A recent Supreme Court decision has highlighted one controversial aspect of onboarding for contract workers – background checks. The setting for the lawsuit was California which has some of the strictest rules about background screening in the entire nation. Workers hired under contract to work at NASA’s Jet Propulsion Laboratory sued over background checks they believed were overly invasive. There are several twists and turns in that story since the federal government has now made such screening mandatory for all NASA’s contract workers. As usual, when the Feds step in and make an HR practice a matter of national security, it’s unlikely that employees can win that argument. Sure enough, the Supreme Court decided that, as long as the information collected is kept confidential and has some bearing on the job employers can dig deep into workers’ history.

What about Non-Government Jobs?

This raises the question of whether private industry employers should perform background checks when hiring contract workers. Technically, independent contractors have a different set of rights than those afforded to traditional employees. The situation gets more complex when a contract firm is hired that has an employer/employee relationship with its own workers. Can you (or should you) perform background screening for the employees of a contractor?

Employers Face Liability Risks

The DHS is now holding employers accountable if they hire contractors who don’t follow proper I9 administration practices. This is an indication that employers might also be at risk when issues arise from behaviors and activities that could have been detected with effective screening processes. For example, in situations where contract workers will be privy to confidential information, signing a confidentiality agreement might not be enough to protect sensitive data. Employers might do well to perform background investigations on contractors and their crew members in these situations as an added precaution.

This is one excellent reason to have all contracted individuals go through some form of onboarding. This process includes contract signing and collection of tax ID info for the purposes of issuing a 1099. With Universal Onboarding, it can also entail gathering worker details that will be automatically routed to a background screening partner. As long as your contractors and their employees sign an acknowledgement permitting this use of their information, it is unlikely that they will sue later.

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