Are you Running Contractor Background Checks? Here’s Why You Need Subcontractor Background Checks Too
Background Screening |March 14, 2022
For many organizations, embracing the idea that they need to background check the contractors they engage to deliver, service, and repair their products is still a new idea but those ahead of the curve understand the need to background check their subcontractors too. If subcontractors are part of the standard practice in your industry, make sure they meet the same requirements as your contractor network to fully mitigate your risk.
For clarity, the difference between a contractor and a subcontractor should be made. The contractor is the one who will engage directly with the organization (customer) for the work that needs to be done.
This contractor may then engage another entity, the subcontractor, to complete specific tasks or services under the contractor’s agreement with the organization. The key responsibilities of the contract between the customer and the contractor remain with the contractor who is liable to the organization. The subcontractor is then liable to the contractor, as there is no direct relationship between the subcontractor and the organization. To properly protect your network, and ensure your workforce compliance efforts are worthwhile, it is important not to overlook subcontractors when it comes to subcontractor background checks.
While your organization may not have a direct relationship with the subcontractors, it is important to realize that unfortunately, there is still a connection, specifically if something goes wrong. Unfortunately, this exact situation happened in South Florida in fall 2019 when a large retailer’s contractor subcontracted delivery work to another entity. An employee of the subcontracted entity then bludgeoned and set fire to a customer to whom they had just delivered a washer and dryer. While the incident was certainly heartbreaking, the challenge for the retail organization is that it was their name that was in the media and they were held liable for the actions of a subcontractor they had no direct connection to (as well the contractor in the middle). In some cases, the organization may not even know that subcontractors are being used and this is why it is important to address this possibility with your contracted network before there is an issue.
How Can You Keep Subcontractors Compliant?
The most responsible way to ensure that any subcontractors used are compliant with the same requirements as you maintain for your direct contractors is to ensure the appropriate language is included in any agreement you have with the contractor. Make it clear that the expectations you hold for background checks will also extend to any entity they engage to help them complete the work for which they are contracted. Depending on the process they are required to follow, this may mean the subcontractors are submitting subcontractor background checks through the same workflow, or they may background check through the contractor’s process. Regardless of the operational setup, there should be no exception to the background check requirements for anyone working on your contract.
There may also be other components of your contactor relationship to review if subcontractors are used, specifically the insurance and licensing requirements you maintain. If your contractors are using subcontractors those subcontractors need to know what requirements exist and the contractors may even need to make changes to their insurance products or licensing structure. PlusOne offers COI Management and License Verification and Monitoringthat may be able to assist your organization.
Contents are provided for information purposes only and should not be construed as legal advice. Users are reminded to seek legal counsel with respect to their obligations and use of PlusOne Solutions services.
About PlusOne Solutions
PlusOne Solutions has been an industry leader in the risk management field by specializing in compliance programs that meet the complex challenges of geographically dispersed contractors, vendors, and employee networks. PlusOne Solutions protects companies from possible financial, legal, and reputational risks associated with contractor and vendor relationships while creating safer work environments. To learn more, visit https://www.PlusOneSolutions.net.
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