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Employment and Income Verification Requests on the Rise—How to Promote Data Security and Help Maximize Productivity

ThumbprintA host of factors like a recovering economy and low interest rates have spurred an influx of employment and income verification requests from creditors and property managers—and there is no stopping in sight. The Federal Reserve has stated it will continue its stimulus programs, which help to keep interest rates low, until the national unemployment rate reaches 6.5 percent.[1]  In addition, recent pieces of legislation such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), the Improper Payments Elimination and Recovery Act of 2010 (IPERA) and the Affordable Care Act (ACA), which  are intended to intended to protect consumers and their privacy rights, are creating an even more intricate compliance landscape for businesses.

With the increase in verification requests, processing this important data in a secure and timely manner has become an increasingly difficult task for many employers. Typically, an HR team will handle verification requests for new hires. However, verification requests are not limited to new employees. An employee could require several verifications in a given year if he or she is buying a new home or car, refinancing a mortgage or enrolling for a social services benefit, for example.

Tips for helping to ensure data security

As verification volume increases, a secure fulfillment process has become more important. If you don’t already have a third-party service provider handling verification requests, there are several best practices your HR department should consider to help ensure the security of employee information. These best practices should also be used by any service provider to whom you may choose to outsource your employment and income verifications. Whether you handle verifications in-house, currently use a third party or are considering outsourcing employment and income verifications, consider these tips:

  • Verify the verifier. Identifying the validity of a verifier before providing an employee verification is critical to help protect the privacy of your employees’ information.
  • Determine the verifier has a legitimate purpose. The Fair Credit Reporting Act’s definition of “permissible purpose” is a good framework to use when processing verification requests—make sure any verifier has a permissible purpose when requesting information.[2]
  • Give out accurate information to verifiers. Employers should provide accurate and complete information to verifiers and have controls in place to help ensure the integrity of the information. 

Business leaders can’t afford to stake shortcuts when it comes to employment and income verification compliance. Not only can improperly filed verification requests reduce business productivity, they may also delay employees’ receipt of necessary benefits. It’s worth taking a look at your current verification process to see if there are opportunities to help streamline processing and reduce errors while also helping to keep your employees’ data secure.

 

 



[1] See Federal Reserve press release, Dec. 18, 2013, http://www.federalreserve.gov/newsevents/press/monetary/20131218a.htm

[2] See 15 U.S.C. § 1681b, Section 604.



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