What is a Verifier and How Does the Verification Process Work?

If you’ve ever rented an apartment, purchased or leased a car, applied for a mortgage, or applied for government benefits, you probably needed to provide a verification of your employment and/or income. As an employer, you may now be responsible for providing your employees with the help they need to complete these transactions, and you want to help the process be as smooth and secure as possible. 

What types of verifications are there? 

• Verification of Employment (VOE) - In pre-hire situations, this helps to confirm the employment history provided on a resumé or job application. In lending situations - like when applying to rent an apartment or buy a car- this can help provide a clearer picture of financial stability and ability to pay, because the lender can verify that the employee has a job. A VOE does not include any income data.

• Verification of Income (VOI) - This type of verification is used primarily in higher-dollar lending situations, like when someone is buying a house. Verifying income helps show the ability to make income to pay the loan’s principal and interest and helps eliminate the need to gather tax returns and pay stubs to prove the employee’s income.  

• Social Service Verification (SSV) - This is used to help government agencies verify that a person is eligible to receive benefits from social service programs like Medicaid, Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP), and Child Support Enforcement (CSE), amongst others. Depending on the type of benefit, government agencies may request income and employment data to confirm eligibility.

Who can request an employee's information?

An entity (such as a lender, employer, or government agency) that requests an employee’s information is called a “verifier.” Under the Fair Credit Recording Act (FCRA), a verifier requesting an employee’s employment and/or income information must show they have a legally required, permissible purpose for accessing the data. Additional laws at the state or local level may also govern who can access the data. 

How does the verification process work?

Employers are the primary source of truth for employment and income information on their employees. Some verifiers might reach out directly (typically via phone) to current or previous employers to request verifications. But imagine taking calls all day long from verifiers asking for information about your employees. It could be very time consuming and distract you from more strategic work. 

Alternatively, employers may provide a file each payroll cycle to an employment verification service such as The Work Number® from Equifax. This service delivers an automated verification solution that helps streamline the transfer of information between employers and verifiers, ultimately benefiting the employee by creating a more private and accelerated decision process. This can enable instant employment and salary verifications 24 hours a day, 7 days a week and reduces the level of employer and employee involvement in the process.

How secure are verifications?

Verifiers need an employee’s permission to receive the information, and there should be a document presented that discloses that the verifier will verify the employment and/or income, typically at the time of application. The employee will be asked to sign that document, giving written permission for the verification to occur. Some verification providers require an additional employee acknowledgment, but this can sometimes slow down the process since consent was already provided by the employee.

If an employer is taking calls with requests and providing information over the phone or via email, they may be unknowingly providing sensitive information to someone who is not fully authorized to receive it. Many employers are not willing to accept that risk if there is an easier and more private way to fulfill the request.

Verification services like The Work Number are governed by the FCRA. Verifiers are required to complete a credentialing process prior to gaining access to employee information and must provide permissible purpose for the verification, helping reduce the employer’s risk. 

What are some of the other benefits of using a verification service? 

• For a better employee experience - employees don’t need to track down tax documents or pay stubs to prove their employment and/or income

• Sensitive documents aren’t floating around, helping improve their security

• Since the systems are online 24/7, quicker verifications may be made, even after hours or on weekends when many people are shopping or making big financial decisions

• There can be a reduced risk of key entry mistakes compared to when manual documents are used

• Giving confidentiality in your employees’ personal matters

Clearly, verifications are needed at many points in an employee’s life. As an employer, you want to help make the process as smooth as possible, while still protecting their privacy and security. If you’d like to learn more about how automated verifications with The Work Number from Equifax can help drive life’s important moments for your employees while also reducing your manual HR tasks, check out this case study or contact us for additional information. 

The information provided is intended as general guidance and is not intended to convey any tax, benefits, or legal advice. For information pertaining to your company and its specific facts and needs, please consult your own tax advisor or legal counsel. Links to sources may be to third party sites. We have no control over and assume no responsibility for the content, privacy policies or practices of any third party sites or services.