What Types of Information Can Employers Release for Employment Verification?

Appropriate experience and understanding are essential traits for potential new employees. Some positions are more suitable for those needing on-the-job training, but many roles will demand someone ready to work without a slow learning curve. Job seekers know this, too, and the pressure to secure a position can sometimes lead them to lie about their experience on resumes, cover letters, and even in interviews. Employment verification is necessary to combat this trend.

Contacting other employers is something you or your hiring managers may do regularly. Confirming that someone worked where they claimed helps build confidence in an applicant’s suitability—or reveals falsehoods that may change your mind about employing a candidate. You aren’t the only one considering the background check and employment verification process. What about those companies that field applicants you previously employed?

You must be prepared to receive these phone calls or email inquiries from other companies or their background screening services. Just as you hope others can provide useful information for your purposes, so should you help others in this way. The challenge lies in determining what you can say and how to say it. In this area, caution is called for.

Why are employers cautious about what they reveal?

Unfortunately, we live in a highly litigious society—anyone can readily find a lawyer willing to make a case for a successful lawsuit. Similar issues have driven the rise of expensive FCRA violation lawsuits, even for so-called violations that never severely affected the hiring process. There is always some risk that an individual could allege you committed libel or slander against them. They may even claim discrimination if you make improper disclosures to other companies about protected class information.

Although such lawsuits aren’t high-profile or high-value, they can and do occur occasionally. Spending time and money fighting litigation isn’t a smart use of resources for a business. Therefore, a process that considers these risks is a must-have today.

What does the law say?

At the federal level, no laws specifically govern what employers can and cannot say about former employees–the issue is up to the states. As one might expect, this has created a spotty landscape filled with potential pitfalls. Some states may have “neutral reference” laws, which require employers only to share information that does not imply negative behavior or performance.

Other states like California, Georgia, Massachusetts and New York have “service letter” laws. Companies that lay off or terminate employees in these states must provide departing workers with letters detailing their service information. Other companies can then review these documents during hiring.

Nationwide, virtually every step has laws defining broad or narrow restrictions on what you can tell other employers when answering employment verification questions. Many states, but not all, indemnify employers from liability so long as they make good-faith efforts to provide true and accurate information. Because these laws can vary so much from place to place, we suggest reviewing local legislation and potentially consulting with an employment lawyer to understand the specifics in your locale.

What you can choose to tell other inquiring employers

Though you should check on what you can legally say to others in your state, there are some broad categories of information to know. Some employers will share more, while others will share less based on their level of risk tolerance. In general, you can usually share information that includes the following:

• Dates of hiring and dates of departure
• Job title and description
• Responsibilities and duties
• Re-hire eligibility
• Reasons for leaving (in some states)
• Whether an employee was fired or left voluntarily (in some states)
• Performance in the role (but be cautious)
• Disciplinary record - in states where such information is allowed.

Many companies will only confirm that an employee worked for them alongside their dates of service and job title or description. Some businesses won’t go farther than that. Ultimately, the right choice for your business depends on what you feel comfortable with and what the law allows.

No matter what you choose to disclose, always be truthful. Avoid editing your opinion about a candidate to another employer. If someone was a bad employee and you want to communicate that, show cause—chronic tardiness, aggressive conflict with coworkers, or deficiencies in work quality are all points rooted in the facts of someone’s performance. Avoid expressing personal disdain for an applicant; that’s where you start crossing a dangerous line.

Most states recognize that employers should not bear the risk of potential defamation lawsuits from conducting a background check and employment verification. Nonetheless, a well-considered policy is a valuable tool for protecting yourself. HR teams work best with solid guidelines.

Understanding salary verification and background check laws

Can you tell another employer what you paid an applicant if they ask? Sometimes yes, but often no. Many states have passed legislation that outlaws the disclosure of salary information or the use of such knowledge in the hiring process. Some companies prefer to keep this information guarded to protect a perceived competitive advantage. 

Before you disclose what you paid someone, be aware of the law in your area. Some of these laws provide for penalties when violated, and you don’t want to face a lawsuit enforcing regulations, either. Since salary is not always strictly related to performance in the job role, you may deem it unnecessary to share such information. No rule says you must disclose remuneration.

Create a Definitive Policy for HR to Follow Today

Understanding what you can and cannot disclose about past employees may require research, but it’s an important effort. That importance is especially clear when considering how many states have different rules and exemptions for companies of a specific size. Without a clear understanding of the legal guidelines in your area, you could risk violating the law or inadvertently inviting a lawsuit from former employees who believe you’ve wronged them.

Understanding the law as it applies to your business is the foundation for what you must do. You should create clear written guidelines for your HR teams or those involved in hiring with the appropriate perspective. Following these guidelines to the letter should help protect your business from future claims of unfairness, especially if you document such interactions.

Employment verification is very important in hiring, and companies that understand how to communicate effectively with one another help ensure a more trustworthy setting for all involved. Research the laws in your state, revisit your current policies, and create new guidelines that HR can refer back to when they receive requests for information from other companies. These steps allow you to remain compliant, be helpful, and protect your business.