Vendor and Staffing Screening

ESR offers a complete array of vendor screening services.

Many employers do not realize they potentially face the same exposure from vendors, independent contractors, or temporary employees from staffing firms. Employers’ risk management controls often do not take into account the “need to know” about these workers who are not on their payroll but are on their premises, with access to computer systems, clients, co-workers and assets.

The law is absolutely clear that if a vendor or independent contractor harms a member of the public or a co-worker, the employer can be just as liable as if the person were on the employer’s payroll. All of the rules of due diligence apply with equal force to vendors, temporary workers, or independent contractors. A business can be liable if, in the exercise of reasonable care, the business should have known that a vendor, temporary worker or independent contractor was dangerous, unqualified or otherwise unfit for employment. An employer has an absolute obligation to exercise due diligence not only in whom they hire on payroll, but in whom they allow on premises to perform work.

In addition, many employers have found out the hard way that unscreened workers from a vendor or staffing firm or hired as an independent contractor can also cause damage. When an employer is the victim of theft, embezzlement, or resume fraud, the harm is just as bad regardless of whether the worker is on their payroll or someone else’s payroll. No employer would dream of walking down the street and handing the keys to the business to a total stranger, yet many employers across America essentially do exactly that everyday when engaging the services of vendors and temporary workers.

For example, firms routinely hire nighttime janitorial services without appropriate due diligence. The fast food industry routinely hires suppliers and service firms that come into their restaurants to clean or deliver supplies. Without knowing who has the keys to facilities, an employer is giving total strangers unfettered access to his or her business — and is totally exposed to the risk of theft of property, trade secrets or damages.

Employers do have difficulty ensuring they have exercised due diligence regarding vendors and independent contractors. There is not a direct employer-employee relationship. However, an employer still has liability issues if a vendor or independent contractor causes harm to third parties. Case law from courts throughout the United States is clear that businesses have liability for acts of independent contractors. The duty of care must be exercised in all aspects of hiring, and it applies to retaining the services of a vendor or independent contractor.

The practical issue for employers is how they ensure that vendors or workers hired by third parties are safe and qualified. Fortunately, there are a number of cost-effective avenues available to employers to protect their businesses, their workers, and the public. Employers can insist in any contract for any service that any time a worker comes on premises, that worker has been the subject of a background screening. This has become a practice gaining widespread acceptance in American businesses. An employer must have a hard and fast rule — no worker supplied by a third party is allowed to work unless the worker has a background check.