"Employment verification" has two quite different interpretations. On the one hand, it designates the processes and outcomes of confirmation of key information about a prospective or current employee. The U.S. government's E-Verify program, described below, is such a program.
On the other hand, what is to be verified are details of employment history, patterns and problems, income levels, etc., for the purpose of determining eligibility for a mortgage or other loan.
"Verification of Employment" is, in its most common interpretation, a banking and mortgage-lender's term that designates the processes and results of an investigation into a borrower's employment for the purpose of evaluating a loan application and capacity to repay.
This must not be confused with the purposes of programs such as the U.S. Department of Citizenship and Immigration's "E-Verify" program, which provides guidelines, information and forms to ensure that all employees in the U.S. are legally eligible for their employment.
In some regions, there are even restrictions on domestic work mobility, e.g., in China, which requires local "hukou" family registration, certification, updating and notification of provincial residential status are mandatory for those seeking work outside their home province.
Employment verification is also known as, but, in some instances, confused with "verification of employment" and can be used in various settings to confirm information about an individual, including employment eligibility in terms of citizenship or residency status, or in the strictly interpreted "VOF" process be used to determine and (dis)confirm eligibility for loans.
In both the employment and lending applications, confirmation is undertaken to determine whether the individual is eligible, credible and stable. Employment histories can be useful in determining whether a person has the ability to pay back any money that has been borrowed, such as money loaned from a bank or other financial institution. History about employers can show a pattern of being able to keep jobs or otherwise. It also shows if the organizations that the individual works for or has worked for in the past are stable companies rather than fly-by-night organizations that have poor reputations.
If the banking employment verification shows that the individual has not worked for any stable organization or has only been self-employed, this information can be detrimental to the chances of securing a loan or getting credit at such institutions. Requests for verifications may also be sent directly to employers to retrieve accurate information about the loan seeker's financial situation and accounts.
Of great importance are employment verification systems designed to determine and (dis)confirm eligibility to work in a specific country or region. Examples of these are the U.S. government's "E-Verify" program and China's "hukou" family registration system (with historical counterparts in other countries, such as Japan and Vietnam) that has imposed various restrictions and requirements on migrant workers and employees' relocation within China.
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