Can An Employer Legally Verify Salary History?

The job market in the United States is becoming increasingly competitive not only in terms of individual skills but also in relation to compensation. As of 2015, American employers are still enjoying a substantial pool of overqualified candidates to choose from, and this has not stopped them from keeping the upper hand with regard to salaries and compensation. To this effect, verification of salary history has become a sort of hiring strategy, and it is legal to a certain extent.

Various laws in the U.S. prohibit discrimination in the workplace. The most often cited federal law in this regard is Title VII of the Civil Rights Act, which deals with discrimination that is based on nationality, race, religious preference, gender, etc. There are also Titles I and V of the Americans with Disabilities Act, plus the Equal Pay Act of 1963. Although these laws offer protection against discriminatory practices during the hiring process, they do not specifically prohibit employers from screening the salary history of their job applicants.

There used to be a time when employers would only move to verify a job seeker’s previous earnings as a way to filter out applicants who provide false information. To this effect, it is easy to understand the apprehension of a human resources manager to hire someone who lies about how much they made at their previous job. There are several lawful resources available to employers who wish to verify information provided by job applicants; some unethical employers may even resort to informants who can provide this information on the sly.

American employers are still concerned about job seekers lying on their applications and resumes, but they are also very interested in how much or how little of a salary they can offer to the right candidate. The hiring process has become a vast arena for business negotiations that serve various purposes. Most employers would be interested in finding out what their competitors are paying their staff and whether their payroll management style is conducive to profits; this is the kind of information they can get through the modern hiring process.

Employers who ask for W2 forms or tax returns from job seekers during the salary negotiation phase may not have the capacity of verifying prior income on their own, or they may be testing the applicants and noting their reactions. These are the kind of situations that seasoned applicants are better at handling.