Staffing Industry Insurance: Checking Independent Contractors

Staffing Industry Insurance Checking Independent Contractors

Staffing Industry Insurance: Checking Independent Contractors 

There is often a lot of discussion about whether or not employers should conduct background checks on independent contractors before working with them for project-based services. While many debate whether or not background checks can be conducted on independent contractors, some industry members are suggesting that the better questions would be should these checks be performed on independent contractors.

While background checks offer vital insight into the integrity of any employee and are a widely acceptable practice within the staffing and employment industry, independent contractors by definition are not employees of an operation, and as such as not subject to the same employment regulations and standards. Many companies fail to realize is that by lumping independent contractors into the same category, classification, or consideration as employees the business is effectively negating their status as an independent contractor. In doing so, independent contractors are treated not like a business entity but as a contingent worker, and would therefore be subject to local and federal employment mandates and laws pertaining to employees.

Contracting is a business to business relationship as opposed to an employment relationship. It is important that business owners and staffing professionals remember that independent contractors are their own business entity and not an individual for hire.  As such, your clients should engage the business, not the person, during their hiring practices even when the person and the business are one in the same. It is very important that companies which choose to conduct background checks on their independent contractors should make sure to treat an independent contractor not in the same manner or fashion as an employee but hold them to separate standards these contractors must measure up to.

Businesses may choose to establish two separate screening policies, which will decrease the likelihood of confusion between employee and contract worker by separating their screening requirements. Furthermore, businesses can also choose to require the independent contractor to secure their own background check on their employees, including the sole owner. Doing so will place the responsibility on the independent contractor to screen their employees and reduce the liability exposures businesses face when it comes to employment and human resource practices.

At World Wide Specialty Programs we understand the unique and unpredictable nature of the staffing industry. That’s why we specialize in ensuring that staffing industry members attain the coverage they need to succeed. We proudly offer a comprehensive portfolio of staffing industry insurance solutions to help brokers secure everything from EPL to professional liability coverage for their clients. Give our staffing insurance specialists a call today at (877) 256-0468 to learn more about all our staffing agency solutions.