Employment verification best practices are essential for businesses handling employment verification inquiries. These inquiries are a standard aspect of business and financial dealings.
Employment Verification: Employer Obligations and Limitations:
Banks, landlords, government offices, Potential employers inquire about employment status, compensation, or work history, but federal law does not require employers to respond, but most do so as a matter of professional courtesy to their current or former staff.
But state law, company policy, or contractual agreements may specify whether and how the employer is obligated to respond. Certain states have laws that specify certain employment information employers must offer, especially upon request by a government agency or in child support or wage garnishment cases.
What Can Be Disclosed?
The employer should weigh disclosure against secrecy while replying to verification inquiries. Information that may normally be provided is:
- Title of job and dates of work (start date and end date)
- Status of employment (if the person is working or not)
- Salary information, but with the written approval of the employee
- Location of work (where appropriate to the request)
In the majority of instances, employers steer clear of providing subjective information like performance reports, grounds for dismissal, or disciplinary action records. Release of such information may trigger legal action, including defamation suits if the released worker feels that the information was false or unfavorable.
Risks and Legal Issues
Although answering verification requests is normally simple, employers have to be careful not to fall into some potential legal and ethical traps. These include:
- Privacy invasions: Revealing personal data more than is required can cause legal problems under privacy legislation.
- Defamation claims: If an employer gives adverse or inaccurate information, it may lead to a defamation action.
- FCRA compliance: If employment verification is included in a credit check or loan application process, employers are required to be in compliance with the Fair Credit Reporting Act (FCRA).
Some companies adopt a neutral reference policy, verifying only job titles and employment dates to mitigate risks.
Best Employer Practices
Employment verification best practices help employers remain compliant and professional when responding to verification requests. The best approaches include:
- Creating an enterprise-wide policy that explains what can and cannot be divulged
- Requiring written approval from the employee before releasing salary or sensitive information
- Assigning a dedicated HR or legal contact to manage verification requests
- Maintaining records of all verification requests and responses for legal purposes
By following employment verification best practices, employers can complete verification requests responsibly while protecting employee privacy and company interests.
