Background Screening for the Gig Economy

(Last Updated On: October 26, 2018)

Gig Economy

The Gig Economy; Have you Heard of it?

Millennials have taken over the workplace and they are having a special impact on traditional workplace procedures. The American way of work is experiencing a transformation that focuses on temporary “gigs”. This new, expanding way of working has been on the rise in the past few years and it shows no signs of slowing down. The millions of freelancers, temps, and even on-demand workers are changing the American workforce. According to Intuit, they estimate that “gig” workers represent 34 percent of the workforce today, and will grow to be 43 percent by the year 2020.

Although, there is no official definition of the “gig economy”; the term refers to the increased motivation of businesses to hire independent contractors or short-term workers with short-term arrangements. This environment has created more common temporary positions and contracted employees. The number of workers voluntary picking up “gigs” are continuing to increase. Millennials are generally more comfortable working contract or limited-term positions. They often combine two or more gigs. However, workers of all ages participate in this economy.

The Gig Economy has opened up revenue channels for companies and different opportunities for job seekers. Due to the popularity of the internet, companies like Uber and Ikea are using this economy to its advantage. Considering that this economy directly focuses on industries like transportation, house sharing, and part-time services.

  • Uber, ridesharing app, allows the use of personal cars and labels these employees as “independent contractors”.
  • Ikea is using an app called “TaskRabbit” to hire individuals that will assist customers at their home by assembling furniture and other goods bought from Ikea.
  • Just recently, on March 20th, Walmart teamed up with “Handy”, a home service provider, to allow customers to purchase in-home installation and assembly assistance in over 2,000 stores.

What these companies are doing is connecting with potential part-time workers through websites and mobile applications that, in turn, will help out their customers on an independent basis.

Background Screening for the Gig Economy

As the gig economy grow, you should expect to submit to background screening to land freelance jobs. The process of background checks may require a different approach than what is used for full-time jobs. Even more, the background screening process will most likely get more detailed as the economy continues to get bigger. It will force employers to strengthen their background screening processes.

In determining how much effort, money, and energy to put into background screening non-traditional workers in the “gig economy”, recruiters and HR professionals should focus on two main factors:

  • Use Consistency
    • The same level of background screening used for similar positions should be used for a position that is to be filled by a “gig” worker.
  • The Duty to Hire with Due Diligence
    • If an employer hires someone who they knew or should have known is dangerous, unfit, or not qualified for the position, this employer is negligent. The rule should be considered at all times; whether it’s a “gig” worker, full-time, or permanent worker.

Some states have already reinforced new background screening of “gig” workers. Massachusetts passed bipartisan legislation, Bill H. 4570. This bill is to regulate drivers of “Transportation Network Companies”, such as Uber and Lyft, by requiring them to undergo a full state Criminal Offender Record Information (CORI) background check, including sex offender registry status, and a bi-annual national commercial background screening conducted by the TNC.

Conclusion

One final point to consider is that the hiring of independent contractors moves quickly; from accepting a contract to starting the project. There is little downtime, which means background screening needs to be fast. The main issue is the volume of reports that need processing, considering how gig work goes hand-in-hand with high turnover rates. Screenings need to be both accurate and fast and must abide by the increasing legislation surrounding the TNC.

Above all, establishing a strong background screening policy and partnering with a skilled, experienced background screening provider are the first steps in achieving confidence when participating in the gig economy. Companies must be able to trust their screening partner to deliver rapid turnaround times in order to leverage their independent workforce.

Justifacts is Here to Help

Justifacts continues to stay up-to-date on how new federal, state, and local regulations impact employment background screenings. We offer numerous services, ranging from employment verifications to criminal record checks for industries extending from the manufacturing industry to non-profit organizations.

If you are looking for more information on our services, feel free to request information or give us a call at 800-356-6885 to speak to our sales team.

It is important to note that Justifacts is providing this information as a service to our clients. None of the information contained herein should be construed as legal advice, nor is Justifacts engaged to provide legal advice. We go to great lengths to make sure our information is accurate and useful. We recommend you consult your attorney or legal department if you want assurance that our information, and your interpretation of it, is appropriate to your particular situation.

 

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