Understanding employment salary verification

Employment salary verification is just what it sounds like: when a prospective employer verifies the salary you received from your past employers.

If the numbers you provided don’t match what your previous employers quote, your new employer may think you’re being dishonest. This is where salary verification comes into play. Because of its vital role in employment and business, it’s important to understand employment salary verification and how it works.

Why do employers need to verify salary?

Typically, an employment salary verification is done during the negotiation stage of a job. If an applicant has asked for a salary that’s higher than what was offered by the employer, the employer may ask for proof that the applicant made that amount in their previous role. Hence the necessity for employment salary verification.

Essentially, your new employer also wants to make sure that your salary with them is based on real numbers rather than inflated figures, especially at the upper end of the proposed salary range. Employers will be especially concerned about salary verification if the past salary you report is much higher than average for the type of work you do.

As an added bonus, salary verification tells the employer if the applicant is being honest. If the applicant is lying, not only is their salary request easier to deny, but it could also be a red flag that the applicant would make a dishonest employee in general.

How employment salary verification works

Employers have a number of methods available to them for verifying past salaries. Most employers have one or two preferred methods and may be reluctant to use any other approach.

Contacting the past employer directly

Many companies will simply pick up the phone and call the HR department at your former (or current) place of employment. However, there are two common roadblocks to this approach.

First, if you’re still working for that employer, you may not have told them yet that you’re leaving, in which case, you would likely not give permission for this call.

Second, your old employers may be leery of the legal issues that can arise from providing salary information and may refuse to do so. If a past employer provides a salary number as verification that doesn’t match the number you gave, and you lose the job offer as a result, the old employer could be at risk for a lawsuit. For that reason, many employers will only confirm employment for their employees if contacted directly.

Asking you to obtain a salary verification letter

Some new employers will ask you to have your most recent employer send them a salary verification letter. This letter, preferably on company letterhead, confirms your dates of employment, your title, and your ending salary with the company. You can speed this process along by typing up such a letter, having your manager or an HR manager sign it, and then asking the manager to send it to your new employer.

As with the first method, if you haven’t told your current employer that you’re leaving, this approach won’t work. In some cases, you may be able to convince your new employer to wait for the verification letter until after you’ve received a formal job offer and given notice to your old employer.

Using a salary verification service

Companies like Truework provide salary verification services that can get the information anonymously. Companies feed their employment information into Truework’s database on an ongoing basis. When needed, any employer can check the database to confirm employment details, including employee salary information.

Using this method, new employers can check employment-related information without alerting the old employer that that employee is leaving. It’s also much faster and more hands-off than other approaches to verifying salary.

requesting other documentation

If none of the other methods will do, a new employer may ask to see your recent pay stubs or W-2 from the prior year to verify your salary. This may or may not give the employer an accurate way to verify the numbers you provided, since W-2s can incorporate factors that would change your reported wages. For example, the numbers might be inflated thanks to commissions or bonuses you received during the year.

Providing a W-2 to a prospective employer can also feel like an invasion of privacy, since there’s a great deal of sensitive financial information on these documents. W-2s can include how much you contributed to retirement accounts, whether your employer provided dependent care or medical benefits, your approximate rate of tax withholding, and more.

Verifying salary from prior employers

New employers may ask you for a complete salary history going back several years. Providing salary numbers for your most recent position is usually easy, but the further back you go, the harder it will be to recall specific details.

So, what do you do if you don’t remember exactly what you made years ago? Old W-2s and even tax returns can help you pin down the exact amount you made. Offer letters from those employers can also help, although, if you worked for an employer for several years, your salary probably went up over time.

If you can’t find documentation, don’t just write down a number and hope for the best. Instead, put down a range that you know is safe, or write “approximately $X” to make it clear you’re providing an estimate. As long as the salary verification is close to the estimated numbers you provide, your new employer should be satisfied.

Verifying salary for positions that ended some time ago can also be quite a challenge for your new employer. The previous company may have moved or gone out of business since you worked there. You can also speed up the salary verification process by giving your employer any HR contact info you may have.

Avoid the potential pitfalls of employment salary verification

Being accurate is extremely important when you inform a potential employer of your salary history. If employment salary verification turns up discrepancies, your job offer may be revoked — at the very least, the hiring process will likely be delayed while the employer gets confirmation.

Understanding different employment salary verification methods can help you work with your new employer to quickly verify the numbers you provide and to lock in your desired salary.