Requesting copies of W-2 from a candidate before extending an offer

Scott Lane CFO and CRO • July 28, 2010

Seems a little hard core but, would think OK if voluntarily provided. I have heard of prospective employers asking for proof of current salary, rare but have heard of it. Although it was usually just a copy of a recent pay stub.

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Lyle Newkirk CFO • July 29, 2010

I have seen it done and it is legal but I would not do it. The only reason would be to verify salary and W-2s do not distinguish one time items like retro pay, etc. and base salary. Furthermore if you cannot trust a candidate on his history issues you probably should not hire him/her.

Sarah Jackson Associate Editor • September 1, 2015

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Carline Shaw Controller • July 28, 2010

This company is too hung up on details from the past. The position should be focused on how the applicant can help the company in the future. Not a company I would want to work for.

Derek Smith EVP Administration & CFO • July 28, 2010

I'm not sure how long you have been employed but providing copies of W-2s since you started employment seems inappropriate unless you somehow gave them salary information that is in conflict with the position. As a CFO and head of HR, I always decline to provide salary information to a employer who is inquiring about a current or past employee. I would offer to give them your most recent W-2 after receipt of the job offer.

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Anonymous User CFO • August 18, 2014

Derek:

You decline but, will you verify?

In my neck of the woods - local government - a standard procedure in all reference checks is for the prospective employer to call and ask, "Is his/her salary $XXX". Not wanting to hurt anyone but not wanting to give out intimate details, I will answer that "it was in that range" if it that is true. If not, I just say I cannot provide that information.

The interesting thing is, for most public agencies, you can find out the salary ranges for each position right on their websites or, from government watchdog agencies that publish those.

Joy Anderson Sr. Acct. Executiv • December 3, 2014

Yes, it is legal and most high tech jobs, especially in sales ask for a W2 to show that you actually made the sales you are stating on your resume. Oracle, SF.com just a couple that ask for W2 prior to employment.

David Dell CFO • July 29, 2010

Did this in the past only to verify sales volumes / commissions on sales employees (in an industry and location where sales compensation was very similar between competitors). However, the past did not always give good indications of the future success for these employees.

James Finn Consultant: Finance, Internal Control, IT Systems, and Compliance • August 6, 2010

I think this issue exposes a more important and (to me) undesirable position taken by employers looking to hire financial, IT, and administrative employees. The concept being presented by this type employer is that they want a person to fill a position just like the one they left doing the same thing that was done before, but I don't want them to get a raise. ??

This sort of cuts off right at the beginning of the job any efforts to improve the position and the pay. It is almost like asking the employer to provide a reference letter from the person previously doing the job in order to see if the new job can be done at the rate you were previously being paid. What if the job is an "impossible" job without changes ??

On the other hand - what if the applicant wasn't worth what they were being paid previously, I think baseball teams would have a problem dealing with this approach.

Jim Finn

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Jeff Taylor CFO • August 6, 2010

Unavoidable, depending on the position. And I would say to be expected. I think most hiring managers for most positions are looking for someone who has been there done that. That means they are looking for existing skills and direct experience, along with, one would imagine, proof that the person did decent work at their past jobs. I don't know how you escape that.

James Finn Consultant: Finance, Internal Control, IT Systems, and Compliance • August 6, 2010

I guess a point I was trying to make is that there is no assurance that the job is similar to what you were being paid for at the prior rate of pay. I have moved from a controller position to a another Controller position where the infrastructure, systems, and personnel support were not even comparable. I also moved into a CFO position that considered the fact that the systems needed to be redone ... so prior pay was not even a consideration.

I believe there are different people ad different corporate support infrastructures. Some are ridiculously labor intensive and some are close to being "self closing" - with similar pay. If a W2 becomes part of the hiring negotiation, then I would require the employer to discuss their commitments for equal or better closing systems support. Over 80% of the financial reporting and GL systems I have seen are more trouble to use than they are worth.

J Finn

AG Hammacher Controller • August 6, 2010

I also have heard of this in the past and I personally would not request nor agree to supply this information. It is not a question of transparency; it is a question of personal privacy.

If you do not have the skills to ascertain if the candidate is a good fit and worth the salary you are paying, then maybe you should reconsider your position.

If I requested to see a copy of the company financials, to see if the company was stable and worth my time to invest my intelligent talents then you would have the right to expect the same from me.

James Finn Consultant: Finance, Internal Control, IT Systems, and Compliance • August 7, 2010

I also would not provide this type of information unless the company was willing to provide comments and references from the last 2 or 3 people who held the position. This even assumes the deal looked good enough to chase.
However, I just reviewed the comments on this and noticed two "Problems": 1. The original issue was that the company requested a full set of W2's for all years of employment. The IRS and Social Security have this info, and it is considered restricted and protected information. ?? What if they only want the information to negotiate with someone else ?? And 2. Someone made the comment that the company may be interested in whether the candidate had been there, done that etc, and assurance that the candidate performed a decent job at prior employment. How does a W2 confirm or provide assurances of either???

I am of the school that anyone who has the notion that the person providing references is any more capable than the person requiring a reference is a bit naive. As someone else commented - the W2 or a HR reference only supports that a person worked there and the dates (W2 also provides dollars).

If an offer has been extended, I would be more likely to provide only the most recent W2; However, since all jobs are temporary, I would want some solid information related to the company and the prior persons opinion of the work requirement (and of the person requesting the W2).

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Anonymous CFO • August 18, 2014

"However, since all jobs are temporary"

Bravo!

You are looking at employment the right way. Too many on both sides of the desk, see it as something binding for life, like a marriage contract. That distorts the relationship to the point where we have frivolous lawsuits and mutual ill will. Something akin to a divorce.

In reality, an employer retains us for as long as we provide something useful to the organization at a price they are willing to pay.

We stay with an employer as long as we can provide something useful to the organization and are satisfied with the compensation we are receiving.

If any of those dynamics change, we can be let go or, we can move out. It happens all the time.

Arnold Sidun Controller • August 9, 2010

I question their ethics and need for this info.

There are so many good companies to go work for, why, even in these hard times in finding employment, would I even want to go there to work for this type of employer. No, don't think so.

Like the previous person stated, I would also, want to know who left and where could I contact them for reference on the company.

But, on second thought, why bother? This is definitely not a company to work for. If, they think so little of their employees at the entry stage, think about how hard it would be to work there on an ongoing basis.

They have more problems beneath the surface, then hiring a new Controller or CFO, etc. They have real deep trust issues, as well as ethics, and probably have a revolving door. Somewhere along the line they hired a fanatic that is in a position of authority, that may eventually take the company down, with these types of practices.

Robert Honeyman CFO • August 19, 2010

Most interviews ask about most recent compensation. Having to provide W2 allows the prospective employer an easy way of testing a candidates willingness to stretch the truth (or not). The last thing I would think most people want to do is hire a finance executive who is less than scrupulously honest.

Kelly Kruse CFO, Exec VP • January 17, 2011

I think you would be sending a bad message to request a W-2. A employees value is what you believe they are worth to the company. each party needs to have trust in the other, it is a two way street.

richard Eisenberg SVP • January 19, 2011

An after the fact request is irrelevant if an offer based on company and competitive pay standards has been made and agreed to. The question of what level of compensation is desired had to come up during the interview process for targeting purposes. There needs to be a way to address a request like this without putting the offer at risk. Does anyone have any suggestions?

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Kurt Kipfer Retired • January 21, 2011

this kind of request is legal although slightly unusual. however, in this day and age where the twisting of truth seems to happen more frequently, the employer may only be trying to assess the candidate's honesty. the negotiated pay range may be absolutely fine. they just want to confirm the candidate's honesty. And, quite frankly, if the candidate was truthful on the application, this shouldn't be a problem.

Nat Baker Management Consultant • January 24, 2011

Asking for a W-2 from a candidate is a new one on me but sounds like an HR idea to give easy, i.e., non-thinking, rules to follow and to partially justify their jobs. One should hire an employee for the value he/she is expected to add to the enterprise and the appropriate salary is that which will persuade them to work for you. That is a judgment call on the part of the hiring company and requires thought, judgment, and risk-taking not a simple rule to follow. Past salaries as evidenced by W-2's should have absolutely no bearing on a job offer. W-2's cannot tell the value a person will add to a company or the appropriate salary to compensate that person. It is the past. One may take lower salaries at times for many reasons.

Unless in dire straits I think I would respectfully tell the company that my past W-2's have no bearing on this and don't understand the need. If they are at the offer point I'm sure the hiring manager is interested in getting the position filled now by a competent person, not in having every box of some form filled out. If they insist let them start the hiring process over and go work for the competitor who may have a more enlightened idea about hiring. They have revealed a great deal about their company culture.

On an amusing note, to verify the accuracy of their pay scale data, would they reciprocate and show you W-2’s of employees that will be in the same salary range as the pay grade in which they will assign you. Of course, not!

Karen Squires CEO • January 25, 2011

Good one Nat!

Doesn't anyone check references anymore? I would HOPE that a prospective employer's primary interest is whether the candidate can successfully perform in the position. If all indications are that the candidate can successfully perform, then the employer should offer a compensation package that appropriately reflects the position, as well as the entity's pay structure.

The implication in the foregoing discussion is that previous salary is a measure of competency. I’m sure we’ve all known people who weren’t worth what we were paying them! And the reverse is true as well.

I wonder if there isn’t some kind of underlying issue here. Does the employer not believe the represented salary history? Even if the salary history can be substantiated, is taking a job in this environment worth it?

Josie, if your friend has other employment options, I would be tempted to suggest that they keep looking. Just because they can (request a W2 copy), doesn’t mean that they should. And I’m sensing some red flags with respect to the prospective employer.

Keith Perry Director of Global Accounting • January 28, 2011

One way to look at this is as an impact of influences from other business cultures. It is not unusual to require this in other countries. The US is somewhat unique in that gender, race, marital status etc are explicitly off the table in discussions, so I've run into some feelings of personal discomfort when getting resumes for positions in Europe that gave me info right off the bat that I scrupulously avoid asking for.

While Americans consider personal finance "the last taboo", it is important to understand that not all cultures feel this way, and our business culture is adopting these and other novel approaches to judging a person's employment history. Title, company size, GPA...it's just another piece of the puzzle. It may feel awkward, but the company in question may not be doing this from a negative standpoint. They may just simply be adopting methods of making an informed judgment about potential hires.

Nat Baker Management Consultant • January 28, 2011

In that case the response is very simple. Since it is an American that they want to hire, the response is that in the American business culture it is totally inappropriate to request such information and is considered a reflection that the company does not trust the candidates they are about to hire. All the arguments above that it is totally irrelevant to the value the person will add still apply and should be made.

If they want to hire you it is because they believe that you will bring something to the table, i.e., add value, that they need. If so they should respect your cultural taboos and refrain from pushing for inappropriate information. If not, let them start all over again and go work for the competition.

Ross Fuller Chief Financial Officer • May 7, 2013

The answers here surprise me. Why the aversion to asking for a W-2? the responses indicate that a job candidates credibility/integrity is being questioned at which offense is taken.

What is the difference between doing a background check, reference check, drug test, or compensation check? They are all steps in validating a job candidates employment eligibility and integrity. If a job candidate is smart, they engineer quality responses on a reference check. If the job candidate fails an independent background check or drug test, you are likely to re-evaluate your hiring decision, in part for liability reasons but in part for credibility reasons, especially if the candidate did not previously disclose any potential reasons they may fail the drug/background check. Likewise, if a candidate lied about their historical compensation through an independent check, would you or would you not re-evaluate their suitability for the position?

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Anonymous User CFO • August 18, 2014

It's all just too nosey. And, it shows a certain amount of disrespect for the candidate. That candidate is expected to accept all the hiring company's attributes at face value. But the hiring company is not extending the same, arm's length acceptance to the potential employee.

Hiring companies are not that up front with their own details. Finances? - only if it is a publicly held company. Turnover? Reason that incumbent left? etc.

Why the double standard?

"We need to confirm your salary history by reviewing your W-2's. Oh, yeah. This job? You can take it or leave it. We're in charge here."

Robert McNichols Chief Audit Executive • May 7, 2013

My impression of such a request from a prospective employer is that it is not one I would want to work for because they apparently don't trust me. Each employer uses market data, their own salary structure, the candidate's experience, etc. to determine what offer to make a candidate. Most companies try to offer around the midpoint as a starting point. W-2s don't really play into it.

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Chris Shumate Accounting Manager • May 8, 2013

I agree with you, Robert. For me I left a company over two years that had offices in 5 different states, employing close to 400 people. I was being paid based on the industry, company size, revenue, etc. Then two years ago I took about a 10% pay decrease working for a smaller company, in a different industry, that employed less than 70 people.

If I were to show on my salary history, as an example only, Company #1 $80,000, Company #2 $70,000 someone might ascertain that I am only worth the lower, will more than likely pay me based on the lower, instead of what the industry's standard is for the size of the company.

I don't think I would pursue a job that asks for compensation history before an interview. During the interview, I would offer it, never sooner.

Katherine Simmonds Agent • May 7, 2013

I would decline the job because your company has a trust deficit with employees. In addition I can tell you are only looking to pay me a pittance more than I earned at my last job rather than paying me a solid market salary. My guess is that you do not have formal compensation policies and that tells me a lot about how I will be treated as your employee. Your competitor was more likable so I will work for them, besides I don't understand why you are unable to confirm my past salary when you call my past employers. Oh maybe its because you don't want to pay a service to perform all the background checks and employment references. So that means I will probably not get my expense report approved either. I appreciate the offer though.

Next.

Cindy Kraft CFO Coach • May 8, 2013

I agree with Ross Fuller.

Anybody ever watch Dr. House? His favorite saying was "everybody lies." And I am NOT in any way suggesting anybody on this thread, nor Josie who posed the question, is lying. I'm suggesting that there is truth to House's statement and that in this day and age, when making bad hiring decisions is costly and has the potential to be devastating on many other levels, companies "want" to get their hiring decision right. Since the company is in the driver's seat at this point, it has the right to execute the process it has put into place in order to make a smart hire.

What you, as the candidate, GET to decide is ... based on the company's policy of asking for this information, is it STILL a company you want to work at, are still interested in, and a place where you could be effective/successful? And you get to decide no if you find this to be an offensive request.

BTW, recruiters routinely ask for that information before moving candidates forward. You might be very, very surprised by the "spin" put on salary by many candidates.

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Chris Shumate Accounting Manager • May 8, 2013

Cindy - As a general rule of yours, if you were to ask as a recruiter, what would a compensation package include? Salary only, salary and benefits, etc?

Robert Honeyman CFO • June 3, 2013

Chris,

Whenever I'm asked that question (would that the next time is the last time!), I give my last salary and specify, "plus options plus bonus." Anything considered "burden" (i.e., insurance, payroll taxes, and other benefits) is not relevant to any such discussion.

Cindy Kraft CFO Coach • June 5, 2013

Chris, your total compensation package is relevant, but it needs to be broken down between base + anything and everything else.

Stephen Glenn Controller • May 7, 2014

Cindy,

"everybody lies" that would include the hiring company. They might lie about the amount of work involved, working conditions, company culture or the reason the position is open.

Dare we guess the company's reaction if the candidate asked to speak to the last person who held the position? I would venture to say the company would be highly offended by the candidate wanting to verify the truthfulness of the companies statements.

Anonymous User CFO • August 18, 2014

@Robert:

I will have to respectfully disagree. A smart person, will look at the total package being offered. Salary alone isn't enough.

For instance, my & my spouse's health care costs with darn good coverage currently cost my employer more than $25,000/year. And, my employer is contributing an amount equal to 13% of my salary to a deferred comp plan that is under my control which is also more than $10,000 per year. Between the two, I'm receiving more than $35,000/year in income tax free benefits! I ought to know. I'm the CFO.

When I've spoken to other employers, they will frequently mention they "offer health care insurance" and "have a retirement plan" .

That isn't enough information for me to make a personally sound, financial decision.

In many cases the employee is picking up a large part of the tab or, their offerings are not as good as what I have.

I need to factor that into my decision in pursuing or passing on the opportunity. We're talking a lot of money there.

Wayne Spivak President & CFO • May 8, 2013

I would never divulge what my salary + benefits were to a prospective employer.

I want an offer based on (in no particular order) a) my skill set, b) the market, c) the value add I can bring.

Whether I made $1/yr or $1M/yr, I might take a job because I like the company, the product, the people. Why I accept the rate is immaterial to compensation I received before (being totally independently poor help shape this opine).

On the other hand, offers that are far below market for companies to prospective employees tell you about the employer.

There comes a point that privacy is sacrosanct, and an employer doesn't need to know. While employers may disagree, they also don't have to offer me employment (and they will be on the losing side of that decision (having a good ego helps)).

I'm sure Cindy will totally disagree with this position.

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Robert Honeyman CFO • June 3, 2013

Wayne,

The only reason I can see for asking for W-2 is to test the veracity of the candidate's assertions vis-a-vis compensation history. If the new company requires a statement about that history prior to granting interviews, it may be a bit out there to ask for W-2s but once the candidate accepts the rules of the game, it doesn't seem too bizarre to expect the new company will want confirmation of the candidate's assertions.

If you choose your path, I imagine the problem disappears since refusing to disclose seems to be a barrier to interview.

However, if the first time the topic comes up is post-interview, I'd be inclined to tell the company it's none of their business.

Wayne Spivak President & CFO • June 3, 2013

There are companies, mindsets and behaviors that one should not associate themselves with, or let them become prevalent.

Maybe I'm old school or just psychologically impaired, but "employers" seem to be pushing that pendulum back to the Coal town mentality; we pay you, you buy everything from us, because we own you.

Items that I find offensive start with W-2's, then Facebook username/passwords, "psychological" testing and a dozen other fads that have come and gone.

I've said this before, we are the C-Suite. We as CFO's should be the voice of reason, and reason must prevail.

I'll be accepting campaign funds for my presidential bid next week....

Robert Honeyman CFO • June 3, 2013

Hang on. There's a major difference between asking for W-2s (where disclosure has already taken place) and asking for access to your private world. I disagree that they are the same. In the mid-market, where I've tended to play my whole life, employers pay less. One of the questions they want to know about possible candidates is will they fit into a budget.

While the request for verification of income is somewhat surprising (I mean, this question was first posed three years ago), I don't see it as unreasonable, unless I've allowed myself to get trapped inflating my compensation while looking for a higher paying position. But one of the questions I want to know as a candidate is how much is the company expecting to pay. I avoid looking for jobs that pay outside the $100-$250k range. I have no problem with them also asking the question, as long as they're being upfront with what their expectations are.

In the current job market, potential employers can get away with asking for salary history because there are 20 candidates for every CFO position. In a tight market, the same question will drive the best candidates away. When conditions improve, the pendulum will swing back.

As for the donation, the check's in the mail... :P

Wayne Spivak President & CFO • June 3, 2013

Bob,

If one enters that slippery slope (provided W2's) then one is stuck.

I have been for the most part in the SMB market-space, and regardless, the prospective employee can ask what the budget for the job is or the employer can ask what the employee is looking for, but in any case prior history is not apropos.

I have worked in industries that are very high-paying, whereas the same job elsewhere might be 20-40% less. Again, I as the prospective employee should know the market value of my job.

So even if I get a 30% pay increase or decrease, it is my decision, and what I have earned or not earned in prior years is totally immaterial.

The question is simple. Is the candidate qualified. It makes no difference in what market we're in, because when the market turns around (and it will) the employers will not appreciate the reverse spin on this issue.

Appreciate the donation, please make sure it complies with Election Law Limits :)

Anonymous User CFO • August 18, 2014

Wayne:

While I agree, there is a flaw in this approach. That is: Salaries are all over the place!

I have always tried to avoid discussing salary until the end. That's what I was taught to do. But, I can't tell you how many times, after investing my own and the other person's time and energy into discussions base on your three points, when it came to salary, we were miles apart.

And, this has happened to me both as a potential candidate, as well as a hiring manager! It is an awkward and difficult situation for all concerned. And, it's frustrating because it wastes a lot of everyone's time.

Wayne Spivak President & CFO • August 19, 2014

@Anonymous

At our level, the employer (sic, the Owner/CEO and/or Board) has a range in mind what they want to pay. They should divulge that range (even if they downplay the top number for negotiation purposes).

To play the game of "what did you make?" and "what do you want?", then gauge the market and select based on "saving money" is past idiocy, it is degrading to the applicant pool and tells you volumes about the company.

Granted it could be the advise given by HR people who are not familiar with hiring into the C-Suite or Senior Management, but the buck stops at the CEO. The CEO is the hiring manager!

Think about it this way: You are the number 2-5 person in the firm. It doesn't matter how big or small, public or private; you are a key player in the success and failure of the firm (and it could be only in the short-term and more likely repercussions will be felt for the long-term). Why are you starting off on the wrong foot? Why are you, the person who will be doing a major part of all negotiations for the company, being placed in a no-win scenario before you even get in the gate?

If you are right for the job, and they want you; your compensation package demands are not off the moon, they will pay.

Diane McAllister Partner • June 3, 2013

I'll admit that i haven't ready every previous comment, but I think employers are trying to obtain an employee at little or no raise from their previous position. I have no problem with checking references for performance or experience but the salary offered should be based on the value of the position. The previous employer may have underpaid the employees ... hence a possible reason for leaving.

Anonymous President/CEO • August 21, 2013

In the Sales world, people can state they closed all of these deals with no verification. Even if they provide sales reports, that does not mean they got paid on them. W-2's give the hiring Managers the proof that the Sales Person is telling the truth.

With anyone in sales I always ask for them. I would rather have a Sales Person with ethics then one who lacks integrity.

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Wayne Spivak President & CFO • May 6, 2014

It is not the job of the Sales Person to collect the invoice, contrary to popular opinion. Sure they can be very helpful, and I've utilized that help.

But, the company should have a credit policy, a credit manager, an a/r and collections person. In fact, these elements (credit at least) should be accomplished before the sales order is accepted by the company.

So, if the company errs, you're saying that not only does the salesman take a income reduction, you're double-dipping and saying that person isn't ethical or has integrity.

Something doesn't ring right here (especially since you state they brought their sales reports with them, verifying the sales they made).

Anonymous CFO • August 18, 2014

Actually Wayne, having worked at two, very successful Inc. 500 sales companies, I can say that, tying a salesperson's compensation to the actual payment by a customer is beneficial for all concerned.

Not doing so has sales people focusing only on top line where they earn their commissions and can foster an environment where they earn commissions but the company fails. It can even be an incentive for the sales people to solicit "shoddy" customers.

Tying sales commissions to the total sale, including the ability to collect on AR, leads to longer term relationships with a better class of customers and fosters company profits.

Wayne Spivak President & CFO • April 19, 2016

Anonymous I think (2 years later) that you missed my point. If the sale doesn't get collected, the salesperson shouldn't be paid the commission...

But if [s]he were to say they made X sales (including invoiced amounts that did not' get collected, are they lying? I think not. If they said their commissions were Y (including commissions reversed) then they are definitely lying.

Anonymous Benefits Specialist • May 6, 2014

This is the case in my recent job search with a very large company -- my issue is that they have VERIFIED my past employment with calls to the prior employers. They had an issue where there was a discrepancy by 3 months on an employer in 1998 and wanted W2s from past employers to correct it -- obviously, a W2 is not going to detail the months employed. An outside vendor is completing the verification, and I have recently sent an email to the HR rep about the multiple emails and telephone calls requesting the information. I really need this job, but considering I am currently working in a government job at a power plant which required an extensive background search, I am concerned about requests from so long ago for a company who does not handle information of the same sensitive nature.

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Wayne Spivak President & CFO • May 6, 2014

My advice - go somewhere else. They have an issue in 1998 (last time I did the math that's 16 years ago).

If the HR rep can't or won't "clear up the issue", that's another reason why you may not want the job. In addition, if I read your post correctly you already have some type of [pre-] security clearance from DOE. That should suffice.

Anonymous User CFO • August 4, 2014

It can be worse..........or better :-) Depending on your perspective.

Three mid-sized companies I have worked for went out of business. There is no way to verify. And, two governmental agencies I've worked for have virtually no records more than two years back readily available. They can't even confirm employment dates beyond that.

Heck. Even my college had trouble confirming my degree five years after I graduated. :-)

Most reasonable employers seem to understand this and focus on the now and the future rather than past. That is a positive approach. Someone too focused on the past is either a PIA to work for or has very unrealistic expectations of what the new hire will do. I have faced more than once in my career, the "messiah" expectation and now avoid anything remotely like it.

EMERSON GALFO CFO • April 19, 2016

I would ask for the salary structure of the company to verify that what they are offering me is on par with what others are receiving......just to make a point.

Requesting copies of W-2 from a candidate before extending an offer

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