Can an Employer Ask for W2s to Verify Your Income?
What should you do if an employer wants to verify your income? 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. In some locations, employers are prohibited from asking. In others, there are no legal guidelines regarding salary information requests. If you do need to provide them but don't have copies of your W-2 forms, you can get them from your previous employers or the Internal Revenue Service.
Why Employers Request W2s
Employers in certain fields like finance and sales will be more likely to ask for verification, since salaries can vary greatly. 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?
Cities and States That Prohibit Asking About Salary
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 compared to their male counterparts in similar jobs, and therefore wish to discourage employers from basing salary offers on past wages.
A summary from the UAAW indicates that 15 states and territories have restrictions in place curtailing inquiries by all employers about salary history, including the following: Alabama, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Massachusetts, New Jersey, New York, Oregon, Puerto Rico, Vermont, and Washington.
Several others, including Michigan, North Carolina, Pennsylvania, and Virginia, have provisions in place regarding candidates for jobs with state agencies.
The cities of San Francisco, New York, Kansas City, Cincinnati, Toledo, and Philadelphia, as well as the counties of St. Louis, Missouri, and Albany, New York, all have regulations in place curtailing the practice of asking about salary history by most employers. Several other municipalities, including Chicago, Atlanta, Pittsburgh, Salt Lake City, New Orleans, and Louisville, prohibit city agencies from making inquiries about the salary history of job candidates.
Not all these laws directly reference the issue of W-2s as a source of salary information. However, most employers in those states and cities are likely to steer clear of such requests since it would violate the spirit of the law.
Check with your state department of labor for the latest laws in your area.
Company Policies Regarding the Release of Information
A salary structure is established in most organizations based on the demands of the positions that they are advertising. So it would generally be considered an inappropriate human resources practice to make a job offer based on your prior earnings rather than on the character of your target job.
Many 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 employers with 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
What's the best way to handle it if you're asked about your salary history? Unfortunately, if you want to be considered for the position, it will be hard to refuse a request for salary documentation where it is legal.
Ask about an offer. What you can do, however, is ask whether the employer is considering making an offer. If the answer isn't positive, you can say you would prefer to wait until an offer is pending. At that point, the employer might be sold on your value and more likely to offer an attractive salary.
Ask about salaries for similar jobs. You could also ask for average salaries for similar positions at the company, so you have an idea of what salary to expect and alert the employer that you expect to be paid like employees in comparable jobs.
Consider benefits and perks. 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.
Mention why you're seeking a new job. 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 positions and your expectation to be paid comparably to other employees carrying out that role for their firm.
How to Get a W-2 From a Previous Employer
If you don't have copies of your past W-2 forms, you can ask your employer(s) or its payroll company for a copy.
You can also order copies of your W-2 (or a transcript of your W-2 earnings if you filed electronically) 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.
It's Important to Keep it Honest
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.
AAUW. "State and Local Salary History Bans." Accessed Jan. 6, 2020.
SHRM. "Why Is Confidentiality Critical to Human Resources?" Accessed Jan. 6, 2020.