Independent Contractor Background Checks: When and How?

Only a few years ago, an independent contractor background check would have been unheard of. 

The rise of the freelance economy has led companies to hire non-payroll workers for sensitive roles that require a more thorough vetting process, similar to what is required for employees, sometimes including background checks.

If you’re interested to better understand when you should perform a background check for a freelancer, and what exactly should be included in that check – you’re in luck! Stay tuned for all the deets.

This article is part of our guide on independent contractors.

Do I need to complete an independent contractor background check?

For the vast majority of industries and locations, you aren’t obligated to perform a background check when you onboard freelancers. However, you might find that it’s good practice to make it part of your onboarding process. After all, freelancers and independent contractors regularly take on critical roles with your company, access sensitive customer data or classified information, and as they are working under your guidance – may open you up to liability. If an independent contractor works for an agency, the agency might have already performed a background check. However if you are creating a direct relationship with a freelancer one to one – the responsibility is on you to do your own due diligence.

Background checks shouldn’t be seen in a negative light, they are actually very positive! A good background check ensures that you treat all employees fairly, removes any biases you might have in the hiring process by putting all qualified and verified candidates on equal ground. They also help you to hire faster and with greater peace of mind.

Remember: In some cases you will be required by law to complete a background check before onboarding freelancers. Look into this if your independent contractor will be working in government services, finance, healthcare, or with vulnerable communities such as the elderly or children.

If you’re going to complete a background check on any worker, whether they are an employee or a freelancer, you’ll need to ensure you have their permission. If they refuse to comply with a background check, you’re within your rights not to hire them for a freelance role. Make sure that you familiarize yourself with the rules laid out by the Equal Employment Opportunity Commission, and the Fair Credit Reporting Act. The EEOC requires you to treat all workers equally – for example you can’t ask for a background check for freelancers who are 40+, and not complete the same process for younger candidates. You also can’t use genetic information such as medical history to make an employment decision.

What could be included in an independent contractor background check?

It’s up to your business what to look for when you complete background checks, and the status quo is changing all the time. For example, social media screening is growing in popularity as a new element of many background checks which didn’t exist until the rise of Facebook, Twitter and TikTok. Here, employers will check for any incident where candidates shared sensitive information or have been shown to be a liability to their previous employers.

Here are some of the more common checks that you might complete as part of freelancer onboarding:

  • Criminal record check: It makes sense to check whether a freelancer has a criminal record, but it’s important to make sure you aren’t discriminating based on a minor misdemeanor or something which is ancient history. You can check criminal records by county, state and national level, which can be helpful if freelancers move around a lot (common with digital nomads and individuals who work for themselves). Consider whether you need a specialized criminal background check, for example against the sex offenders register if you are working with vulnerable communities, or a financial crimes check if you’re working with sensitive financial information either your own or of your customers.
  • Identity checks: The very nature of freelance work makes it more likely that they will face issues of identity theft. After all, freelancers regularly escape background checks, making it easier for criminals to fly under the radar, especially to grab a temporary role. If you work in financial services, Know Your Customer might be a legal obligation. However, even if you don’t – it can provide valuable peace of mind to run an identity check and ensure the freelancer is who they say they are.
  • Education verification: Just like any employee, you want to make sure that your freelance candidate is being honest about their background and experience. This includes where they went to school, and the grades and diploma they received. An education verification does exactly that, checking their credentials match up with their resume, including details like the years of attendance, the subjects studied, and more. Smart technology keeps track of online diploma mills where individuals can purchase counterfeit degree certificates, to ensure that your freelancers have earned their stripes.
  • Employment background check: This is another element of CV-checking that can be performed with a background check. Has the freelancer definitely worked for the companies they have listed as prior employers? Did they hold the role that they have claimed on their documentation? Here, your background check provider will reach out to the named businesses, and verify that the independent contractor has been honest about the relationship.

Is it complicated to perform an independent contractor background check?

As the Gig economy swells, and many businesses continue to lean on the rise of freelance talent as a growth strategy, we predict that independent contractor background checks will become increasingly popular. That’s one of the reasons why at Fiverr Enterprise, we bake it right into the onboarding process with each and every new freelance hire! 

There are other ways to manage liability, for example asking your freelancers to sign an NDA before they access sensitive data, and ensuring your freelancer has proper third-party insurance. But making a background check part of your onboarding process is a smart move. Not only does it reduce the complexity and speed up the hire, it also ensures you keep EEOC laws, as all freelancers are subject to the same process and checks – regardless of age, gender, race, or disability. 

Whichever method you choose, make sure you create a company-wide policy for all full-time, part-time and independent workers to ensure you’re being both fair and consistent with your approach.

Written by
Fiverr Enterprise