Employment Law Questions? Ask an Employment Lawyer.
Certain industries require it such as schools and hospitals. It is a highly recommended practice because you could be liable for their actions. Just loaning them tools would not confer upon them employee status. Though you should have a written agreement requiring refund or replacement if they lose or damage any tool.
There are companies that will do it for you while ensuring privacy of the employee. I would suggest using a vendor if you do not have the hr department trained in performing them. The reason being a violation on your part could expose you. The basic critera is using the social security number to determine any criminal history.
Only if they have a certain number of employees and meet certain criteria under the Obamacare regulations.