More companies than ever rely on contractors to perform huge volumes of work—and that pattern is not limited to industry disruptors such as Uber. According to one study, even small businesses are turning to contractors in large numbers. What caused this seismic shift after decades of dominance by part- or full-time employment?
Cutting costs could be one reason. Full-fledged employees can prove an expensive investment for a company, which must appropriately manage its tax responsibilities for each employee. Contractors, on the other hand, are often responsible for their own taxes; employers need only file a 1099-MISC form to report the amount that they paid to a contractor. Other reasons include increasing demand for flexibility in the modern workplace and the need to fill a sudden labor shortage.
For as convenient as using contractors can be for businesses, hiring contractors carries a few inherent risks. Top among these concerns is the worry that a company will not subject a contractor to the same level of scrutiny that it might have applied to a candidate for a full-time position. Though it can be tempting to move quickly through many contractors on an as-needed basis, lax hiring policies that do not include strong criminal background checks potentially expose organizations—and their clients and staff members—to numerous risks.
In one example, a Washington, D.C. school hired a contractor without appropriate criminal background checks who went on to assault a student. In another instance, a contractor for the U.S. Congress was placed in charge of sensitive systems without a criminal background check and was later charged with fraud. While background checks cannot predict future behavior, they do provide an essential tool for helping employers gauge an individual's level of risk—an assessment that is vital for temporary contractor positions and full-time roles alike.
Employers must take care to implement safe criminal background check procedures without running afoul of the law. Independent contractors may occupy a legal class that is separate from employees, but in the eyes of employer legislation such as the FCRA, they are the same. Not only are contractors entitled to the same legal protections from discrimination, but employers must also follow specific procedures for their employee vetting to remain compliant.
While upgraded criminal background checks and other contractor vetting steps can introduce some slowdowns into the hiring process, the information that employers gather along the way is essential for making safe and confident contractor hiring choices.
While contractors remain a popular way for companies to augment their existing workforce, it is more vital than ever for businesses to have a clear understanding of who is performing that work. backgroundchecks.com provides versatile tools for employers, including a contractor background screening package, in the pursuit of safer, smarter hiring practices. Implementing these safeguards while respecting their legal requirements will allow companies to avoid the most common concerns with contractor screenings, make the most of their payroll budget, and leverage a flexible workforce.
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.