7 Ways to Formalize Your Employment Verification Process

Share on email
Share on twitter
Share on linkedin

From hand sanitizer to cosmetic dentistry, the pandemic has caused a surge in demand for things that most would not have predicted. Employment verification requests fall into this category. The sharp increase in the number of verification requests is shining a spotlight on the process, as each additional request consumes a portion of an HR professional’s time to perform a non-strategic task. Every employment verification request also represents a small amount of risk that someone might divulge information that violates the law or that unintentionally harms an employee.

For these reasons, companies that had given little thought to employment verification in the past are now taking a closer look to determine the best way to handle requests and deal with the increased demand. Outsourcing makes sense for many organizations because it takes away a non-strategic task and isolates the risk. It’s also often self-funding through fees that the requesting organizations pay. For those who decide not to outsource or who are evaluating their options, it’s probably a good time to put the process details down on paper. Here are seven steps you can take to formalize your employment verification process internally.

1. Identify Employment Verification Contact or Department

An employment verification request could be sent to a department manager, the HR department, or the company’s main address — without any contact name attached. So many different destinations could result in delays, security risks, and more. It’s important for everyone to understand that they should forward all verification requests to a specific internal contact or department, and they should not respond even if they know the answers to the questions.

2. Categorize Requests

You can usually separate an employment verification request into a category based on whom the request comes from:

  1. Lenders and landlords
  2. Debt collectors
  3. Prospective employers
  4. Government agencies
  5. Other

Requests might be written or verbal.

3. Determine Which Requests You Answer

By law, you are only obligated to answer requests from government agencies. Anything else you do is purely voluntary. However, some requests are necessary for strong employee relations because they are extremely important to employees and their personal lives, such as requests from lenders about a mortgage or from landlords about an apartment. These requests also tend to have an immediate deadline and need attention right away.

You should also decide whether you will answer verbal requests since you might not be able to verify that you’re actually speaking to the person the caller claims to be. If you don’t respond, however, you might hold up an employee’s mortgage approval, as the last step in the approval process is often to re-verify employment verbally.

Requests from prospective employers are governed by a different set of state laws and should be considered separately from other requests.

4. Decide What Information to Provide

Different organizations will ask for different information, and there is no standard request format. Most requestors will ask for dates of employment and job titles. Some will ask for the final salary, rehire eligibility, and reason for termination. Others might ask about guaranteed payments or bonuses to be paid in the future.

Information that is subjective such as termination reason, rehire eligibility, or probability of continued employment is at your discretion. While most states protect you if you answer truthfully and in good faith, these questions still carry some liability.

Since you would be speculating with answers to questions about events that might happen in the future, it’s probably best not to guess at anything and only provide factual information about what’s true today. For example, TCC recommends never releasing the following information:

  • Guaranteed future employment
  • Guaranteed future payments
  • Anything related to HIPAA violations regarding Leave of Absence reasons, dates, etc.

 

5. Get Employee Permission

The requesting organization should have provided you with written permission from the employee to ask you the employment verification questions. It’s also a good idea for you to get written permission from an employee before releasing any information. If you will accept verbal permission from an employee in special cases, clearly identify what qualifies as a special case.

You can use permission as a way to delegate responsibility for all non-government requests to employees. If the employee anticipates that you will receive an employment verification request due to a loan application or a new apartment, it’s their responsibility to alert you and provide written permission. All other requests will be ignored, except requests from prospective employers. However, it’s conceivable that some employees simply won’t know what to do when they apply for a mortgage or won’t be proactive enough when they are trying to get a new apartment. You might have to raise the issue with an employee for requests that appear to be important.

When an employee terminates, some companies obtain permission to release employment verification information as part of the exit paperwork.

6. Be Consistent

If you can, designate an individual as the primary contact that fulfills most requests to help ensure consistency. Provide sufficient training on your process and its rules as well as another resource to help with difficult decisions.

Follow the same process for every employee, regardless of who it is. Try not to make any exceptions for individuals. Treating every employee the same way helps you avoid discrimination. When you start making exceptions here and there, you’re potentially exposing yourself to unnecessary liability.

7. Document and Communicate a Formal Policy

When you document your decisions in a formal policy, it makes it easier for you to apply the same rules to everyone, and it makes it easier for employees to understand their responsibilities. A formal policy also enables you to manage expectations about how quickly you respond to requests and what kind of employee permission you must have prior to making any disclosure.

When employment verification requests become more than an occasional task for someone and more like a part of their job, that’s an indication that it’s time to document the entire process. You might want to assemble a small team that includes a representative from your legal department to document the decisions and create a draft policy. Once the policy is in place, make sure you adequately document each time you fulfill a request in case you are challenged about the information provided.

And, remember, if all of this sounds like too much, you always have the option to outsource to a qualified employment verification vendor. If you want to keep things internal, following these seven steps will help you maximize efficiency, minimize risk, and ensure employment verifications go as smoothly as possible.

More Tax Credit Insights

How Fitness Centers Can Take Advantage of the Employee Retention Credit (ERC)

Free assessment

Talk To a Tax Credit Expert Today

Connect with a partner relationship manager to explore our turn-key solutions and integrations.

Get a free assessment