Employment Verification Letter
Proof of current or previous employment
Proof of current or previous employment
An employment verification letter is a letter that acts as proof that an employee is currently employed at a certain company or was previously employed at a company. The letter is used to demonstrate an employee’s experience in a specific field, residence in a given location, or their eligibility to access certain privileges.
The employment verification letter is required when an employee is applying for a job in another company, and the prospective employer needs to verify that the applicant indeed worked in the mentioned company.
Also, when buying a new home, the mortgage lender may require the buyer to provide the employment verification letter as evidence that he/she will honor their obligations by making timely payments towards the purchase of the house. Other parties that may require to be furnished with the letter include insurance companies, financial institutions, landlords, and government agencies.
There are various parties who may request for an employment verification letter, and they include:
When a current or former employee requests for an employment verification letter, the request should be reasonable and professional. Also, if the company oversees a human resource department, the request should be directed to the human resource manager who will then provide the form or template that the manager will use.
In the absence of a ready template, an employee can prepare the form that includes all the required information and forwards it to the appropriate manager. The manager will fill the form and stamp it with the company’s official stamp so that it can be used for official purposes.
Verification of past employment forms part of an applicant’s screening process, and most employers may obtain a physical letter that provides information about an applicant’s past employment and previous employers.
An employer is interested in verifying the employee’s name, type of employment, positions held, responsibilities, and information about the employee’s salary and bonuses. The employer can telephone or write to the specific former employers of an applicant to request for the specific information they are interested in.
Financial institutions, mortgage lenders, and insurance companies may also request for an employment verification letter with the aim of establishing the income status of an employee and their ability to meet certain obligations. For example, a financial institution may want to verify an employee’s employment status, salary and bonuses, current obligations and current place of residence.
An employment verification letter may be broken into the following components:
The current or previous employers should provide the company’s mailing address, email address, and phone number so that the hiring company can contact them in the future if required. The contact information also proves that the company is a genuine company.
The section contains a confirmation stating that the stated employee indeed worked at the company for a specified duration of time. It should indicate the period when the employee started working with the company until the date when they left the company to pursue other interests.
The section provides a detailed explanation of the employee’s role in the company. It provides details of the various positions that the employee held in the company, the responsibilities they performed in the company, the type of employment (full-time, part-time or casual), any awards and achievements earned by the employee, and the salary and bonuses.
The letter should also include the signature and stamp of the company at the bottom to prove that the letter came from the employee’s former company and it is an official document.
The employment verification letter should be brief and only include information that the prospective employer or other third parties requested. Different companies follow a policy regarding the release of certain sensitive information such as salary and bonuses. Such information can only be released after an employee signs a release form that grants permission to disclose the information.
An employee may need to request an employment verification letter from the current or former employer for the following reasons:
A prospective employer may want proof of employment as part of the company’s background check procedures on job applicants to verify that they are truthful about their employment history. The new employer is interested in knowing where the employee worked in the past, their job title, and job responsibilities.
When buying or renting a new home, the mortgage lender or landlord will require an employment verification letter to confirm your employment status and annual income. The other party wants to verify that your annual income is enough to meet the mortgage repayments or the monthly rent and maintenance costs.
CFI is the official provider of the global Financial Modeling & Valuation Analyst (FMVA)™ certification program, designed to help anyone become a world-class financial analyst. To keep advancing your career, the additional resources below will be useful:
Advance your career in investment banking, private equity, FP&A, treasury, corporate development and other areas of corporate finance.
Get certified as a financial analyst with CFI’s FMVA™ Program.