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Legal to verify previous salary?

Vyas Sanzgiri
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Joined: Jun 16, 2007
Posts: 686

My question got buried in another post so I am opening up a fresh thread :-

Can the HR of the interviewing company say "We will verify your current salary" Can companies verify our salary? Is that legal is USA? How is it done? I think this is private information which a company cannot leak. Then how come recruiters say such stuff?

Is it even legal to ask for earlier pay stubs?


===Vyas Sanzgiri===
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Henry Wong
author
Sheriff

Joined: Sep 28, 2004
Posts: 18896
    
  40

I don't see why it should be illegal. Company have a right to confirm facts about you -- standard background check. After all, you sold yourself with certain experience, certain pay package, certain education. The company has the right to confirm that it is getting what it is paying for.

The only law that I can think of, that can be violated, are medical records -- but there may be more. Please correct me if I am wrong.

Henry


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Vyas Sanzgiri
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Joined: Jun 16, 2007
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Hi Henry,

My question is rather how they do this without me stating this? Can the "old company" reveal such info? Are there any other services that hold such info?
Henry Wong
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Joined: Sep 28, 2004
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  40

Vyas Sanzgiri wrote:My question is rather how they do this without me stating this? Can the "old company" reveal such info? Are there any other services that hold such info?


If you don't give approval for a background check, I don't think they can. But keep in mind, that most job offers are contingent on the background check. So... you can accomplish the same thing by refusing the job offer -- as there is no need to do a background check on you anymore.

Henry
Bear Bibeault
Author and ninkuma
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Joined: Jan 10, 2002
Posts: 61413
    
  67

Henry Wong wrote:I don't see why it should be illegal. Company have a right to confirm facts about you -- standard background check. After all, you sold yourself with certain experience, certain pay package, certain education. The company has the right to confirm that it is getting what it is paying for.

I could not disagree with Henry more. While a company may have a "right" to verify employment, and even position within the company, salary should be between an employer and employee. Period. It's no one else's damn business what I make or made. No one. Except the IRS.


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Vyas Sanzgiri
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Joined: Jun 16, 2007
Posts: 686

ok...let me take this further....How can they approach the earlier company? If they do, then the earlier company (now current since the job offer has not been accepted) will know that the person is looking for jobs outside. I am still not sure how they achieve this
Kj Reddy
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Joined: Sep 20, 2003
Posts: 1704
Vyas Sanzgiri wrote:ok...let me take this further....How can they approach the earlier company? If they do, then the earlier company (now current since the job offer has not been accepted) will know that the person is looking for jobs outside. I am still not sure how they achieve this


There are many ways:

1. The new employer can check with your previous company after you joined with new employer. Most of the time your background check with your previous company will be checked only after you joined in the new company.
2. They can ask your bank statement where your salary will be credited or they can ask you to show your previous year Tax statement.
Henry Wong
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  40

Bear Bibeault wrote:I could not disagree with Henry more. While a company may have a "right" to verify employment, and even position within the company, salary should be between an employer and employee. Period. It's no one else's damn business what I make or made. No one. Except the IRS.


I would argue that it depends... if the background check is used to find the salary, then yes, I agree. But if you already told them your salary, used it to negotiate a better one, I think there is a "right"... The goal of a background check is to see if you lied during the process, and lying about your salary is important.

Henry
Henry Wong
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Joined: Sep 28, 2004
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  40

KJ Reddy wrote:There are many ways:

1. The new employer can check with your previous company after you joined with new employer. Most of the time your background check with your previous company will be checked only after you joined in the new company.
2. They can ask your bank statement where your salary will be credited or they can ask you to show your previous year Tax statement.


Don't know about other countries... but in the U.S., option 1 is generally not done. Due to lawsuits, most companies will not give any information, good or bad, about previous employees. About the only that you can get is whether the person being check was an employee.

Henry
Jeanne Boyarsky
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Joined: May 26, 2003
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It's up to the old company what they want to give out. Many companies only share "name and dates of employment" these days for legal reasons.

I agree with Henry that if they do a background check, this could come up. It is on your taxes after all.


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Vyas Sanzgiri
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Joined: Jun 16, 2007
Posts: 686

I have never been asked to show my Tax returns or bank statements so 1 and 2 are out. It is my personal information and the new company has nothing to do with it!

What are the other means the companies can use to find this info? I wonder if it is just a random shot in the air used by companies. I think Bear has a point here. I doubt if anyone ever knows it unless I reveal it
Kj Reddy
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Henry Wong wrote:
Don't know about other countries... but in the U.S., option 1 is generally not done. Due to lawsuits, most companies will not give any information, good or bad, about previous employees. About the only that you can get is whether the person being check was an employee.

Henry


But it happens in few companies in India. To avoid fake experiences some companies exchange the information.
Kj Reddy
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Vyas Sanzgiri wrote:I have never been asked to show my Tax returns or bank statements so 1 and 2 are out. It is my personal information and the new company has nothing to do with it!



I am sorry it looks I am deviating the topic, I just realised your question is more specific to US. And the options I gave in my previous response are more valid in India.
Vyas Sanzgiri
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Joined: Jun 16, 2007
Posts: 686

Well, in that case you should sue the companies releasing such private info
Mark Herschberg
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Joined: Dec 04, 2000
Posts: 6037
"Right" is a strong word.

In most states in the US... you don't have a right to much in terms of privacy with your former employer. Anything between you and them belong to them. They can go through your work emails and work computer. If you log a timesheet every week it's theirs to do with as they wish, including publishing it online. The can do what they want with almost all you information relating to your relationship. The exceptions are SSN, age, birthday, race, religion, medical, etc. You can sue, of course, but you won't have ground to win.

Now if they offer a negative opinion of you they expose themselves to legal actions. For this reason many companies don't verify much beyond dates of employment.

When you allow them to run a financial background check and/or credit record check you give them access to this information either directly or indirectly.

--Mark
Deepak Bala
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Joined: Feb 24, 2006
Posts: 6661
    
    5

Ah a nice discussion and interesting views.

@Henry

I agree with your view that a company should be able to verify that it is getting what it paid for.

@Bear

I agree that ideally, past salaries should not be a new employer's business. In the country where I work, it is considered standard practice to reveal what your past salary is when you are looking for a new opportunity. It is so standard that the thought of saying 'no' had no even struck me until I read this post. Most companies offer a % hike when they employ you and they want to ensure that this % does not cross a certain limit. How does that % relate to the new job role ? In my opinion it does not. This system puts you at a disadvantage if you start out with a low salary. When employers argue that X % increase is not standard or they say 'Most employees at our firm for experience Y earn Z$' my response is usually 'Why should that matter ? Salaries are not based on statistics or how much some one else with the same experience / grade earns. It should be based on skills'.

Have you been able to secure a new job without revealing your last salary ? How successful is it and by what % do you think it dents (if it does) your chances of landing a new job ?


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Vyas Sanzgiri
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Joined: Jun 16, 2007
Posts: 686

Nice argument Mark. Bala, I have never ever revealed my past salary to anyone. I do not give them any authorization to chk my background etc unless they make me an offer. I guess I will check with someone in the HR if they ever check salary information. Cause financial/ background check can only reveal half of the info.
Suresh Thota
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Joined: Sep 24, 2003
Posts: 152

http://www.theworknumber.com/

This site is used to exchange salary info between employers. Many wall street firms uses this too. As per their web site, more than half of fortune 500 employer uses their service.

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