Can an Employer Ask for W2s to Verify Your Income?

Job interview

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Some employers may ask for copies of your W-2 forms or pay stubs to verify your compensation prior to making a job offer. Most employers will not take this measure, but it makes sense to be prepared should the issue arise.

Employers in certain fields like finance and sales will be more likely to ask for verification since salaries can have great variation. Compensation in these fields can be strongly impacted by bonuses and commission which employers view as an indication of outstanding past performance. 

Can an Employer Ask for Income Verification?

A growing number of states and cities have enacted legislation that prohibits employers from requesting information about the past salary of job candidates on the grounds that the practice perpetuates wage inequality. These lawmakers believe that women have been historically underpaid as compared to their male counterparts in similar jobs and therefore wish to discourage employers from basing salary offers on past wages.

New York has prohibited inquiries about past salary during the hiring process for state workers, and the legislature is considering a law that would extend that ban to all private employers. Massachusetts has enacted similar legislation banning all employers from requesting information about past salary. New York City (effective in November of 2018), New Orleans, Philadelphia, and Pittsburgh have passed laws restricting employers from asking job seekers to furnish salary history.

Not all these laws reference the issue of W-2s as a source of salary information directly, but most employers in those states and cities are likely to steer clear of such requests. Rhode Island has specifically passed a law prohibiting employers from requiring candidates to furnish W-2 forms.

The National Conference of State Legislatures reports that at least 21 states have proposed legislation curtailing the rights of employers to extract salary information from job candidates or to consider it in their hiring process. If you have any doubt about the laws in your state, check with your state labor department

 A salary structure is established in most organizations based on the demands of the positions that they are advertising. So it would be inappropriate if they were to make a job offer based on your prior earnings rather than the character of your target job.

Most employers have enacted policies forbidding the release of confidential information about past or current employees. U.S based employers are not legally obligated to furnish such information. So it is unlikely that your past employers will agree to divulge any salary information to prospective employers.

How to Handle a Request for Salary Information

Unfortunately, if you want to be considered for the position, it will be hard to refuse a request for salary documentation. What you can do, however, is ask if the employer is considering making an offer. If the answer isn't positive, you can say you would prefer to wait until an offer was pending. You could also ask for average salaries for similar positions at the company, so you have an idea of a salary to expect.

If your current job carries a lower salary but has other compensating factors like stock options or a superior benefits plan, you should mention these factors. If your current salary is referenced in salary negotiations, it is appropriate to mention that enhancing your salary is a significant reason you are targeting a new job. You can also point out the differences in the jobs and your expectation to be paid comparably to other employees carrying out that role for their firm.

How to Get Copies of W-2 Forms

If you don't have copies of your past W-2 forms, you can ask your employer(s) for a copy or order copies of your past tax returns directly from the IRS. The tax return will contain the W-2 information you need. If you used tax preparation software, you will be able to go into your program and print off a W-2.

Most importantly, make sure you are completely honest when providing previous salary information on job applications. The last thing a job seeker needs is to be caught in a discrepancy. Supplying false information can be grounds for rescinding an offer or dismissal if the employer finds out that you lied.

The information contained in this article is not legal advice and is not a substitute for such advice. State and federal laws change frequently, and the information in this article may not reflect your own state’s laws or the most recent changes to the law.