An employee's salary may need to be verified for a number of reasons. Mortgage companies and landlords, prospective employers, and credit card issuers require salary information. In addition, federal, state and local government agencies might need need to verify salary for taxation purposes, In cases of a payroll error or wage increase, an employee's current employer may need to verify an employee's salary. There are several ways to do this, including just asking the employee to produce pay stubs. However, if you need verification from another source there are additional ways to obtain the information you need.
List the time period for which you need verification of the employee's salary. Determine the reason you need salary verification and if you need to verify gross or net wages. Lending institutions usually want to verify gross income since the mortgage approval is sometimes based on gross wages. Credit card issuers are probably more interested in knowing an employee's net income since that's the portion from which debtors pay their credit card amounts. Beside each year you need salary information for, write down the source from which you intend to obtain the information. Your choices are usually the employee himself, the IRS, previous employers and, in some cases, state or local government agencies or the Social Security Administration.
Ask the employee to produce copies of tax returns for previous years. Unfortunately, some tax filers do not keep copies of their completed tax returns, especially if they file online. To resolve that issue and help with income verification, the IRS developed an innovative way to assist financial institutions with income verification. Using the Income Verification Express Service, with the employee's consent, you can request not just a copy of the employee's tax return but copies of W-2 and 1099 forms as well. As of January 2011, the cost to obtain records is $2.25 for each tax return and each supporting document. This process makes it much simpler to verify wages, particularly when a home loan is contingent upon receiving salary verification.
Review the list of previous employers on an applicant's resume or application if you need salary verification to make an employment offer at a level consistent with the applicant's past earnings. Write a short introduction and script to follow when you call each employer. Explain who you are, why you're calling and that you want to verify salary. Most applications have a section where the candidate indicates his previous salary. This is very helpful because asking for verification of salary means you are merely checking the accuracy of the information you already have. Asking a previous employer to tell you the applicant's previous salary without any information of your own is not the same as verifying salary information. Therefore, be prepared to state the salary amount listed on the candidate's application.
Check your files to determine if the employee is, or has been, a member of a labor union. If so, you can obtain copies of collective bargaining agreements by contacting the U.S. Department of Labor, Office of Labor Management Standards (OLMS). Collective bargaining agreements contain hourly wage information, and many of the agreements are accessible online. OLMS is the federal agency with enforcement rights over labor union financial reports and other required filings. Wage information obtained using this method will not provide you with possible overtime wages, but it's a starting point from which to calculate an employee's past or current wages.