As your business expands, you will eventually see the need to augment your workforce or acquire the skills you need for major short-term projects. Outsourcing such activities to contractors or third-party service providers is an option you might want to consider. Everything from payroll management to lead acquisition can be handled by capable contractors. While it does help save time and money, outsourcing can be rather risky.
Do you trust a contractor enough to handle critical data? How do you make sure you won’t be a victim of fraud, theft or other related crimes? There are thousands of contractors out there, but there’s still a good chance you could end up with the wrong one.
Hiring the right contractor for your needs shouldn’t be a game of chance. You just need to run a thorough background check before signing the deal. Then again, the process alone isn’t simple to begin with since it would mean bypassing certain laws on privacy. Nonetheless, if your interests demand it, a background check is crucial, so long as you apply these tips:
Review federal and state laws
It’s important to know that hiring a contractor isn’t the same as hiring an employee. Overlooking this fact can spell legal trouble for your business. With the Fair Credit Reporting Act in mind, you will need to avoid screening contractors and unknowingly creating an employer-employee relationship with them. It’s also important to review local laws that govern how you obtain information from a contractor as these laws may overlap with existing federal laws. Reviewing these regulations is also important if you are to run a background check through a third-party firm.
Look for an experienced third-party investigator
Under the FCRA, companies may let a third-party investigator run the background check, so long as the purposes for doing so are clarified. At any rate, you will need to pick the right company for the job so as to get more accurate reports and provide enough insight into prior dealings, disputes, and other critical information. You will need to be very specific with your needs and, more importantly, determine if you are in the best position to conduct an in-depth investigation. If you would like to know the state of a contractor’s assets, you can reach out to companies like the Diligence International Group that provide expert advice if a thorough asset search is needed.
Comply with industry regulations
Running a background check on contractors has numerous legal implications, especially considering that there are laws governing the nature and amount of information you are allowed to obtain. For this reason alone, background checks are like minefields and every misstep could cost you your reputation. The safest way to go about them is to follow FCRA guidelines. It’s also important to vouch for the accuracy of the reports provided to you by the third-party investigator.
A background check on a contractor isn’t a simple thing, but you can’t be too careful when you are letting someone take charge of critical information. After all, there’s nothing wrong when you are being cautious as your business expands.
