According to cnbc.com, 78% of employees lie during the hiring process. Many of these falsehoods are on resumes. Since it is not illegal to lie on a resume, most companies use some form of employment verification to ensure the accuracy of a candidate’s work history. On the other hand, employers must comply with legal requirements when providing employment information on current or past employees.
Verification of employment (VOE) requests can come from a number of sources:
- Government agencies
- Collection Agencies
- New employers
In most instances, they are looking for information on employment dates, wages, and the potential of continued employment. Potential employers may ask for the reason for termination and the possibility of rehiring.
What Information Should Be Provided?
Information requests fall into two groups:
- Employment Verification
- Income Verification
Each state has rules governing the information that can be released. For example, some states such as California and New York prohibit employers from releasing salary information to potential employers. The best option is to ask employees to sign a consent to release information form before releasing employee-specific data.
Federal law prohibits discrimination based on race, religion, color, sex, gender identity, age, disability, nation of origin, or genetic profile. It’s essential that an organization have well-defined policies regarding VOE information to avoid possible violations.
Potential employers want to verify that an employee worked at the companies listed in their work history. Typical VOE requests ask for the following:
- Employee Name
- Employee Job Title
- Employment Dates
- Employer’s Address
In some cases, they may ask about job responsibilities or performance. Answering these questions during the hiring process can prove problematic. It is recommended that employers only provide additional information after consulting with legal experts.
States vary on whether salary information can be provided during the hiring process. Be sure to check with state regulations before releasing wage or salary information. Employees may want employers to release income information as part of loan application processing. Government agencies may need information if employees or former employees are applying for assistance. Consider establishing a policy that requires employees to provide written consent to release income information.
Circumstances that may require the release of income data may include:
- Loan Approvals: Buying or refinancing a home requires income data to ensure that the loan terms can be met.
- Credit Applications: Granting a person’s credit request depends on credit score as well as the ability to repay.
- Garnishment: If an employee receives a court-ordered garnishment such as child support or back taxes, income information will be required to determine the amount of the garnishment.
- Lease Agreements: Property managers may require verification of income to ensure the tenants can manage monthly payments.
Before releasing information, check with the employee.
When Should Information Be Provided?
The only time an employer must comply with a VOE request is when it comes from a government agency. These requests will often be very specific and include a reference to a legal statute supporting the request. The request should also have a comply-by-date. If it does not, contact the issuing agency for clarification, although it is always advisable to respond to a government request as quickly as possible.
Government agencies may need to verify income to determine child support or alimony payments. They may request information to help with possible identity theft or confirm fraudulent use of government funds or services. As long as the information is accurate and given in good faith, an employer should not suffer any adverse effects.
Employers are under no obligation to release information to lenders or other private companies. However, withholding that information places employees at a disadvantage. With the number of attempts to steal identities, employers may want to require that employees notify them of potential requests. Providing employees with a form to date and sign is an easy way to receive notification and signed consent for the release of information.
If contacted by a prospective employer, a current or former company should provide the basic information for employment verification. Any information beyond the basic should only be provided with the signed consent of the employee. In some instances, additional information may be needed for individuals working in industries such as education or health care. Be sure to check with local authorities for guidance.
Requests from third parties such as collection agencies should be ignored; however, employers should check with legal authorities to prepare a policy for handling requests by a third party.
When Should Health and Disability Data Be Provided?
All information regarding an employee’s health or disability status is protected by law.
- The Americans with Disabilities Act of 1990 makes it illegal to discriminate based on a disability.
- The Health Insurance Portability and Accountability Act of 1996 protects a person’s health information from release to unauthorized individuals.
Information related to an employee’s health or disability should never be released without consent. When to Get Help?
As a small employer, you may have a few routine VOE requests in a year — maybe every two or three years. For larger organizations, the number of VOE requests can be significant, especially in times of high unemployment or a booming housing market. Given the amount of processing time involved, the cost of in-house VOE can run into the thousands.
It’s not just the direct cost of an individual’s time but also the opportunity cost resulting from the person focusing on VOE responses rather than a solution with more impact on the bottom line. If you’re interested in seeing how much Quentelle’s solution can save you, check out our savings calculator. Then, contact us to schedule a demo.