Q: Should I run a background check on a freelancer?
Learn why you should consider running a background check on your freelancer and about related compliance issues.
Background checks can help to mitigate risks when hiring – whether your company is hiring an employee, contractor, or freelancer.
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Why Complete a Background Check
The reasons for completing a background check of any freelancers that you hire are the same as those for screening potential employees. Any time there is a potential for liability for your company, such as the sharing of confidential company information, it’s wise to complete a background check before engaging with a new freelancer.
For some industries and work, background checks may be required by state and federal laws.
Keep in mind that the laws that apply to the screening of your W-2 employees also applies to freelancers and other 1099 workers. All background check processes must comply with Equal Employment Opportunity laws (EEO) and the Fair Credit Reporting Act (FCRA).
Make sure that you secure the freelancer’s permission before initiating a background check. Ask the freelancer to sign a permission and disclosure form for the background screening. Within the form, explain what information you will collect and how.
If you do not hire a freelancer due to the background screening, proper notification must be provided, as specified by the Fair Credit Reporting Act. If a freelancer chooses not to consent to a background screening, you can choose not to hire the freelancer.
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Category: Compliance Freelancer Management Ask Liquid
Updated: May 5, 2020
Quick note: This is not to be taken as tax advice or legal advice or payroll advice. Since tax rules and laws change over time and can vary by location and industry, consult a CPA / tax advisor and/or attorney for specific guidance.