is to remain legally compliant. In many cases, it’s mandatory to respond to requests for employment verification from a government agency at the federal and state levels. Failing to comply with these laws can result in legal action, fines and expensive penalties.
- Builds trust: Responding to employment verification requests in a timely manner is also a great way to build trust. For example, if you have a current employee looking to apply for a loan or an apartment, providing accurate information quickly can help them get approved faster. This will allow you to build trust with your employees, resulting in a positive workplace environment. Additionally, it can be a great way to build trust with other employers and organizations that rely on employment verification information.
- Fraud protection: Another reason to respond to a request for employment verification is to help other entities protect themselves against fraud, as it allows them to reach out to your organization to confirm a current or previous employee provided accurate employment information.
- Eligibility verification: Responding to employment verification requests can also help organizations verify the eligibility of applicants by assessing their work history when they apply for another job, credit, housing or loan.
While responding to employment verification requests isn’t always required, doing so can be an excellent way for your business to establish itself as a trustworthy and reputable company.
Legal Requirements for Responding
If you receive a request for employment verification, it’s important to fully understand the legal requirements before handing over sensitive employee information. There are several federal laws all employers must abide by, as well as a wide range of state laws that can vary depending on the state where your business operates. Take a look at some of the common legal requirements centered around responding to employment verification requests:
- Fair Credit Reporting Act (FCRA): One of the most important federal laws to abide by when responding to employment verification requests is the Fair Credit Reporting Act. Established in 1971, the FCRA was enacted to ensure the privacy and fairness of personal information collected by credit reporting agencies. A primary regulation under the FCRA that employers must follow is obtaining written consent from employees before releasing employment verification information to other parties, such as a financial institution or potential employer. Additionally, employers must ensure the information provided is accurate and notify the employee if any adverse employment action needs to be taken based on the information released by the consumer reporting agency.
- Title VII of the Civil Rights Act of 1964: One section of the Civil Rights Act of 1964 helps protect employees from employment discrimination based on race, religion, color, sex or national origin. If an employer shares any of this information during an employment verification request, they must also share it with the employee. Employees who claim they were discriminated against based on race, religion, color, sex or national origin can file a lawsuit with the Equal Employment Opportunity Commission.
- Americans with Disabilities Act: Another federal law that protects employees from discrimination is the Americans with Disabilities Act, which prohibits employers from discriminating against individuals due to disabilities. It’s a general best practice not to provide information based on an employee’s disability status, race, religion, color, sex or national origin during the employment verification process.
- State laws: In addition to the aforementioned federal employment verification laws, you may need to comply with a wide range of state and local employment verification laws. For example, California and New York City prohibit employers from requesting salary information when hiring to prevent them from setting salary limits based on an applicant’s financial standing.
- Internal policies: In addition to federal, state and local employment verification laws, organizations may have their own internal policies centered around employment verification. For example, some companies may have a strict policy of not providing references, including responding to employment verification requests, to ensure security and reduce risk.
As an employer, staying informed on the legal requirements centered around responding to employment verification requests is crucial. Doing so can help you stay compliant and remain in good standing with employees and other organizations.
If you receive a request for employment verification, you may wonder about information an employer, landlord, financial institution or another third party can request. While the information requested can vary depending on the purpose of the request, there are common pieces of information you might be asked to provide, such as the following:
- Dates of employment: A common piece of information companies can ask for are the dates of an individual’s employment, including when they were hired and when their employment ended.
- Salary or wage information: For many parties, salary or wage information is essential, especially for financial institutions and landlords who need to assess whether an applicant has a steady stream of income to pay for rent or their loan. This can include salary or hourly wage information and their current or previous pay rate.
- Job title: Some companies may request information regarding an individual’s job title or position and any other job titles or positions they’ve held.
- Employment status: Another piece of information companies may seek is employment status, such as whether the individual was a contractor, temporary worker, part-time worker or salaried employee.
- Performance information: Depending on the purpose of the request, you might be asked to provide performance information. However, this is often less common and many employers may seek an employee’s consent before divulging this information.
- Reason for leaving: Companies can also ask for information about the individual’s reason for leaving the company, whether due to termination, lay off or quitting. Similarly, some organizations might be reluctant to provide this information due to privacy concerns.
As stated, unless legally required by a state or federal government agency, you do not need to respond to an employment verification request. Additionally, you also have the option to choose which information you provide depending on your internal policies.
When receiving a request for employment verification, there are several best practices you can follow, including:
- Obtain written consent: To remain compliant with the FCRA, employers should obtain written permission from employees before their employment information is given to a third party to protect their privacy rights.
- Respond in a timely manner: It’s always important to respond to employment verification requests quickly while remaining accurate and compliant to ensure the requesting party can make decisions promptly and the current or former employee can determine their eligibility for credit, housing or employment.
- Verify the requesting party’s identity: Before providing employment information on a current or former employee, it’s important to ensure you’re handing it over to a responsible party. Doing so can help prevent fraud and ensure the individual’s information is protected and given to the correct recipient.
- Only provide relevant information: It’s best to give a limited amount of information needed to verify an employee’s employment information and not to provide information centered around race, religion, sex, national origin, ethnicity, disability status, financial information or criminal history.
- Protect employee privacy: In order to maintain a strong reputation and build trust within your company, it’s essential to protect employee privacy and to have systems in place that dictate who can handle employment verification requests.
- Provide accurate information: Another best practice when responding to a request for employment verification is to always provide accurate and truthful information, as failing to do so can result in legal liability.
- Maintain records: Maintaining records and a paper trail can help provide protection against legal claims centered around employment verification requests and responses.
By following these best practices, you can protect your employee’s privacy, remain compliant and build a strong reputation as a responsible employer.
What to Do When You Receive a Request
If you receive an employment verification request, there are a few steps to take to ensure the employment verification process goes smoothly. These steps go as follows:
- Verify the requesting party’s identity: To start, verify the requestor’s identity to prevent fraud and ensure information goes to the right people.
- Obtain consent: Before providing employment information to another party, like a financial institution, receive written permission from an employee to comply with the FCRA and protect their privacy.
- Provide accurate information: After consent is received, ensure the information you provide is accurate to avoid legal liabilities.
- Respond quickly: Respond to employment verification requests in a timely manner to help the other parties make informed decisions.
- Keep records: Make sure to maintain records to remain compliant with legal requirements and protect your company from legal liabilities.
What if You Fail to Respond to Employment Verification Requests?
If you’re wondering, “do I have to respond to employment verification requests?” you might be curious about what happens if you don’t. In most cases, responding to employment verification requests from other organizations like financial institutions or landlords is not legally required. With that said, you can miss out on business opportunities and cause distrust with employees seeking verification. However, failing to respond to an employment verification request from a local, state or federal agency can result in legal liabilities, such as fines and penalties, which can hurt your business.
If you’re looking for verification fulfillment services, look no further than Experian Employer Services. We have a wide range of employer services products to help your organization streamline operations to improve employee satisfaction and your bottom line. Contact us today to see how our workforce management solutions can help you throughout the employment verification process and beyond.