An employment verification letter is a formal written communication between a current or former employer, and a potential employer, verifying the potential employee’s status with the original company. These letters can also be requested by banks or landlords as part of the process to verify that an applicant has a stable job and income, and isn’t lying on their loan, mortgage, or rental application form. These letters can also be used to verify the employee’s or applicant’s salary requirements. Employment verification letters allow businesses to verify that an applicant has not lied on their resume or employment history statement.
When and How is an Employment Verification Letter Used?
Employment verification letters are used when an employee applies for a new job – either because they lost their previous job or they wish to move to a different company while still employed – or when an applicant applies for a mortgage, loan, major line of credit, or to rent an apartment.
Banks and other financial institutions request employment verification letters from current employers to ensure that the applicant has a stable work history and income. Sometimes, these institutions will ask for an income verification letter instead of or in addition to the employment verification letter, because the employment verification letter acts primarily as a request to verify current or former employment. However, most financial institutions wrap these two together, and receive information regarding current employment and salary history in one letter.
Property management companies and landlords use employment verification letters much the same way that financial institutions use them – to verify that an applicant for a rental property is able to pay their rent fully and on time. It will also verify for the landlord that the potential tenant has not lied about their job stability or income.
Potential employers also use these letters to verify the accuracy of a job applicant’s resume. Sometimes, job applicants lie about their employment history, or lie about their position with a company, to make themselves seem more desirable or qualified for a particular job. The employment verification letter can ensure that a potential employee is honest, and has the job experience to fill the position he or she has applied for.
Employers should be careful not to solicit information from former or current employers that violates Fair Labor Standards Act Laws at the state and federal level. Also, when hiring a new employee, it could be beneficial to have a signed agreement between the employee and the company that allows employers to release information regarding the employee’s job performance and history in the event that the employee leaves the company or applies for another job. Often, when an employee leaves a job, they will ask to use their supervisor as a reference or ask the Human Resources Department to write an employment verification letter for them – at which time, have the employee sign an agreement regarding the letter and keep it on file, so that the letter may be issued when any potential employer requests it.
Elements of an Employment Verification Letter:
Employment verification letters can be very simple to write, and use an easy-to-follow template that includes names of the addressor and addressee, as well as the name of the (former) employee; the date; either current or final salary information; position or job title; and a short description of the employee’s job performance, which features pertinent information regarding the current or former employee’s performance.
Download our free template to fill out a basic employment verification letter. While these letters are subject to certain legal restrictions according to the Fair Labor Standards Act and state and local employment laws, these are not legally binding documents and a template can be easily used in most cases. However, if you have any questions regarding information that you may or may not disclose, consult an attorney.