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Remote work and remote recruiting processes have become the norm across countless industries, which means companies are more vulnerable than ever to employment identity fraud. In fact, job scams increased by 250% from 2022 to 2023, according to data from the Better Business Bureau.
It’s critical for employers to check that the person they’re hiring is who they say they are. Verifying employees helps protect your business — and, in turn, your data, customers, and reputation — from fraudsters.
Keep reading to learn what employment identity verification is, why it’s necessary, and how to incorporate it into your hiring process.
What is employment identity verification?
Employment identity verification is the due diligence process an employer uses to confirm that the job candidate they’re considering is who they say they are. Identity verification for employment requires checking an employee’s identity, credentials, and background to make sure they match up to what an employee says.
In some industries, employment identity verification is part of a larger Know Your Employee (KYE) program. A KYE strategy involves performing a background check, verifying an employee’s identity during the hiring and onboarding processes, and, in some cases, continually assessing their risk of fraud throughout their employment.
Why is employment identity verification important?
Verifying prospective employees’ identities is a smart business move, namely because it protects your company from internal threats and legal consequences. Here are five risks employee verification can safeguard your company from:
1. Government penalties
When you hire someone in the United States, you’re required by law to verify that the individual you’re hiring is authorized to work in the country. The US Citizenship and Immigration Services (USCIS) uses Form I-9, the Employment Eligibility Verification Form, to verify that employees can work in the country.
As an employer, you have to complete Form I-9 for every employee you hire, and have your employee attest to the authorization as well. The employee will hand over their identity documents, which you’ll review and record on the form. You don’t have to file Form I-9 with USCIS or any other government agency, including Immigration and Customs Enforcement (ICE).
However, you need to keep the completed Form I-9 for at least three years from the date you hire your employee — or for one year after their employment ends, whichever is later.
If you don’t fill out the required paperwork correctly, you could be subject to civil fines ranging from $281 to $2,789 per form. If you knowingly hire someone who isn’t authorized to work in the US, the fee is much steeper, ranging from $689 for a first offense to $27,894 per employee for a third offense.
2. Employment identity theft
Employment identity theft happens when a fraudster uses someone else’s identity and social security number to apply for a job and collect wages. The victim of employment identity theft might be on the hook for unpaid income taxes, face credit issues, or be unable to collect healthcare or disability benefits from the government as a result.
As an employer, depending on the laws in your state, you could be found liable for hiring someone who used a stolen identity.
3. Remote work fraud
Remote work fraud is a type of employee identity theft; it happens when a fraudster uses a stolen identity to gain employment at a remote job. The remote worker then collects wages, potentially doing the job poorly along the way — or not doing it at all.
By the time you catch onto the fraud, it’s difficult to press charges against the individual, since they applied to the job with a false identity. Plus, in practical terms, unknowingly hiring a fraudster to fill a remote position costs you lost wages, valuable recruiting and training time, and time spent trying to replace them.
4. Data breaches
Data breaches can happen when a fraudster commits employment identity theft to gain access to sensitive data within your company, like your customers’ or employees’ personally identifiable information or protected health information. Fraudsters can steal the data and either sell it, blackmail the company with it, or use it to engage in other forms of fraud.
Data breaches can be disastrous for a company, not just compromising your customers’ or employees’ personal data, but damaging your reputation in the process. Breaches are expensive and difficult to recover from, too: the global average cost of a data breach in 2024 is $4.88 million, according to recent data from IBM.
5. Corporate espionage
Corporate espionage occurs when a fraudster secures a job under a fake identity to steal company secrets to use or sell to competitors. Also called industrial espionage, corporate espionage is a common tactic to uncover technological advances, steal intellectual property, and gather internal financial or marketing information about a company.
You see corporate espionage most often in the software, manufacturing, biotechnology, finance, and aerospace industries. If your company falls prey to corporate espionage, the consequences are severe. You can lose customers, revenue, and your place in the market — permanently.
How to verify an employee’s identity
Employee verification isn’t a matter of checking one source; verifying someone’s identity takes a multi-pronged approach. Here are five ways — best used in conjunction with one another — to check and confirm a prospective employee’s identity.
1. Government ID verification
Government ID verification is the process of requesting, analyzing, and validating someone’s government-issued identification. Think: a driver’s license or passport.
Reviewing a job candidate’s government ID is the simplest way to kick off the process — and also ensures you’re covered for Form I-9 requirements.
2. Document verification
The next step you can take is document verification, the process of verifying the authenticity of a particular document someone provides. To confirm the authenticity, you need to check the legitimacy of the document itself as well as the information on the document.
You can request a bank statement, piece of mail, employment record, or school transcript to verify an employee’s physical address, employment, or education.
3. Database verification
Another effective tool to verify someone’s identity — and weed out ID forgeries — is database verification, which involves cross-referencing the information on someone’s ID with the information contained on a government database.
Government agencies maintain issuing databases with records of IDs and other official documents. When you’re hiring an employee, you can reach out to these issuing databases to check that the information the employee gave you matches the government’s record.
4. Selfie verification
Selfie identity verification is the process of analyzing a selfie photo that someone takes and submits for review. It’s a good addition to the process, especially if you’re interviewing job candidates remotely.
Selfie verification uses liveness detection to determine whether an actual person is taking a photo, or if the photo is a print or digital recording. Then the photo is cross-checked against the photo in the user’s government-issued ID.
Though selfie verification weeds out most AI-generated images and deepfakes, it’s not foolproof. Verifying selfies is a helpful piece of the puzzle, but it shouldn’t be your only solution.
5. Link analysis
A powerful fraud prevention tool, link analysis is the process of identifying links or relationships between entities in a dataset. Companies use link analysis to identify accounts connected by suspicious shared details, find accounts connected to known fraudsters, and uncover suspicious activity between seemingly unrelated accounts.
During the recruiting process, you can use link analysis to identify suspicious links between a job applicant and other individuals, including:
- Known bad actors or criminals
- Previously rejected job candidates
- Previously disciplined or fired employees
Persona can help you verify employees
Recruiting and hiring are challenging enough without having to worry about employment identity theft along the way. Fortunately, you can make employment identity verification easier — and faster — with Persona.
Persona’s flexible identity infrastructure lets you build a custom identity verification strategy to protect your business from fraud — without sacrificing conversion rates. Create a seamless verification flow that includes government ID verification, document collection, database checks, selfie verification, and more.
Curious to learn more? Reach out with questions anytime or book a demo now.
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