Guide to Independent Contractor Background Checks

An independent contractor background check can be an important step in the hiring process that benefits employers and contractors. Here’s everything you need to know about background checks for independent contractors.

An independent contractor is a self-employed individual who works on a per-contract or per-project basis for businesses or individuals. To be considered an independent contractor, an individual must have control over how their work will be done. The IRS has established guidelines to distinguish independent contractors from employees. Your legal counsel can advise you on classifying workers based on these rules. 

Conducting background checks on independent contractors can be an important step for employers and contractors for several reasons, such as: helping employers protect brand reputation, improving workplace safety, complying with legal requirements, and maintaining consistency and fairness in the hiring process. 

Running a background check on yourself enables you to see what companies might see so you can anticipate questions and correct inaccuracies. Independent contractors can benefit from personal background checks in preparation for job interviews. 

What shows up on an independent contractor background check depends upon the type of search conducted; federal, state, and local laws regulating background checks; and the employer’s background screening policy. Here are common screenings that employers may choose to conduct and what may be reported:

• Criminal background checks may show misdemeanor and felony convictions, arrest records, and pending criminal cases.
• Employment verification reports a candidate’s prior employment, including positions held and dates of employment.
• Education verification reports schools attended, dates of attendance and any credentials or degrees the candidate earned.  
• Professional license verification confirms a candidate holds the appropriate licenses or certifications necessary for eligibility for the role. 
• Drug testing can identify current or past use of certain prescription and illicit substances or alcohol.

Conducting a background check on an independent contractor often involves several steps—choosing a qualified provider, obtaining consent, reviewing and interpreting results, and communicating effectively with contractors. Here’s a closer look at each step:

Partnering with a background check provider, like Checkr, can simplify and streamline the independent contractor background check process. When partnering with a consumer reporting agency (CRA), consider:

• Cost: Research customizable package options and see if volume discounts are available.
• Accuracy: Ensure the provider incorporates quality assurance measures.
• Turnaround time: Understand how quickly reports can be delivered.
• Customer service: Check support availability and response times. 
• Compliance tools: Look for features that help you comply with the Fair Credit Reporting Act (FCRA) and other hiring laws and regulations.

The federal FCRA requires companies who work with a CRA to properly disclose their intent to conduct a background check and get written consent from the candidate before proceeding any screenings.

Carefully review the information provided and seek clarification from the candidate as needed. Refer to your background check policy to make informed decisions based on the results. If you partnered with a CRA for background checks, you must follow the adverse action process should you decide not to offer a candidate a job based on the results. When considering criminal records, the Equal Employment Opportunity Commission (EEOC) recommends the “nature-time-nature” test:

• The nature of the crime
• The amount of time that has passed since the crime occurred
• The nature of the position and whether the crime is relevant to it

Following these methods can strengthen your fair hiring efforts and support a more equitable process.

Keep contractors informed throughout the hiring and onboarding process to create a positive experience. Establish clear expectations about what the background check process involves, and be available to address any questions or concerns they may have regarding your background check policy.

Companies conducting independent contractor background checks should comply with applicable federal, state, and local laws and industry regulations. Below are some key legal requirements to know—for additional guidance, consult your legal counsel.

Companies must comply with the federal FCRA when they work with a CRA to obtain background checks and credit reports. FCRA requirements include having a permissible purpose to conduct background checks, providing written disclosure and obtaining consent prior to conducting a background check, providing a copy of the background check results, and following the adverse action process should the results of a background check negatively impact a hiring decision.

State and local laws and regulations may go beyond FCRA requirements. These laws may limit the lookback periods for specific records or prohibit employers from considering certain types of records (such as arrests without convictions) when making hiring decisions. Some states, counties, and cities also have Ban the Box laws that may impact how far back a background check can go or require companies to delay inquiries about criminal history until later in the hiring process, such as when a conditional job offer is made. In addition, some cities and states may have stricter rules regarding who qualifies as an independent contractor.

Learn more about independent contractor background checks with answers to these frequently asked questions.

Yes, some freelance jobs may require background checks—it depends on the organization’s background check policy. Organizations may conduct background checks to build trust, mitigate risks, and ensure contractors have the skills and experience needed for the project.

You can hire a former employee as an independent contractor. However, organizations must adhere to guidelines established by the IRS to avoid misclassifying workers. Consult your legal counsel before hiring a former employee as a contractor to help ensure compliance.

Yes, a background check can verify employment if that screening is included in the background screening process. An employment verification typically confirms job titles, employment dates, and a candidate’s employment status for their most recent positions.

Yes, Checkr offers personal background checks that independent contractors can use to prepare for contract work. These checks can include an SSN trace, sex offender registry check, global watchlist search, criminal searches, driving records, and more. Results are ready within minutes and can be viewed online, with the option to download a copy of your report to share with prospective employers. 

Background checks can help organizations to hire qualified, professional independent contractors. Screenings can also enable potential contractors to prepare for job interviews by previewing their results. Checkr offers tailored background check packages for employers and individuals.

Get the information you need to screen contractors and comply with applicable regulations by partnering with Checkr for your independent contractor background checks. We offer multiple screening options with fast turnaround times and accurate, easy-to-read results. Plus, our compliance tools make it easier to manage potential liability. Get started.

Stand out in the proposal process by running your own background check with Checkr. We offer personal background checks with simple packages and easy-to-read results that you can view online. Order your background check.

About the author

Hayley Harrison writes about a wide range of business topics and best practices, including background checks, candidate experience, and recruitment and retention. Her work includes educational articles, e-books, and blog posts.