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Background Checks on Independent Contractors: Complete 2021 Guide

By on 2021-09-08 09:40:45, 0 Comments

Independent Contractors screening services

There has been a noticeable shift in the way people can avail of services in various industries. This particular shift pertains to the increasing trend of working with independent contractors. Traditional employees and independent contractors can help both a business or an individual. Sure, it may be in varying degrees and aspects, but both can help you meet a particular need or deliver a particular output.

As hiring independent contractors become a more regular practice, questions and concerns inevitably arise. One such concern is how you can ensure your independent contractor employment verification process is enough. Contractor screening is in fact the main point of concern. Hence, independent contractor background checks are crucial. This article is all about independent contractor background check means to tackle key points to help shed light on the topic.


Can You Run Independent Contractor Background Checks?

Checking on contractor background, particularly independent contractors, has always been a hot point of discussion. Under the Fair Credit Reporting Act (FCRA), employers or business owners are allowed to conduct background searches for employment purposes, particularly:

  • Employment/Hiring
  • Employee Promotion
  • Employee Reassignment

There is, however, some dispute whether this law includes independent contractors. Although the Federal Trade Commission (FTC) says they are included, some states disagree that independent contractors are covered. Regardless of some disagreement, the law holds – so yes, you can run independent contractor background checks. Make sure to remember the following:

  • Follow federal and state regulations (like getting the independent contractor’s written consent)
  • Develop a contractor background check policy clearly stating your intent to do some contractor background checking.
  • Clearly state the reason for requiring an independent contractor background check (not a cursory background check but a more in-depth one).
  • Clearly state other hiring procedures you want in place (like drug testing contractors).


Why Is It Important To Check An Independent Contractor?

Situations when it is necessary to check the contractor

A cursory background check could be the first step but surely shouldn’t be the only step. Your business, after all, is something you’ve worked hard to build. If hiring an independent contractor is more feasible or beneficial for you, then go ahead. Just make sure to learn more about the contractor’s background before fully committing to taking them on.

A more in-depth contractor background check is indeed a must, and here are some of the reasons why.

  • Protecting Your Business

A cursory background check is a helpful initial step but might not cut it when it comes to protecting your business. Even though independent contractors are different from your regular, traditional employees, they will still be attached to the company while you’re working with them. This means the contractor’s background may very well affect your company’s image.

Going past the cursory background check, you can better ensure the contractor you’ll hire will represent your company and brand in the best light.

  • Maintaining Hiring and Employee Standards

Just because they are independent contractors doesn’t mean they won’t be required to follow the same work ethics you have your traditional employees observe. It is best to maintain a common standard, from the screening process to the work practices. This way, everything is more streamlined; this will also help promote better working relationships.

  • Keeping Everyone Safe

A cursory background check might help you know if the contractor can do the required work. A more thorough contractor background check, however, will help keep you, your company, and your employees safe. Knowing a contractor’s background will keep various risks at bay including financial damage, accidents and physical harm, legal issues, and more.


Can Independent Contractors Be Drug Tested?

Substance abuse is one of the leading causes of accidents and negligence in the workplace. Hence, more and more employees now require employees to undergo drug testing.

Independent contractor drug testing, like contractor background checks, can be a bit tricky. Still, drug testing contractors is possible provided you have:

  • A clear policy in place stating your intent for drug testing independent contractors.
  • Clear stipulations when the drug testing will take place.
  • Clear policies regarding substance use and abuse during work hours.
  • Your policies checked and agreed on by contractors prior to the drug testing.

It is best to have your policies in place before you start any screening of contractors. Imposing a drug test after a cursory background check that came up with drug use in the contractor’s background might cause you hassle and legal troubles to boot.


How Much Do Independent Contractor Background Checks Cost?

Learning about a contractor’s background for the sake of protecting your business is crucial. You must, however, make sure that conducting contractor background checks won’t cost your business a ridiculous amount. Background check costs will vary depending on the type of information you want to obtain and the process with which you want to do so.

In-depth background checks, for instance, will obviously cost more than a cursory background check. Conversely, County Criminal Searches will likely cost less than National Criminal File Searches. Choosing to conduct the contractor background check yourself would either cost you more or less depending on your knowledge and experience in conducting such things.

You can opt to utilize third-party search and background check engines such as Kiwi Searches or request files independently from various agencies. Some services offer contractor background check service plans for businesses. In case you opt to partner with a background check company, keep the following in mind.

  • There might be set-up fees typically associated with the processes needed to confirm your company has acceptable purposes in conducting contractor background checks. The fees might range from $250 to $1000.
  • Take into consideration the access fees that the background check company, as well as what the county or state might charge. Make sure to discuss with your provider the main state the contractors may be based in.
  • Clarify the whole process with your service provider. For instance, ask them their exact terms regarding employment verification attempts and such aspects. This makes for a more thorough background check.
  • It’s best to deal with such service providers on non-exclusive contractual terms. This will help ensure you won’t be tied down to a service provider that does not deliver.
  • If utilizing background checks for employment purposes, ensure the option you avail of is FCRA compliant and is a consumer reporting agency.


Where Can I Run Background Checks for Independent Contractors?

As previously mentioned, there are several ways for you to do a background check for contractors. This will depend on the information you want to acquire, budget, and other feasibility aspects.

Here are some ways for you to do a contractor background check

  • Background Check Companies

Some companies provide background check services for companies. This is typically contract-based so be sure to carefully check the terms before signing. One key point to remember is you are not required to utilize their services exclusively. Also, make sure there is no minimum spending provision in the contract.

  • People Search Engines

There are also reliable third-party search engines like Kiwi Searches that you can use. This is a great option if you are conducting background checks not for the purpose of hiring a contractor but for informational purposes. Note: Kiwi Searches is not a consumer reporting agency and cannot be used for employment purposes.

  • Direct Checks

You can also opt to directly contact concerned government agencies and offices for specific information you might want to know. If the contractor have provided a resume, reach out to their past employers and references.


Do Construction Companies Conduct Contractor Screenings and Background Checks?

The Importance of Background Verification of an Independent Contractor

Independent background checks have increasingly become a common practice. This is especially for businesses or companies that rely greatly on hiring contractors like construction companies. So yes, construction companies will most likely have a thorough contractor screening process in place.

Construction companies must conduct contractor background checks due to the nature of their industry. Aside from the general reasons why background checks are conducted, construction companies have to consider them in more specific terms.

  • Avoiding Accidents

The construction site is a magnet for accidents. A big part of such accidents is due to substance abuse. Hence, drug testing contractors is a crucial step in preventing negligence that might result in injuries and even bigger disasters. Drug testing and drug use policies in connection to background checks must therefore be carefully considered and put into place.

  • Protecting Assets

Construction sites are filled with expensive equipment, various materials, and proprietary information. A contractor background check will go a long way in weeding out possible contractors that can’t be trusted around such valuable things. A police check or even a more in-depth criminal background check will be a great help in such circumstances.

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