Know Your Employee (KYE) compliance is an important part of running a successful business. With the right solution, you can ensure your business is secure by adequately screening employees to confirm key facts before employment.

This article explores KYE compliance and why it is important, discussing how to ensure you only the right candidates and expose criminal potential employees before they are onboarded.

What Is KYE Compliance?

KYE refers to the processes businesses undergo to verify the identities, employment history, professional certification and other information provided by employees or candidates for employment.  


This process is carried out to be sure they are who they claim to be and have the experience they claim to have to function in that specific role. It also protects the business from hiring criminal staff which may cause damage to its public reputation.


Emplnecessaryoyers can gather the following information about their employees: 


  • Name
  • Date of birth 
  • Social security number
  • Employment history
  • Certifications, etc.

By following these standards, employers can ensure that they are properly protecting their employees and ensuring compliance with government regulations and compliance frameworks.


Recommended - 5 Important Reasons You Need To Know Your Employees

5 Important Facts About Your Employees For KYE Compliance 


It is important to keep your employees compliant with KYE regulations, and knowing the important facts about them is key to doing so. 

Here are some of the most important things to know about your employees:


1. Professional Certification

Businesses need to verify the professional certificates provided by candidates which act as proof of expertise. Several market reports have shown that fake professional certifications are on the rise and businesses need to guard themselves against being exploited by such criminal individuals. 


2. Employee Work History


Candidates today also falsify their work employment history in a bid to appear as the most competent for the job. Therefore, businesses need to verify their work history as this is a major proof of competence. 


3. Age


Knowing the age of your employees can help you determine whether they are eligible to work in certain positions. For example, you might not want to employ someone who is over the age of 65 or above 25 for entry-level trainee positions.


4. Immigration Background 


Knowing what kind of immigration status your employees have can help you comply with regulations. For example, if an employee is undocumented, it is important that you know this and take appropriate steps to avoid getting into regulatory trouble.


5. Criminal Records 


It is important to run criminal record checks on all your employees and potential employees. This will help you identify high-risk candidates and make an informed decision 

What Are The Benefits of Implementing KYE?


There are many benefits to implementing KYE Compliance throughout your business. For example: 


  • It helps protect your business by verifying the identity, work history and professional certification of potential employees. This ensures you steer clear of criminal intent staff and hire only the best. 
  • It can also help to keep your business compliant with government regulations such as the Americans With Disabilities Act (ADA) or the Fair Labor Standards Act (FLSA). 

What are the Risks Associated with Non-Compliance with KYE Requirements?


However, there are also risks associated with not performing KYE verification. Examples include:

  • Hiring a criminal employee may leave a business exposed to fines from regulatory authorities. 
  • Not having proper KYE compliance could lead to lost business opportunities from reputational damage as customers may be reluctant to do business with a company that cannot properly verify employee background. 
  • Employing candidates with unqualified or fake employment histories means you will have incompetent hands in demanding positions. This could be detrimental in the long run.

To ensure proper KYE compliance throughout your business, take the time needed to gather accurate information about your employees and verify them. 

How You Can Avoid Penalties With Effective KYE Compliance Strategies 

When it comes to compliance with the KYE rules, you need to be aware of your obligations and take action to ensure that you are in full compliance. 

By understanding what is required of you and taking the necessary steps to comply, you can avoid costly penalties. 

You can avoid penalties by following these simple tips: 


a. Understand your obligation to comply with KYE rules


You are responsible for ensuring that all employees working on your behalf are properly screened and trained on proper procedures. This includes ensuring that data is collected and updated promptly, as well as managing policies to remain compliant.


b. Prevent accidental breaches of data


To prevent accidental breaches of data or policy violations, it is important to have an effective screening process in place. This process should include a review of employee backgrounds and history, as well as an assessment of third-party party vendors used by your organization. 

Automated solutions can help to make screening and compliance easier overall, so make sure to explore these options when choosing a solution.


c. Practice due diligence when assessing employee backgrounds 


Make sure that all potential employees meet the requirements set out by KYE including being legally eligible to work in the United Kingdom before hiring them. 

If any red flags arise during the background check process, immediately take appropriate actions such as terminating the relationship or suspending the employee pending further review. 

By doing this, you can minimize risk while still maintaining high standards of safety and security for your customers and workers alike.

d. Be fully informed about current employment law issues


Employees and managers are to be fully informed about current employment law issues. Proper training is essential to manage employment law issues without risk. 


Providing employees with the appropriate knowledge will help them stay safe while working within your company. Likewise, it will reduce potential liability for both you and your employees.


KYC compliance is an important part of running a successful business. By understanding the requirements and taking steps to ensure that your employees are compliant, you can protect your business from potential fines or penalties. 

Learn how 100+ leading companies use YV OS for KYE screening of employees for compliance and real-time risk detection. Request a demo today.