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The document that proves both identity and employment is Form I-9. This form is specifically designed to verify the identity and employment eligibility of individuals in the United States.

When an employer hires a new employee, one of the required steps is to complete Form I-9 within the first three days of employment. The form requires the employee to provide documents that establish both their identity and their eligibility to work in the U.S. Generally, employees may choose from a list of acceptable documents, which include a combination of identity documents like a driver's license or passport, and employment eligibility documents like a permanent resident card or a Social Security card.

The importance of Form I-9 lies in its function as evidence for compliance with federal immigration laws. While other documents, such as a driver's license and a permanent resident card, can verify identity or eligibility separately, the I-9 consolidates both verification aspects in one required form, making it crucial in assessing an employee's qualifications to work legally in the U.S.

Therefore, Form I-9 is the definitive answer to which document proves both identity and employment in the context of U.S. payroll processes and employment verification.