While requesting a copy of a job applicant’s W-2 is somewhat unusual, the practice is more prevalent in certain industries, such as financial services, and with certain types of positions, like sales jobs. The request is also sometimes made when a former employer has gone out of business and, therefore, cannot be called to verify employment/salary history in the traditional way.
In today’s environment, more and more employers are unwilling to share salary information about their former employees due to legal concerns; verification of compensation when commissions are involved can be especially challenging; and background checks continue to reveal a problem with inflated salaries reported on job applications. While asking for a candidate’s W-2 form may seem like the answer, it is important to consider the issues.
Privacy. In general, asking for a job candidate’s W-2 form is not an illegal inquiry under federal law. However, the request may seem overly intrusive to an applicant who views that information as personal or feels that you are questioning his or her honesty. Identity theft is a growing issue, and many individuals will not give out personal information as freely as they have in the past. Even if an applicant has been truthful in all regards, he or she may feel uncomfortable or offended by a request for W-2 information and may be unwilling to proceed with the employment process.
State laws. It is also important to check state laws to see if there is anything that would prohibit an employer from asking for a job applicant’s W-2 form. In Utah, for example, employers with 15 or more employees cannot ask a job applicant to supply his or her Social Security number (SSN) until either a job offer is extended, or the applicant provides consent at the point in the application process where the employer would be required to obtain a criminal background check, credit history, or driving record. Because a SSN appears on the W-2 form, employers would need to be aware of these restrictions.
Discrimination. There also may be a potential for discrimination if items listed on an individual’s W-2 — like receipt of nontaxable sick pay, dependent care credits, and adoption benefits — suggest a characteristic that is protected by federal or state antidiscrimination laws. Discrimination could occur if disability, sex or another protected characteristic were considered when making the selection decision. An individual’s W-2 form, or lack thereof, can also reveal a period of unemployment. The EEOC is studying the issue of whether excluding unemployed individuals from consideration for a job has a disproportionate impact on women, minorities and individuals with disabilities.
Job offers. Finally, using the salary information on an individual’s W-2 form as a way to make an appropriate salary offer is typically not a good idea. An individual’s prior earnings are based on another company’s job. Instead, look at the requirements of the job being filled, research the current market rates using reliable salary surveys, and see how the job fits internally with other positions at the organization.