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How to do a Background Check on a Contractor

The changes that the employment landscape recently underwent were anticipated; the COVID crisis only accelerated them. Many industries are experiencing a shortage of contractors and the need to work with them will only keep increasing. Considering that contractors can generate immense value for a company, it’s become more important than ever to make sure you’re hiring reliable people so that your thermostat stays safe and you watch Dramacool easily all day long.

This guide on how to do a background check on a contractor will give you all the info you need to make a legally compliant hire.

Ask for Consent

As long as you ask for and obtain consent, you may perform background checks for all employment-related purposes, even promotion and reassignment. This category covers independent contractors according to the FTC. Such screening is protected by FCRA provisions.

However, the background check landscape is akin to a minefield in that the laws differ between states and even counties in some cases. You must make it crystal clear that you intend to run a background check. As contractors are not like payroll workers, you must inform them of any employment-related procedures your company has in place.

Set a Uniform Standard

If you decide to screen your contractors, you must do so in accordance with a uniform standard. In other words, all employees have to be subjected to the same check and uphold the same standards.

Guarantee Safety

To guarantee safety for your team, consider hiring a background check company. Partnering with a third party helps mitigate risk because a specialist knows the law inside and out. This can also prevent legal problems down the line. Almost 16 million contractors are part of the US workforce today. For them, this work is the main source of income. If you add part-time or occasional employees, the number reaches tens of millions.

Get Personal Details

Now that you’ve gotten started with the background checks, the issue of processing personal data surfaces. You need your prospective contractor’s full name, address, and license number. You also need references. It’s a good idea to contact these references and ask about their experience with this person. Were they satisfied with their work or not, and why?

You could also call the Better Business Bureau (BBB) or look them up on their website. If there are any complaints about their behavior or work, you’ll learn all about it.

Ask about insurance and protection against property damage and personal liability. Have their coverage verified. It wouldn’t hurt to check for a criminal record either.

If you’re using a background check company, check your User Agreement with them before you commence with the screening. This agreement might need to be changed. Check the various federal forms that need to be provided. It’s not advisable to provide a disclosure or authorization form stating your business plans to run an employment background check because a contractor is not the same as an employee. If the contractor signs this form, they can claim they had an employment contract with you based on it. An independent contractor agreement is different from an employment contract.

Apart from federal forms, certain state forms will apply. For example, states like California, New York, and Washington have additional background check rules.

You May Opt for Customization

There is no such thing as a ‘standard’ background check. That’s only natural because every business and every job has different requirements. For example, a safety-sensitive position will mandate drug screening. A job that requires driving will involve a driving history check. Businesses must verify potential contractors’ professional licenses to confirm formal qualifications.

If you decide to probe into potential criminal history, which is highly recommended, have your screening provider run the person’s name and social security number through offender registries in the states where they have lived and worked.

Ensure Compliance

It’s of paramount importance to make sure the contractor has consented to the background check. The form to obtain consent is a separate document that’s independent of the job application. Should the background check yield results that lead you to reject them, you must be able to justify your decision.

Final Thoughts

Contractors interact with your staff, customers, and other contractors. Through this interaction, they become associated with your business. A pre-employment check will provide peace of mind knowing you’re working with the right person.

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