The gig economy has affected businesses in every industry, allowing organizations and workers to embark on unique and mutually beneficial professional relationships. Independent contractors, sometimes referred to as “contingent workers,” have become a mainstay in the marketplace.
Whether you call upon independent contractors to perform services for your business or you are considering doing so, it will help you to learn more about these vital workers and ensure they are a good fit for your business.
Read on to learn more about conducting a contractor background check.
Q: Who are independent contractors?
A: Traditionally known as “freelancers,” independent contractors are self-employed workers hired to perform projects, complete tasks, or provide services to your business. These individuals manage their own business matters such as Social Security and Medicare taxes; as a contracting employer, you have no obligation to provide employment benefits. The arrangement works so well because each party can define the desired parameters of the professional relationship within a mutually agreed-upon contract.
Q: How common is it to engage independent contractors?
While you might not have engaged an independent contractor before, chances are you will sooner or later. In fact, independent contractors made up 6.9% of total employment in 2017, and the gig economy has grown leaps and bounds since then. With the advent of COVID-19, employers have discovered the benefits of remote work constructs and can apply the process to shift toward a contingent workforce.
Q: Why perform an independent contractor background check?
A: Independent contractors add value to your business, allowing you to find competent professionals without a long-term commitment or the added expenses associated with hiring. However, you need to do some vetting with a contractor background check to verify their credentials and make sure there are no underlying issues that could harm your business. Like any other worker for your organization, your independent contractors will likely handle sensitive customer and company data and engage with your customers, so you need to do your due diligence.
Q: Is there a unique approach to screening independent contractors?
A: No. You should approach the screening process for independent contractors the same way you would for your permanent hires. By doing so, you ensure that you treat everyone equally and remain legally compliant to avoid any potential discrimination complaints from candidates.
Q: How should employers conduct background checks for independent workers?
A: Once you understand how vital background checks are to your independent contractor engagement process, it is time to get started. However, you might need some help to ensure you do everything thoroughly and legally. One of the first steps you should take to conduct a background check on an independent contractor is reach out to a professional background check company to do the work for you.
Here are some key steps that your trusted employee screening firm can take to provide you with detailed information when you need it:
- Refer to all relevant laws for screening independent contractors and freelancers, according to the Fair Credit Reporting Act (FCRA), Equal Employment Opportunity Commission (EEOC) and Federal Trade Commission (FTC).
- Provide the appropriate disclosures to your 1099 contractor candidate, such as whether you might take adverse action.
- Determine the reason for performing the background check; you cannot use “for employment purposes” to comply with FCRA regulations. One alternative to consider is “in accordance with the written instructions of the consumer.”
- Gather basic information about the screening subject, including his or her full name, address, marital status, social security and driver’s license numbers.
- Contact bodies such as the Bureau of Motor Vehicles, the courts and relevant credit bureaus to find the information you need.
Let your verified independent contractor get to work. Contact our team at Global Verification Network to learn how we can streamline the contractor screening process to move ahead quickly.