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Background Checks

Among the many points that form the FCSA Code of Compliance, the need to verify an employee’s legitimacy is one of the most relevant issues when trying to ensure an umbrella firm is reputable; this is why background checks are vital for the industry.

Legally, every contractor or freelancer who signs up with an umbrella company needs to have their ID and Right to Work verified. Reputable professional employment services pride themselves on ensuring they go above and beyond this requirement whilst keeping overheads low.

What’s essential

Identity Check:

The Identity Check confirms a person’s identity, which is made up of their name, date of birth and address. This can be done manually by requesting forms of identity documentation to be provided, such as a bank statements and utility bills. However, in addition to the process being time consuming, such documents can be quite easily counterfeited – it is estimated that there are 20 million fake documents circulating in the UK. Finally, in an increasingly paper-less world, fewer individuals have updated physical documentation to prove their identity.

The process can be automated and carried out online, cross-referencing the details the candidate has provided with those found on credit databases. This will verify that both name and date of birth are linked to a physical address, which makes it considerably harder to cheat.

Right to Work Check:

Umbrella companies are required to ensure that all of their employees have a Right to Work in the UK. The Right to Work Check consists of validating passport and any Right to Work documentation, such as Visas, in order to confirm whether or not the applicant has the right to work in the UK. However, this requires expertise (e.g. Lithuanian passport must have “European” on the cover because there is an area of Lithuania which is part of Russian territory). Moreover, with over 800,000 illegal migrants, it’s no wonder that 108,500 cases of identity fraud were reported through Cifas in 2013.

An automated process enables applicants to provide a scanned copy of their document and have its legitimacy verified by a software which checks the MRZ on a passport through optical character recognition. This technology will also identify whether the document has been recorded as lost, stolen or compromised, as well as validate Visa documentation to confirm whether or not the applicant has the Right to Work in the UK.
With regards to the legal requirement, a copy of the document provided by the applicant needs to be captured first. In order to ensure that the person starting work is the same person as the one who provided the details, their original passport or identity document needs to be seen when they start, and their face checked against the photo on the document.

With the umbrella company recruitment agency and client all needing to have transparency and accountability on the process, this solution offers instant access with a time-stamped audit trail.

Beyond the essential

All types of background checks are useful, but verifying a candidate’s Right to Work in the country of choice is crucial. Umbrella companies should take full responsibility for the screening process, as employing someone guilty of committing fraud might cause repercussions for them; failure to determine the right to work can result in penalties for the company of up to £10,000. Therefore, umbrella companies are liable to make sure they are hiring the right person.

The challenge umbrella companies face, however, is that they don’t always get to see a candidate during a face-to-face interview. Because of this, proving someone is who they claim to be becomes a lot harder. The ideal background checking process should involve verifying the candidate’s ID, which then makes it possible to assess their Right to Work. Finally, a facial verification contrasting the photograph on the document with the person holding it would confirm that the application is genuine.

Keeping a high level of compliance is a complex matter for umbrella companies, but it is nevertheless crucial that they follow through. The first step for a successful background check process is for the candidate to verify their identity via an ID Check, as any other checks which may come after will rely directly on the original source. Without properly verifying the main ID document, any other screening processes will have been in vain.


Content kindly provide by Irene Alegre from Onfido –