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At some point in the hiring process, talk to turns to pay. The applicant’s income can influence salary decisions. But what if the previous employer won’t tell you? How would you know the applicant hasn’t given you inflated figures?
Many employers are using a new tactic to keep applicants honest about previous wages: asking them to provide their most recent W-2 tax form.
In some areas, it’s become standard practice. It’s another edge employers have in the tight job market.
But is it legal?
Yes — but it can land you in a heap of trouble if you don’t follow strict rules governing how much information an employer can seek — and what could happen if sensitive information falls into the wrong hands.
For instance, it’s wise to ask job applicants to conceal their Social Security number when they give you their W-2 or tax return.
Asking for salary information verification is more common in financial services jobs or certain sales positions. Getting the information from the applicant also can come in handy if the previous employer is no longer in business.
A cottage industry has sprung up (if there’s a need …). There’s a service called IncomeCheck that’s sold by The Work Number, an off-shoot of Equifax. The service pulls the applicant’s tax data, including relevant forms. The applicant must sign a permission form.
While the practice of asking for this information isn’t illegal, employers can quickly find themselves in hot water if they’ve targeted only protected classes (based on gender, race, religion, etc.). It could become grounds for a discrimination claim.