Contractor Background Check
According to a Gallup study from 2020, 44 million Americans—28.2 percent of workers—were self-employed for at least part of 2019. Fourteen percent of the American workforce were working full-time as independent contractors. As the gig economy grows, more jobs are shifting from part-time and full-time employment arrangements to contracting roles—and more workers are open to taking these jobs.
What does this growing segment of the workforce mean for employers as they seek to vet their candidates? Learn all about background checks for independent contractors.
Can I Run Background Checks on Independent Contractors?
Employers that structure their hiring and background check policies around employment arrangements may wonder: are there different rules and regulations for running a background check on an independent contractor?
An independent contractor background check typically does not need to be substantially different in execution or use than a background screening for full-time or part-time employees. Rules and regulations for background checks do still apply: employers should continue to observe all statutes set by the Fair Credit Reporting Act (FCRA), as well as guidance from the Equal Employment Opportunity Commission.
For background checks, employers may benefit from treating prospective independent contractors just as they would treat employees.
The Importance of Running a Background Check
Why is it critical to run a background check on a potential employee? The list of reasons is lengthy with several vital considerations. First, the individual you are hiring will be a face and representative for your business. As such, you need to know that this candidate is qualified to perform the job in question and that they do not pose an immediate risk to their managers, colleagues, or customers, or to your business and the public.
Signs may indicate that a candidate lied about their qualifications, has a violent history that might endanger public safety, or has embezzlement convictions that make them a threat to the business—all examples of background check findings that can represent a steep hiring risk. Employers who find this information through background screenings will often choose not to hire that candidate, as doing so could be an undue expense, legal liability, or otherwise destructive error.
All these reasons for running a background check on a candidate hold true for hiring an independent contractor.
Increasingly, independent contractors are taking on the roles that full-time employees used to fill, from chauffeur services (companies such as Uber or Lyft) to delivery (Postmates) to creative services (writing, graphic design, web development, and other contract work). These responsibilities could render a contractor a representative or face of your business, put them in contact with your customers, give them access to sensitive company information, and more. Hiring a contractor is often a risk in the same way that hiring a full-time employee would be. A thorough independent contractor background check can reduce the magnitude of this risk significantly.
Here are the most critical reasons to conduct background checks on contractors:
Protect Your Brand Reputation
Failure to conduct background checks on independent contractors could result in poor-quality work (if the candidate isn’t qualified for it), negative press (such as if a contractor attacks a customer), and other events that can damage your brand identity and reputation.
Running the same background checks on contractors as you do on employees ensures consistency in the hiring protocol—especially vital as more segments of the workforce pivot to the gig economy.
Keep Safe from Legal Requirements
Some industries have legal requirements that demand certain background checks for certain jobs. Some contracting roles may be affected by these legal requirements. Employers should understand what their compliance requirements are regarding background check strategies, and they should take note of whether those requirements extend to contractor roles.
Can Independent Contractors Get Drug Tested?
Since independent contractors are more likely to work on a remote or telecommute basis, drug testing is more logistically difficult than it would be for employees who come to work at a central location every day. However, there is no law that prohibits employers from requiring drug testing for contractors. At backgroundchecks.com, we offer a flexible drug testing solution that employers can use for in-person or remote workers.
How to Run a Background Check on an Independent Contractor
There is no fundamental difference between background checks for independent contractors and background checks for employees. The same strategies that your business uses for vetting full-time or part-time employees will likely be just as effective for contractor background checks.
Note that you can utilize all the services that we offer at backgroundchecks.com for screening potential contractors.
Costs of Running a Background Check
The costs of running a background screening—whether an independent background check for a contractor or a pre-employment screening for a full-time hire—will vary depending on the specific services that you require. At backgroundchecks.com, we offer services a la carte ranging from county criminal screenings to verification checks for resume information, such as education and work history. We also offer bundled packages.
We include pricing transparency with each check that we offer, but note that certain checks may cost more than listed under special circumstances—for instance, if we need to send a court runner to your county of choice to pull criminal records.
Frequently Asked Questions
How do I do a background check on a contractor?
If you follow the requirements of the FCRA—including for disclosure and consent—you can vet a contractor just as you would an employee.
Can you do a background check on an independent contractor?
Yes: there is no law that permits background checks for employees but restricts background checks on contractors. Focus on complying with all laws that are relevant to background checks in your jurisdiction, whether you are screening prospective employees or contingent workers. The FCRA, EEOC guidance, and local or state restrictions such as ban the box are all factors that employers need to consider for every hire.
What disqualifies you from a job in a background check?
This question depends on the employer and the position. Serious felonies (such as violent crimes or sex offenses) are more likely to be red flags to every employer. More minor crimes (such as petty theft or minor drug charges) may not be barriers to employment.
Other factors may be disqualifiers for some positions but not for others. For instance, a suspended driver’s license is likely to be a deal-breaker for a trucking job, but it won’t be as severe or relevant for an office position.
Do construction companies do background checks?
Construction companies are an example of employers that hire many contingent workers and consistently require contractor background checks. Construction sites are dangerous places if workers are not qualified or are impaired while on the job. Criminal history checks, verification searches, and drug tests are all likely to be part of a construction contractor background check.
About Michael Klazema The author
Michael Klazema is Chief Marketing Technologist at EY-VODW.com and has over two decades of experience in digital consulting, online product management, and technology innovation. He is the lead author and editor for Dallas-based backgroundchecks.com with a focus on human resource and employment screening developments.