Employment verification laws in New York

While the employment verification procedure is much the same everywhere, different states have different employment verification laws that can both help and hinder the process.

Understanding which laws apply in a specific area — in this case, the state of New York — can help you navigate the entire process without accidentally breaking any rules. This can save you a heap of legal trouble when reviewing job applicants, investigating prior wages for a salary negotiation, or confirming an applicant’s employment before issuing a loan or mortgage.

How employment verification generally works

Basic employment verification is just confirming that someone was employed at a certain company but can involve many other factors:

• The employee’s start and end dates
• Job title or position with the company
• The reason the employee left the company
• Salary information
• Job performance
• Possession of various skills and types of experience, such as certifications or experience working with specific technologies

Different states have a wide range of rules about which of these questions and pieces of information are permitted for employment verification. It’s important to understand how the laws work in the specific state where the employee resides. With more employers hiring remotely, businesses will need to be conversant with the laws for many different states — especially highly populated states like New York.

In states with stringent limits or without much employer protection, you may need to accept a much-reduced set of employment verification questions. But where does New York fit in as far as verification?

Employment verification in New York

Employment verification laws at the state level generally fall into two categories:

• Laws that protect the employer when sharing information that might impact the former employee negatively.
• Laws that limit or prohibit the sharing of certain details of employment history for both former and current employees.

This is no different for New York, where the same two categories are used for verification. While these two categories can limit what information can and can’t be shared, a deeper dive is necessary to fully grasp how these laws impact your ability to verify employment.

Employer protection in New York

The state of New York has very little protection for employers providing employment verification or references. As a result, employers in New York may be reluctant to release information aside from the most basic details about former employees. In particular, revealing that an employee was fired — and why — could leave the employer open to a defamation lawsuit by that employee.

If you are trying to conduct an employment verification with a former employer in New York, you can still ask personal questions — but expect that many employers will simply refuse to answer. This doesn’t necessarily reflect on the employee; many New York employers have policies preventing HR from sharing any details about an employee’s work history.

With knowledge of these restrictions, remote employers will have to decide whether they feel comfortable hiring an employee that may come with a less-than-complete verification by other state standards.

Employer limitation in New York

In July 2019, New York enacted a law barring employers from checking salary history information of prospective employees. In fact, New York City Administrative Code §8-107(25) specifically states, “Except as otherwise provided in this subdivision, it is an unlawful discriminatory practice for an employer, employment agency, or employee or agent thereof: 1. To inquire about the salary history of an applicant for employment; or 2. To rely on the salary history of an applicant in determining the salary, benefits or other compensation for such applicant during the hiring process, including the negotiation of a contract.”

This impacts companies hiring New York-based employees in two ways. First, employers will need to remove any mention of salary history from job applications and interviews. It’s a good idea to specifically counsel employees conducting interviews that they may not inquire about salary history at all.

Second, if a candidate volunteers details about salary history or you somehow stumble across the information, you must be careful not to let those details affect your hiring decision or the salary you set for the new employee. It would be best to document your hiring and salary decisions in full and in ways that show how factors other than salary history led to your final decision.

Section §8-107 also prohibits hiring discrimination because a prospective employee is currently unemployed. If one of your job candidates is unemployed, it’s wise to fully document your hiring decisions so that there can later be no question of discrimination.

In 2015, New York passed Executive Law §296, which, among other things, bans employers from considering a potential employee’s criminal history if that history didn’t lead to a conviction. This could become an employment verification issue if an employer reveals that a former employee was suspected of criminal activity. Here again, documentation will be a crucial step in avoiding future legal entanglements.

You will also need to take care when preparing your employment verification questions so that you’re not encouraging former employers to make such disclosures. In some cases, that’s not possible (for example, if you ask why an employee left the company, and the answer is “we think he stole company property”), but you can at least reduce the risk by avoiding questions that touch specifically on criminal behavior.

Adhering to employment verification laws

With more companies hiring remote employees, it’s critical to understand how state laws may affect employment verification. Taking the time to review the laws related to employment verification in New York and other populous states can keep employers from getting into trouble out of simple ignorance.

If you're looking at candidates from around the country, it's important to understand federal laws, not just local laws, relating to employment verification. Be sure to read up on general employment verification laws to avoid and legal trouble. Even if you're acting in good faith, lacking proper knowledge of verification laws and employee protections is an unreasonable risk that could land you in hot water. Check laws around verification, seek legal advice when you're unsure, and you'll be just fine!