Verifying employment for tenants and borrowers is important to determine whether they can afford rent and are creditworthy. This process includes contacting employers directly, asking for pay stubs, and reviewing employment history.
This article will explore these methods in more detail and offer additional strategies for effective employment verification.
What Is Employment Verification?
Employment verification is the process of confirming someone’s job details. This typically involves verifying job titles, dates of employment, and, most importantly, salary.
The need for thorough employment checks has become more important over time.
For example, the mortgage industry has recently seen a large rise in fraudulent applications. The National Mortgage Fraud Risk Index increased by around 15% between the first quarters of 2021 and 2022.
This significant increase makes it clear that you need to strengthen your verification procedures. Doing so helps protect against financial loss and ensures the credibility of applicants.
Let’s explore how you can effectively verify employment details.
Methods of Employment Verification
Below are the common methods for verifying employment for your borrowers or potential tenants.
1. Direct Contact with the Employer
The best way to verify employment details is to contact the employer directly. This approach provides accurate, firsthand information and allows you to resolve any misunderstandings quickly. However, it can also present challenges that need careful handling.
With that in mind, let’s start by reaching out to the employer.
How to Contact the Employer
The first step is to contact the employer. While email is a common choice due to its efficiency, a phone call usually provides quicker and more detailed responses.
⦿ By Email
When contacting an employer via email, it is important to be clear and professional. Here’s a sample email you might use:
Subject: Employment Verification Request for [Employee’s Name]
Dear [Employer’s Name or HR Department],
I hope this message finds you well.
I am reaching out to verify the employment details of [Employee’s Name], who has applied for [loan, or rental]. To process their application, we need to confirm the following information:
➡Job Title
➡ Dates of Employment
➡ Salary
Could you please provide this information at your earliest convenience? If you require any additional information or forms to complete this request, please let me know.
Thank you for your assistance.
Best regards,
[Your Full Name]
[Your Position]
[Your Contact Information]
⦿ By Phone
When calling, be prepared with all necessary details and be polite yet professional. Here’s a sample script you might use:
Phone Script for Employment Verification
“Hello, my name is [Your Name], and I am calling from [Your Company/Organization]. I need to verify the employment details for [Employee’s Name] who has applied for [loan, or rental].
Could you please confirm the following information for me?
➡ Job Title
➡ Dates of Employment
➡ Salary
I appreciate your assistance with this matter. If there are any forms or additional information you need from me, please let me know. Thank you.”
Information to Verify
When contacting an employer, ensure you request the following key details:
◙ Job Title: Confirm the employee’s role within the company.
◙ Dates of Employment: Verify the start and end dates of their employment.
◙ Salary: Check the current or most recent salary to ensure it matches what was provided.
Potential Challenges and Solutions
Verifying employment can come with its challenges, such as:
⦿ Failure to Respond
Sometimes, employers may not respond to your initial request. If this happens, follow up with a polite reminder via email or phone. It’s helpful to provide a specific deadline for when you need the information.
⦿ Refusal to Disclose Information
In some cases, employers may be unwilling to share details due to company policies or privacy concerns. If this happens, you might ask for an alternative proof of income or employment from the employee.
Also Read: What Counts as Proof of Income?
⦿ Incorrect or Incomplete Information
If the employer provides incomplete or incorrect information, point out the issues and ask for clarification. Then, make sure to check with the employees to confirm that the details match their records.
Approach and Solutions
To approach these challenges, maintain professionalism and persistence. If an employer fails to respond or provide necessary information, follow up with additional emails or phone calls.
Additionally, building a rapport with the employer may facilitate a smoother verification process.
2. Pay Stubs
Pay stubs are another valuable method for employment verification. They provide detailed records of earnings, including salary and deductions. This documentation helps confirm an applicant’s income and employment status, whether self-employed or employed.
Given their official status, pay stubs are often the best way to verify employment details for all workers.
How to Analyze Pay Stubs for Accuracy
When looking at pay stubs, it’s important to check a few key details to make sure they are accurate:
Employee Information:
◘ Name: Verify that the name on the pay stub matches the applicant’s name.
◘ Employee ID or SSN: Check for consistency with other provided documentation.
Pay Period:
◘ Ensure the dates on the pay stub correspond with the claimed employment period.
Income Details:
◘ Gross and Net Pay: Compare the gross (before deductions) and net (after deductions) pay amounts with what the applicant has stated.
◘ Deductions: Examine the types and amounts of deductions to ensure they align with typical withholdings.
Employer Information:
◘ Company Name and Address: Confirm that the employer’s name and address on the pay stub match the details provided by the applicant.
YTD (Year-to-Date) Totals:
◘ Check the year-to-date totals to see if they make sense given the employment period and stated salary.
Analyzing these aspects thoroughly helps verify the authenticity of the pay stub and ensures the information aligns with the applicant’s claims.
Limitations of Relying Solely on Pay Stubs
While pay stubs are useful, they have limitations and should not be the sole method of employment verification:
⦾ Lack of Context:
Pay stubs do not provide context about the stability of employment. For example, they do not indicate if an employee is on probation or part-time. This can affect the reliability of their income.
3. Employment History Review
A thorough review of an applicant’s employment history can provide valuable insights into their stability and overall suitability. Examining past employment patterns helps identify red flags and assess the applicant’s reliability.
The Importance of Checking Employment History
Beyond confirming the applicant’s information, reviewing employment history serves several important purposes:
◘ Assessing stability: A consistent employment history often signifies the ability to meet financial obligations.
◘ Identifying potential red flags: Gaps in employment, frequent job changes, or termination for cause may raise concerns.
Red Flags to Look For
While not every red flag is indicative of a problematic applicant, it’s important to be aware of potential warning signs:
◘ Frequent job hopping:
Excessive job changes in a short period can signal instability or difficulty maintaining employment.
◘ Unaccounted gaps in employment:
Extended periods without employment should be explained satisfactorily.
◘ Negative references:
Previous employers who express concerns about performance or termination should be taken seriously.
Using Employment History to Assess Stability
A stable employment history often correlates with a higher likelihood of fulfilling financial obligations.
Key indicators of stability include:
◘ Consistent employment: A steady work history with minimal job changes.
◘ Long-term positions: Extended periods of employment with the same employer.
◘ Positive references: Recommendations from previous employers highlighting reliability and performance.
Combining Methods for Comprehensive Verification
To get a clear picture of an applicant’s employment status, use pay stubs along with direct contact with the employer. Combining these methods helps ensure that all information is consistent and reliable.
Now, for high-quality pay stubs, consider PaystubHero.
Our platform allows you to create professional pay stubs and compare them with others for accuracy. Use them alongside other verification methods to ensure reliability.
FAQs
Here are the most frequently asked questions on how to verify employment.
