Employment Verification: What It Is and How to Simplify the Process (2025)

If you run a business, you likely have experience hiring people—and perhaps you’re hiring now. But what if your ideal candidate has lied about their work experience? More importantly, how can you ensure you’re not hiring a fraudster?

A 2023 study by ResumeLab revealed that 70% of workers admitted to lying on their resumes, with 37% confessing to lying frequently.

Another alarming statistic from the Association of Certified Fraud Examiners (ACFE) highlights the risks of employee fraud: Between January 2022 and September 2023, occupational fraudsters caused total losses exceeding $3.1 billion.

While occupational fraud can occur at any stage of employment, employment verification helps mitigate the risk by confirming a candidate’s work history, credentials, and identity—ensuring they haven’t falsified their background.

It also helps detect key red flags that signal potential fraud. So, what does employment verification involve? Let’s dive into the details.

What is employment verification?

Employment verification is a background check on potential employees. It looks for inconsistencies between what an applicant puts on their resume and their actual employment history.

Employees can misrepresent their academic qualifications, professional certifications and credentials, job references, job titles, responsibilities, or work duration. Sometimes they entirely omit information about their past to hide that they were once fired or changed jobs too often. Employment verification ensures that prospective hires are who they say they are.

Employment verification also helps reduce the risk of hiring a fraudster by confirming a candidate’s work history, credentials, and identity, ensuring they have not falsified their experience or background. It helps detect discrepancies, employment gaps, or fabricated references, which are common red flags for fraudulent activity. Additionally, thorough verification combined with background checks and fraud detection measures strengthens hiring security.

Businesses usually conduct employment verification when they hire new employees. But current staff can also ask to verify employment so they can get a bank loan or visa approval. Similarly, former employees seeking a new job might contact their former employer to ask for a verification letter.

Why do companies ask for employment verification?

Companies request employment verification for various reasons, including:

1. Hiring decisions: To confirm a candidate’s work history, job title, and experience, ensuring they are qualified for the role.
2. Background checks: Employment verification is a key part of broader background checks to assess an applicant’s suitability and help employers make informed decisions.
3. Loan and credit applications: Lenders and credit providers verify employment to assess an applicant’s financial stability and creditworthiness.
4. Immigration and employment visas: Authorities may require proof of employment to process visa and immigration applications.
5. Security clearance: Some industries mandate employment verification for access to sensitive information or high-security environments.
6. Insurance and benefits eligibility: To confirm an employee’s eligibility for benefits, pensions, or other entitlements.
7. Regulatory compliance: Certain industries require employment verification to meet regulations and maintain compliance with laws and standards.
8. Professional licensing: For roles requiring a professional license (e.g., compliance officers), employers verify employment history to ensure licensing requirements are met.
9. Promotions and internal transfers: To validate an employee’s experience and qualifications when considering them for promotions or internal mobility.
10. Contractor verification: Companies may verify the qualifications and reliability of freelancers or contractors before entering into agreements.
11. Health and safety compliance: In high-risk industries (e.g., construction, healthcare), employment verification ensures employees have the necessary background to mitigate risks and maintain workplace safety.
12. Workplace misconduct investigations: Verification of past employment can provide context for investigations into workplace misconduct or performance issues.
13. Diversity and inclusion efforts: Some companies use employment verification to support their diversity and inclusion initiatives.
14. Fraud prevention: Employment verification helps deter candidates from falsifying resumes and reduces the risk of hiring individuals likely to engage in fraudulent activities.

Preventing internal fraud

Although internal fraud can occur at any stage of an employee’s tenure, reliable employee verification can help ensure that employers do not hire fraudsters in the first place.

Bad actors are increasingly using deepfake technology to deceive potential employers. In one notable case, a North Korean operative used a stolen US identity and an AI-enhanced photograph to secure a remote software engineering position at a security awareness training firm. With these falsified credentials, the individual gained access to the company’s systems and introduced malware, potentially compromising both internal operations and customer data. Despite a thorough hiring process—including video interviews, background checks, and reference verifications—the fraud was only discovered after the individual began deploying malware on a company device.

To prevent such incidents, organizations should implement reliable and advanced identity verification measures. These include liveness detection, comprehensive document checks, deepfake detection tools, and enhanced due diligence.

Suggested read: The Top-6 Most Common Employee Frauds—How to Minimize Internal Fraud

Methods of employment verification

There are two ways to verify employment: 

1. Manual checks: To verify a candidate, the HR team must contact each workplace listed on the person’s resume. They can do this by calling, sending an email, or requesting an employment verification letter.
2. Outsourcing to a third party: Some services specialize in verifying potential employees. While they charge a fee, they significantly reduce the HR and compliance teams’ workload. Additionally, their optimized verification process typically takes just a few days.

Steps of employment verification

There are several important steps in conducting employee verification, including for remote hires, to ensure the prospective employee is who they claim to be and to avoid hiring a fraudster.

1. Identity verification and Liveness Detection

• Use digital identity verification tools that scan government-issued IDs
• Use Liveness Detection to confirm authenticity.
• Cross-check their details with national or global identity databases if available.

2. Remote interviews and video calls

• Conduct video interviews to assess communication skills and ensure the candidate matches their provided ID.
• Watch for inconsistencies in answers that could indicate fraud.

3. Employment history and references

• Contact previous employers to confirm job titles, responsibilities, and tenure.
• Request employment verification letters or work references from managers or HR representatives.

4. Background checks

• Utilize third-party services to conduct criminal record checks, credit history reviews, or sanction list screenings, depending on the role and jurisdiction.

5. Education & certification verification

• Verify degrees and certifications directly with universities, training institutions, or professional bodies. For example, AllDocs could be a useful tool for scanning educational documents, such as diplomas, to verify academic credentials.
• Use online databases where applicable to cross-check credentials.

6. Work sample & skill testing

• Request portfolio work, case studies, or conduct practical tests to verify skills.

8. Digital footprint and social media review

• Check professional networks like LinkedIn for consistency in work history.
• Review public social media profiles for red flags that contradict the candidate’s claims.

Note that not all jurisdictions allow businesses to check marital status, former salaries, disability information, or eligibility for rehire. For instance, some American states have banned employers from requesting information about previous salaries since this may encourage pay discrimination.

Red flags

We’ve taken a look at the recommendations of several hiring companies and compiled a list of the top four red flags to look out for.

1. Refusing a check. If a potential employee refuses a check, it might mean they have something to hide. It’s better to search for employees that speak about their education, employment, or criminal history honestly.
2. Inconsistencies. A background check on an employee can reveal inconsistencies between their resume and employment/education history. Candidates can also omit information about past jobs, which could indicate that they want to hide something about these positions.
3. Bad references. When reaching out to previous employees, employers might get some negative feedback on a candidate. This feedback might stem from a misunderstanding, but it’s a good idea to keep an eye out for similarly negative feedback from other sources.
4. Criminal record. This doesn’t mean that businesses must refuse a candidate due to past run-ins with the law, but it’s a good idea to know the full extent of the employee’s criminal history. Extra attention should be paid to convictions that can impact the job, i.e. fraud-related offences. For instance, if you run a payment service, applicants with past fraud convictions might not be the best fit for you. Moreover, in many jurisdictions, certain roles, such as CEOs or compliance officers, can only be appointed with a clean criminal record.

Whether these red flags are enough to reject an applicant is up to the employer to decide.

Who can legally verify employment?

Former and current employers have a right to confirm employment. Verification requests can come from employees, government agencies, regulatory bodies and others. While it’s a must to reply to government requests, businesses don’t have to reply to former employees, collectors, mortgage lenders, etc.

When businesses receive a verification request, they must review the laws issued by the relevant government body where they’re located and determine which types of data they have the right to request. For example, in the UK, recruiting staff may only make limited enquiries about a candidate’s health or disability.

Many jurisdictions have enacted privacy laws that limit how employers can collect and use personal data. For instance, in the European Union, the General Data Protection Regulation (GDPR) requires employers to justify the need for collecting certain personal information and to protect that data from misuse.

Additionally, employers should generally only request information that is directly relevant to the job or necessary for a specific business purpose. Personal details such as sexual orientation and marital status typically do not affect job performance and should not influence hiring or employment decisions.

Employment verification laws 2025

Different jurisdictions are tightening regulations around data handling during employment checks, which may affect what information can be verified.

Additionally, some jurisdictions are moving toward requiring employers to disclose their employment verification processes to candidates.

Upcoming updates for 2025 include:

USA

Fair Credit Reporting Act (FCRA)

Updates to the FCRA are set to clarify the requirements for conducting background checks, including employment verification. Employers will need to provide written notice to applicants and obtain their authorization before conducting any checks.

EU

General Data Protection Regulation (GDPR) Amendments

The EU is expected to enforce stricter regulations regarding data privacy in employment verification processes. These amendments include ensuring transparency about how personal data is used and providing applicants with access to their verification data.

Australia

Fair Work Amendment (Employee Verification) Bill

Proposed changes aimed at enhancing employee verification processes could be introduced in 2025, focusing on protecting workers’ rights and ensuring that employers conduct thorough background checks.

Canada

Employment Standards Act Reform

Some provinces are considering amendments to their employment standards to include more stringent guidelines on employee verification and the handling of personal information in hiring processes.

How to choose the right provider for employment verification

Employee verification detects lies on resumes and helps businesses hire honest employees fit for the job, therefore, reducing the risk of hiring a fraudster. This check can be done manually by an HR team or delegated to a third-party service provider.

The most effective way to reduce employee fraud is by implementing automated solutions that detect potential red flags.

Additionally, companies can introduce a multi-level approval process for specific financial transactions. For instance, if an employee initiates a transaction exceeding a set threshold, it would require approval from at least two additional staff members.

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FAQ

• Why do people need employment verification?

  Employment verification is needed to confirm a candidate’s identity, work history, credentials, criminal record, and academic qualifications, ensuring they meet job requirements and reducing the risk of fraud.

• How is employment verification done?

  Employee verification is conducted by contacting previous employers, verifying documents, checking databases, and sometimes using third-party background check services.

• How does employment eligibility verification work?

  Employers confirm a candidate’s legal right to work by reviewing identification documents and, in some countries, cross-checking with government databases. Employers may verify the details provided by the candidate against government databases, which can include checks on:

  • Immigration status
  • Work permits
  • Social security details

  Beyond eligibility verification, some regulatory or government bodies, as well as organizations, may conduct additional background checks, including:

  • Criminal history
  • Employment history verification
  • Credential checks

  Once an employee is hired, employers must keep records of the verification process and may need to renew work authorizations or re-verify eligibility at certain intervals, depending on the jurisdiction. Therefore, an effective and secure tool is essential for maintaining proper records.

• What is checked during employment verification?

  Employers typically verify job titles, tenure, responsibilities, education, certifications, as well as criminal records or credit history—depending on the role.