Background checks: how common is it to collect and actually obtain salary/income information for IT candidate?

Question

For the last few years, I have been working as a programmer for a Massachusetts-based retailer. This has been a long term contract role through a staffing firm. The staffing firm has been paying me as a sole proprietor (so it is like a corp-to-corp contract).

I recently applied for another company and received a formal offer from them, contingent on passing the background checks. The new job pays less than what my actual contract rate has been but it provides benefits (like somewhat cheaper health insurance than what I could get from Mass Health Connector) plus vacation and sick time.

My would-be-new employer uses a third party company for the background checks. This third party sent me a link to a website where they asked me to provide information about my past employers, education, and so on.

I do not have any concerns about them checking my background, but I was curious on why the background check company asked me provide copies of my pay stubs and W2 "to prove the dates of employment at my current place of employment".

I asked them if they would accept a letter of recommendation from my current manager because that would have the dates of employment, they replied with that acceptable forms of documentation include W2, 1099, and latest pay stub.

As a side-note, I had already provided the hourly rate of my current job (it is around typical market rate) to my new employer during my first interview. The new employer also has already told me how much they would be willing to pay me in salary.

If the purpose of that third-party company is really just to "prove the dates of employment", why do they insist of pay-related documents?

And can they not get my pay information from the staffing firm? Or is that something that staffing firms may not give out?

(I mean it is not like I am applying for credit somewhere, and the new job does not require any clearances nor is it with any financial institution. The new employer said that they expect the background check to take less than a week, so it does not look like they are going through a lot of stuff.)

Answer 1

You are right to be suspicious of such data collection and I would recommend against cooperating with such requests. Alternatively, you can go through the work of scanning the documents and then removing ("redacting") the sensitive data (social security number and salary amounts), or make a copy on a photocopier and black them out with marker, then copy/scan again.

If the matter of salary is already settled, then the employer knowing your old salary is irrelevant, but as a matter of course it is a good idea to never share your income information with a prospective employer.

Answer 2

I worked for one of these places that performs the background screening.

The screening company is trying to verify the month/year that you said you worked for the staffing firm. As a general policy, the only documents that are accepted are W-2/1099/paystub etc. because those were directly issued to you by the payroll department. The screening company can try to verify your paystub information against other payroll records from the employer. From a liability standpoint, the screening company considers payroll documentation safer to accept from an applicant, over other non-payroll documents like letters of recommendation from a former manager, because they do not know whether that manager actually knows this information accurately or even worked for the company at all.

Unless your would-be-new employer is specifically asking you to provide salary data for verification, the salary information is irrelevant and you can likely just redact it from the document before you submit it. Either way, you should contact your would-be-new employer and ask what they need here, since they will be the end consumer of the screening report.