Learn how employment verifications involve more than pre-employment, but also renting an apartment, buying a car, mortgages, loans and many other use cases.
In most workplaces, especially ones with superb employee retention rates, employees will pass through a myriad of life circumstances. In fact, an employee might join the organization just after college graduation, stay on as they purchase their first car, rent an apartment for the first time, get married and later decide to invest in a home of their own.
As time goes on and retention efforts succeed, great companies help transcend employees’ growth. More specifically, employers play a vital part in employees’ life changes. For many of those changes, employers ensure that the hoped-for transition is able to come to fruition by providing an income and/or employment verification when the employee is requesting valuable information is confirmed from the source.
Often when income or employment verification is thought of by human resources professionals it’s in the context of gathering information regarding a new employment opportunity, but in fact, many times they need to provide the employment dates and salary information of a current employee or past employee to verifiers outside of employment opportunities.
Here’s a look at some of the non-hiring related reasons that employees may need an income or employment verification.
Whether an employee is hoping to sign a lease for an apartment, condominium, townhouse or single-family home, they will often need the company that they work for to attest their employment status and/or salary. Landlords and property managers will want to see documentation that shows an applicant's salary is high enough to qualify them for the monthly rent on the home they wish to move into. They may also be looking for information about the length of employment, type of employment (full time, part time, contract) and possibly expected duration.
Consumers have a wealth of options when it comes to financing the purchase of a new or used automobile. They may choose to use financing available through the car dealership that is selling them the car, speak with their local credit union for a loan with favorable rates, or turn to a bank of choice for an auto loan.
Depending on the loan that a shopper is applying for, and the numbers that make up the rest of their financial picture, each of these financial services outlets may require confirmation of income and employment in order to secure a loan.
When a lender has concerns about a borrower’s ability to make payments on a potential loan, whether that concern is based on the price of the car, the borrower’s credit score, or perhaps the lack of down payment, they may require documentation of salary and employment. If the cocktail of available data, outside of salary and length of expected employment, does not present a solid enough financial picture to ensure to a lender that a borrower will be able to consistently make their monthly payments, an employer may need to be contacted. Some lenders will find the presentation of pay stubs or W-2 forms to be acceptable. However, other lenders do not accept pay stubs or W-2 forms, instead they request information that shows that the applicant can both be expected to earn enough monthly salary to easily meet the necessary payments and will remain employed while paying back the loan.
When it comes time to buy a first (or second...or third!) home, employees will need their company’s help in order to lock down and maintain a loan approval. Unlike when they are creating other types of loans, many lenders will require more than one employment verification when mortgages come into play. The home buying process can be long and involved, therefore borrowers may obtain loan approval from a lender, but then not head to the closing table to finalize that loan for a month. During that time it is possible that their employment picture may have changed.
It is not unusual for a lender to look for salary and employment verification at the outset of the mortgage process, and then verify those two facts again just prior to closing. These verifications may take place by phone or by mail. Occasionally, a mortgage lender may rely on pay stubs or W-2 forms as proof of employment and salary, however, most lenders will look for that information to come directly from a current employer.
Companies spend countless hours and a core piece of HR’s budget trying to provide the best possible benefits to their employees. One area businesses may overlook when thinking of the ways in which they support their teams is in providing timely, accurate, and thorough employment and salary verifications when they are requested by staff members. This is especially important since there are plentiful opportunities that employees will need these verifications. This request is often the open-sesame to an exciting next step in an employee’s life, a step that their company can help them to take in the most efficient manner possible.
Many companies have provided this ultra-valuable benefit seamlessly through automated employment/income verifications + letters. There are not many service providers at the moment, but companies like Segment, Oscar Health, InsideSales, and many others have driven their verification process to become employee first by offering automated verifications and letters for all employees through Truework. To learn more on how to provide employees with the best employment and income verification experience visit - www.truework.com.