EMPLOYMENT VERIFICATIONS: “TRUST BUT VERIFY” - A Creative Services, Inc. Compliance Corner Article

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Although President Ronald Reagan is often credited with the famous quote, “Trust but verify”, according to Suzanne Massie, author of “Land of the Firebird: The Beauty of Old Russia,” she was the one who taught then President Reagan the Russian Proverb.

Employers should take this advice when conducting employment verifications, as well as other verifications in their pre-employment background checks. This article focuses on the importance of and best practices in conducting employment verifications for potential employees.

According to a joint survey by HR.com and the National Association of Professional Background Screeners (NAPBS), 96% of employers conduct at least one or more types of background checks on job candidates. Background checks can include a variety of search components including criminal checks, motor vehicle driving checks, credit checks, civil searches, sex offender searches, sanction or debarred lists, professional licensing, education and/or employment verifications and more.

Historically, a background check into an individual’s criminal history was driven by risk mitigation and the threat of potentially expensive litigation under negligent hiring theories whereby an employer can be held liable for the acts of its employee when the employer knew or should have known about dangerous patterns or history of behavior.

Reducing risk is still a driver of pre-employment background checks today, however, barriers to obtaining certain types of criminal information have forced employers to contemplate additional avenues to determine a candidate’s trustworthiness, reliability and/or suitability.

The widespread trend of ban-the-box laws have limited the scope of criminal history inquiries as well as how much information can be reported regarding a candidate’s criminal record. Ban-the-box laws span the spectrum of limiting what and how far back the employer can inquire regarding criminal records, when they can conduct a criminal check (conditional offer may be required), notices regarding any potential criminal records, to how much time a candidate has to dispute the information.

Employers continue to maintain a strong emphasis on mitigating risk when candidates have a pattern of dangerous behavior (or other adverse patterns of behavior as they relate to the function of a job), however, these new restrictions and limitations have given rise to growing emphasis on verifying past employment as a way to further ensure a level of trustworthiness in an application for a position.

How do employers know if candidates are being honest about their previous work history? A recent report by Office Team in August 2017, “Nearly Half of Workers Know Someone Who Was Dishonest on Resume” identifies how problematic this issue is. Specifically, the types of information misrepresented or exaggerated were:

  • Job Experience (76%)
  • Job Duties (54%)
  • Employment Dates (26%)

Why do candidates misrepresent, exaggerate or outright lie on their employment history? Well, for any number of reasons:

  • They never worked at the employer listed;
  • They don’t want the potential employer to know the truth;
  • They have a better chance of getting the job;
  • They are covering up a gap of employment; or
  • All the above.

What can employers do to verify a candidate’s work history? Most commonly, employers conduct employment verifications and/or professional references on a candidate.

First, distinguish the difference between an employment verification and an employment reference. The purpose of an employment verification is to independently verify that a candidate worked where they said they worked for the time they said they worked there. Employers want to make sure they are onboarding the candidate with the title and experience the candidate describes on their employment application and/or resume. An employment verification is typically verifying the candidates dates of employment, ending title, reason for leaving and eligibility for rehire. Employment verifications are usually conducted through Human Resources or other official keeper of records. A growing number of companies will outsource this verification process to an automated verification service as a way to circumvent having to respond to what can, at times, be a large volume of previous employment inquiries. The employer will provide a data feed of previous employment information to the clearinghouse company, who, in turn, will provide this verification information for a fee.

In some, albeit rare, cases, the keeper of records may provide additional performance or narrative information regarding a candidate, however, this is less common in today’s world of verifications. Despite that a true statement made by an employer, regardless of how unflattering or negative, is not defamatory as a matter of law, the increased threat of defamation litigation has put a muzzle on many employers regarding any other commentary beyond name, title, reason for leaving and eligibility for rehire.

Note that prior to the recent burst of wage equity laws, some employers would also provide salary or income information as part of a verification. The legislative landscape has made a significant impact on the ability for prospective employers to ask this question to previous employers. Employers should use caution and understand if and when they can collect previous salary information on a candidate.

Employment references are a little looser in terms of providing narrative or commentary information regarding a candidate’s employment history. This is mostly because the candidate has provided the reference information and has given consent for the reference to provide this type of information. Litigation can still lay in wait, however, reference information is typically at the request of the candidate and candidates commonly provide the names of references they know or believe will provide favorable information to the prospective employer.

Generally, the individuals proving reference information do not have exact dates of employment or may not be privy to situations where the candidate is not eligible for rehire at the previous employer. This is why it is critical to contact the keeper of records directly to create a consistent, solid timeline of employment (or unemployment) as provided by the candidate.

In conducting employment verifications, employers should look for and carefully consider any gaps of employment that surface. A gap of employment as provided in a candidate’s application or resume is not necessarily a red flag, however, a gap of employment that surfaces because the dates of employment provided by candidate vary from that provided by the keeper of record shows variant dates than that provided by the candidate should be carefully considered. The employer should be looking at why there is a gap of employment and how recent. A 60-day gap of employment seven years ago may not be as relevant as a 60-day gap of employment in the past two or three years. Employers should understand what the candidate was doing during this timeframe? Perhaps the candidate was just taking some time off or taking care of family. Employers should take a look at any potential adverse issues that may have given rise to a gap.

In some cases, gaps of employment can be explained by temporary placements or contractor status where a candidate was working at the company listed, but through an agency or other employer. Tailoring previous employer questions on an application to include temporary employment or contract employment will help to identify the appropriate keeper of records to contact. Providing alias, maiden or other names the candidate may have used in the past allows the keeper of records at the previous employer to search under multiple names and alleviate potential gaps based on a name not found.

Patterns of ineligibility for rehire should be cause for concern. Most employees who have been in the workplace long enough, at one time or another, may have not had the greatest relationship in every instance with their boss. Sometimes this can result in an unfavorable parting of ways between the employee and the employer. However, an employee with a history of unfavorable parting of the ways should be closely reviewed.

Prospective employers should be weary of a previous employer that reaches out proactively to the prospective employer to verify past employment. Contact information including phone numbers or email addresses, should be independently developed or sourced. Inbound only calls or relying on candidate provided contact information for a previous employer leaves the prospective employer vulnerable to potential fabrication of previous employment. Trust but verify…independently.

A history of employment with companies that have gone out of business should also be reviewed by the employer. Companies no longer in business can provide a challenge for employers trying to verify past employment of a candidate. It would not take a cunning candidate more than 20 minutes to google companies that have gone out of business and draft an impressive yet unverifiable resume. Employers should take steps to ensure the candidate is being truthful in assertions of previous work by ensuring at a minimum that the provided company existed and that dates of employment provided are consistent with where and when the company was operating. Resources such as a state department of corporations are valuable tools for this type of due diligence. In some cases, employment records are transferred to other entities and are still verifiable, such as merger or acquisition. Depending on the recency or importance of the employment, employers may want to review tax or payroll documents from the candidate as proof of employment. (Take caution of wage equity laws for information that may contain wage information.) Alternatively, the Internal Revenue Service (IRS) offers services to independently verify this information with written consent of the candidate.

Finally, often times a candidate is currently employed while the prospective employer is conducting employment verifications and other background check searches. At the risk of jeopardizing current employment, the candidate opts not to have their current employment verified until an offer or unconditional offer is presented. In these situations, once the candidate provides notice to the current employer, it is critical for the prospective employer to verify that most recent employment. Otherwise, the employer is exposed to potential fabrication of current employment.

In summary, employers should have appropriate policies in place when conducting employment verifications, either on their own or through a background check company. The employer, or their screening partner, should have strong, proven methodologies in place that meet best practices. Human resource representatives, or the investigators at the background screening company, should be trained in how to uncover sometimes hard to find information as well as identify red flags or potential issues.

ABOUT THE AUTHOR: Kellie O’Shea, Esq., PHR, is Associate General Counsel for Creative Services, Inc. (CSI), a global background screening and security consulting firm helping companies screen smart and hire with confidence for over four decades.

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