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Updated Nov 02, 2023

What Is Employment Verification?

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Patrick Proctor, Senior Writer & Expert on Business Operations

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Employment verifications serve an important role in the hiring process by confirming that candidates have the right work experience for the job. By conducting an employment verification, you can identify false employment claims, explain gaps in employment and even get insight into whether the applicant will be a good fit for your organization. 

Read on to learn why employment verification is valuable, how to conduct an employment verification and what questions to ask.

Editor’s note: Looking for the right background check service for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

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.

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 information should be sought during employment verifications?

You should seek to obtain as much information as possible during an employment verification. However, sometimes, you will receive private information, such as medical history, that could introduce legal risks. To prevent lawsuits, it’s helpful for an HR professional or third-party provider to perform this step. Here are some of the types of information you should seek during an employment verification:

  • Dates/length of employment
  • Job titles and time spent at each position within the company
  • Overall job 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

How do you conduct an employment verification background check?

To conduct an employment verification background check, start by preparing a few targeted questions and 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:

  • Refer to your list of questions: Ask your questions in a professional yet conversational manner that makes it pleasant for the person you speak with.
  • 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.
  • Say “thank you”: Always be professional and thank the person for the 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.

Use background check services

Another option is to hire a top 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.

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 confirming the factual information on a candidate’s resume, such as 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. For example, you may ask the following questions: What was it like to work with the candidate? What are their strengths? Why would the candidate be a good fit for this position?

TipBottom line

Both employment verifications and reference checks are effective tools. However, if you perform only one type of background check, choose employment verification as it is essential for an employer to corroborate the information that a candidate has shared in their resume, cover letter and interviews.

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 conduct employment verifications as a part of a criminal background check, you must abide by the Fair Credit Reporting Act. 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.

Health Insurance Portability and Accountability Act of 1996 (HIPAA)

A preemployment verification may reveal health or disability information that is protected under HIPAA. You are legally not allowed to share this information with others.

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.

FYIDid you know

When training your staff on employment discrimination laws and guidelines, educate them on unconscious biases as well.

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 36 percent of people have lied on their resume. Some of the most common things people lie about are job experience (25 percent), job duties (21 percent) and employment dates (16 percent). 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.

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. [Related article: Why It’s Important New Hires Fit a Company’s Culture]

3. It explains 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.

4. It ensures workplace safety.

It’s paramount to ensure you do not negligently hire someone with previous safety-related issues. If for no other reason, employment verification checks are worth the time spent to confirm you’re not exposing your company and existing employees to risks and liability.

Did You Know?Did you know

Occupational Safety and Health Administration legally requires employers to guarantee employees a safe workplace. Employment verifications can help identify potentially hazardous workers before they become a liability for you.

Employment verification FAQs

If you want to conduct an employment verification for free, you must do it yourself. This involves contacting each former employer to verify employment information. While this is a viable option, you need to pay special attention to ensure you don’t violate employment laws. You also have the option to pay an FCRA-compliant background check service to run the reports for you. Although using an employment screening service takes extra time and money, it is the best way to ensure you run legally compliant employment checks on applicants and employees.

Yes, most employers run some form of preemployment background check on job applicants, with 62 percent confirming past employment specifically, according to CareerBuilder.

No, you can’t pass employment verification fees onto a job applicant. An employer is responsible for paying applicable background check service fees if they choose to use third-party verification services.

Skye Schooley contributed to this article.

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Patrick Proctor, Senior Writer & Expert on Business Operations
Patrick Proctor is a human resources and people operations expert with SHRM-SCP certification and an MBA in business management. He has spent nearly 20 years leading HR for organizations of varying sizes, some international. He advises on regulatory compliance, workforce management, aligning strategic business objectives with human capital initiatives and more. Proctor is passionate about helping businesses establish employee-centric workplace cultures that increase team member satisfaction while also maintaining cost efficiency and improving ROI. He also enjoys integrating distributed teams and developing the next generation of leadership. He has written about workplace issues for publications like Entrepreneur and sits on the boards of advisors for people management company ChangeEngine and UC Santa Barbara's Professional and Continuing Education program.
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