What Is Employment Verification?

What is an employment verification background check?

Employment verification is a standard part of a preemployment background check. This step of the hiring process focuses on determining if there are any inconsistencies between the information a candidate provides and their actual employment history. 

“You’re focusing in on whether the person is qualified for the job which you’re hiring them for, and so part of that is you’re making sure that they have the skills and qualifications necessary for the position,” said Susan Corcoran, an employment attorney with Jackson Lewis P.C. “And that needs to match up with where they obtained the skills and qualifications.”

During this process, either a member of your human resources (HR) team or a third-party background check provider will contact some of the most relevant employers the candidate lists on their resume to confirm their previous employment, titles and dates of employment.

What is the difference between employment verifications and reference checks?

It is common to hear the terms “reference check” and “employment verification” used interchangeably. Although there may be some overlap, there are key differences.

Employment verification is the process of confirming the factual information on a candidate’s resume, such as their employers, job titles and dates of employment.

A reference check is when prospective employers contact the references of candidates they are considering hiring. These can be professional references — including former employers, bosses or colleagues — and personal references, such as friends. Because candidates select their own references, a reference check serves only as a sniff test and should be only one piece of a comprehensive assessment of the candidate.

Unlike employment verification, which confirms objective information, reference checks may be subjective. 

“A reference check really asks deeper questions,” Kristen Faris, senior vice president of customer success, solutions and partnership at Checkr, told us. “All employers ask different types of questions, and they can vary around this like, ‘Talk to me about how the employee performed,’ or ‘What were some of their strengths or weaknesses?’ or ‘How did they collaborate with others?’ They’re more qualitative-type questions, where[as] employment verification is very quantitative, I would say.”

What information should be sought during employment verifications?

You should seek to obtain as much information as possible during an employment verification. However, many employers are willing to provide only a “neutral reference,” which typically states only whether a person was employed at the organization, their title and the dates of employment, Corcoran said.

“The concern is the risk of a claim against them if they say something negative and that causes the person not to obtain the new position,” Corcoran added, “so the potential for what’s referred to as a defamation claim. And I’m saying that generally because there are defenses, but, you know, generally, they’re concerned about liability.”

Here are some of the types of basic information you should seek during an employment verification:

• Whether the person was in fact employed at the organization
• Dates or length of employment
• Job titles and time spent at each position within the company

You can also ask more detailed questions, but be aware that employers may not provide the answers because of concerns over business lawsuits. For example, you may ask questions about the following topics:

• Overall employee performance
• Reason for termination or separation
• Job-related knowledge, qualifications and skills
• Safety or behavioral violations, if any
• Other work-related information
• Eligibility for rehire

If an employer is unwilling to provide more detailed information, don’t press the subject. You can always learn more about an employee’s previous job performance during the reference check process. 

How do you conduct an employment verification background check?

To conduct an employment verification background check, start by preparing a few targeted questions. Plan to be brief and respectful to get the most information. Before you call, refer to a candidate’s resume and any notes you took during the interview process.

When you contact a candidate’s former employer, follow these steps:

1. Refer to your list of questions. Ask your questions in a professional yet conversational manner that makes it pleasant for the person you are speaking with.
2. Ask if the candidate is eligible for rehire. The answer to this question can provide much insight, but only some employers will be willing to tell you. However, you should always ask anyway.
3. Say “thank you.” Always be professional, and thank the person for their time and effort. After all, you may need to call the same reference in the future regarding other applicants. Additionally, this may be the first time other professionals hear about your company and its brand and you always want to make a good impression.

Another option is to hire a background check service to conduct employment verifications for you. Typically, this is an added step during a complete background screening, which also includes a criminal history check, identity check and, frequently, education verification. Background check providers can also conduct reference checks for you.

These services typically cost $30 to $100 per candidate. If you plan to include employment verifications in your screening package, you should expect to pay on the higher side of that range. These services usually return results within a few days. Typically, the results are available in an online portal for easy reference.

Choosing whether to outsource employment verification checks “depends on your bandwidth as a hiring manager or as an HR team,” Faris said. “If you’re doing these in high volume, then outsourcing makes a ton of sense. But my personal opinion is that hiring managers should always do their own reference checking.”

What are employment verification laws?

Although employment verification can be a valuable step in your hiring process, it’s important to note certain legal limitations and guidelines that may apply.

Fair Credit Reporting Act (FCRA)

If you use a third party to conduct an employment verification background check — or any other kind of preemployment background screening, including a criminal background check — you must abide by the Fair Credit Reporting Act (FCRA). Essentially, this means that if your organization utilizes a third-party background check company for preemployment screenings, you must receive written consent from candidates before running a background check. The notification provided to the applicant, which they should sign, must include the contact information of the company conducting the background screening.

If the background screening results yield unfavorable information that causes you to drop the applicant from the hiring process, you must complete the adverse action process first. Adverse action involves giving the applicant a written notice of the consumer report and a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act.” You must also tell the applicant directly — electronically, orally or in writing — that they were rejected because of the background check information results. 

The applicant then has the option to review and explain the report. You should be sure that this notification process complies with the FCRA and any potential state and local employment laws, Corcoran said.

Title VII of the Civil Rights Act of 1964 (Title VII)

Title VII prohibits employment discrimination on the basis of race, color, religion, sex and national origin. This includes discrimination in the employment verification process. Employers must verify the employment information of their employees and job candidates in a way that does not discriminate against individuals based on these protected characteristics. For example, employers cannot request different employment information from employees or job candidates based on race, color, religion, sex or national origin.

This federal law applies regardless of whether you use a third-party service to conduct your background screening, Corcoran said.

What is the importance of verifying employment history in the hiring process?

When you think you’ve found a stellar candidate, it can be tempting to offer the job as soon as possible, without confirming the details of their employment history. However, employment verification checks are essential to the candidate-vetting process and should not be skipped. An employment verification ensures that the person you are hiring is not only suitable for the job but also an excellent cultural fit.

Here are some of the key reasons you should conduct employment verifications.

1. It verifies important facts.

ResumeLab found that 37 percent of people lie frequently on their resume, and another 33 percent reported lying once or twice on their resume. Fifty-two percent of people said they embellished their position’s responsibilities, 37 percent lied about the amount of time employed and 24 percent said they made up the position entirely. 

You need to make sure that candidates are being truthful about where they worked and what positions they had so you know they have the necessary experience for the role. A thorough employment verification can help you discover which candidates are honest and which are stretching the truth.

“People lie on their job applications all the time, and an employment verification can help to uncover that,” Faris said. “Often, people will also try to obfuscate gaps in their employment by lying about their dates of employment.”

2. It checks culture alignment.

Part of hiring the right candidates is checking whether they are a good fit for not only the role but also the organization. Employment verifications can provide a peek into another company’s culture as you learn about the candidate from their former supervisor or HR representative. [Read related article: Why It’s Important New Hires Fit a Company’s Culture]

3. It may explain short employment stints.

An employment verification can confirm why a candidate was at their previous employer for only a brief period. Sure, you can ask the candidate in the interview, but confirming that the company indeed cut positions, relocated or eliminated the role is essential. Remember, however, that an employer may not always be willing to provide this information.

4. It can help guide compensation decisions.

Sometimes, a job applicant may exaggerate the responsibilities or role they had at a particular organization. For example, a prospective employee might indicate their previous position was a managerial one, even though it wasn’t. That’s one reason employment verification is important, especially when it comes to employee compensation decisions.

“When you’re thinking about bringing individuals into your organization … and you want to make sure that your leveling and compensation are consistent across employees, understanding the level that the employee was working at previously and validating that is really helpful in making informed compensation decisions,” Faris said.

5. It offers more context for other kinds of background checks.

Confirming a candidate’s employment history can act as one piece in the overall picture of information when you’re conducting multiple kinds of background checks, including criminal background checks. For example, employers are often required to weigh multiple factors in their hiring decisions for candidates with criminal histories, including whether the nature of the offense was related to the position and whether other qualifying factors would outweigh, for example, a minor shoplifting conviction.

“Employment history may be very important in its connection to the criminal history check,” Corcoran said. “If a conviction does come back and we’re considering mitigating circumstances, then one of those mitigating circumstances is going to be the fact that someone had a strong employment history.”

What should I do if the employment verification turns up false or misleading information?

If you’re using a third-party service to conduct an employment verification and it turns up false or misleading information, you’re required to follow FCRA rules for notifying the employee about the discrepancies, allowing them an opportunity to dispute or explain the information, and notifying them if the information led you to decide against employing them. Ensure that you are using an FCRA-compliant vendor that can handle this notification process for you. 

However, even if you’re conducting the employment verification process on your own, you can still afford the potential employee the opportunity to explain themselves, Corcoran said. She recommended contacting an employment attorney if you’re unsure what to do. 

“If issues come up that might give an employer pause to hire a particular individual, and where there might be potential legal issues around denying someone employment — so, they can’t confirm the information that was provided to them, or it comes back as a falsification — that might be a potential situation where they would want to reach out to an employment attorney,” Corcoran explained.

Erin Donaghue and Skye Schooley contributed to this article.