Verification of employment refers to the process that banks and mortgage lenders in the United States use in order to review the employment history of a borrower to determine their job stability and, as such, their income history. This helps them to verify whether or not borrowers are eligible for loans.
That said, verification of employment requests might also come from government agencies, collection agents, prospective employers and other parties who need to verify someone's employment for one reason or another.
Providing employment verification
You typically have to verify your employment if you're applying for a loan. This might be a loan for a new home, a car or a business. The bank or mortgage lender wants to make sure that you have an income (and a history of an income) so that you'll be able to pay off your debts to them.
If the verification of employment request comes from a collection agency, this may be because you owe money to someone that you have neglected to pay. The agency wants to prove that you have an income so that you can, indeed, pay the amount that you owe.
Meanwhile, prospective employers might want to verify your employment to assure that you have no lied on your resume. They may also want more information on your former job roles and general salary information (though it's illegal to ask for salary history) in order to get a better idea of your qualifications and ultimate worth.
"Verification of past employment is an essential part of applicant screening, and many prospective employers prefer to do this using a letter rather than over the phone," according to Upcounsel. "It’s important to ensure that prospective employees have given you accurate information. Human resources professionals will tell you that many people inflate their background and salaries in seeking new employment. While there are other sources of employee references, like reference letters they supply or include on their LinkedIn profiles, there are risks to relying on these alone. Reference letters can be faked, and recently there have been situations of applicants falsifying LinkedIn references by having friends create them or even making up fake profiles to create them themselves."
Having a verification of employment letter, then, adds another layer of screening for prospective employers.
An employee might even want to have a verification of employment letter on hand, so they request one themselves.
Whatever the case, you provide your employment verification via employment verification letters.
An employment verification letter simply confirms the person in question's employment status in response to a request for information from one of the aforementioned parties — a bank, a lender, a collection agency, the government, a prospective employer, etc.
A company must have the employment verification letter typed up on a piece of stationery, or the person writing the letter can also choose to fill out a standard employment verification form that includes the company's name and logo. Likewise, an employee can go to their company to ask for authorization of an employment verification letter that they've typed up themselves (but it's more likely that the former or current employer will prefer to write the letter than have the employee or former employee write it).
"When an employee requests an employment verification letter it’s important to handle the process professionally," according to Upcounsel. "If the company has a human resources department, that is where the request should be directed. If you are a current employee, check with your human resources department about the process. Often, they will prepare the letter, or provide you with a form or template for your manager to use. If you don’t have a human resources department at your company, speak with your manager about the request. If they don’t have a template or form, it is a good idea to offer to prepare one for them to minimize the burden of preparing the letter. This will also help to ensure that the information you hope to have included in the letter is included — but be mindful that there are some things your manager may not be permitted to include in the letter for liability reasons. For example, don’t ask them to state that you were the best employee ever or that your salary should be doubled. Keep your request reasonable and professional."
Disclosing information about a former employee
It's important that employees are informed that an employment verification letter has been requested, and by whom it was requested so that the employee can authorize the disclosure of the included information. Disclosing information about a former employee requires a signed release of the information on file, which companies should have from the exit interview.
Likewise, if the employee or former employee requests the employment verification letter themselves, they will need to have it authorized and signed by their current or former employer.
What information is included in a verification of employment letter?
A verification of employment letter has several components, but it's not like most letters.
"A verification of employment letter isn’t an ordinary, long-winded employment reference," according to Small Biz Trends. "The organizations requesting a verification of employment letter typically only want employers to confirm a few of the key facts relating to an individual’s employment. These include: the date employment began, the individual’s name and title, their salary and how often they are paid and whether the employee is part-time or full-time."
Be sure to seal the envelope before issuing it, as well.
Sample employment verification letter
Here is a sample of an employment verification letter for your reference:
To whom it may concern:
This letter serves to verify the employment of the named employee.
Employee Name: Lisa Frank
Social Security Number: XXX-XX-XXXX
Date of Birth: 08-21-1989
Employee Lisa Frank is an employee of X Company.
Employment Dates: August 10, 2014, until current.
Job Title: Associate Editor
Current (Final) Salary: $60,000.00 per year
Please feel free to reach out to us if you need any other information that is not included on this form.
Signature of Authorized Employee
Human Resources Department
XX-XX-XXXX [Date of Response]
AnnaMarie Houlis is a feminist, a freelance journalist and an adventure aficionado with an affinity for impulsive solo travel. She spends her days writing about women’s empowerment from around the world. You can follow her work on her blog, HerReport.org, and follow her journeys on Instagram @her_report, Twitter @herreportand Facebook.