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When Employers Lose Sight of the Importance of Background Checks in a Gig Economy

By Michael Klazema on 7/18/2019

The "gig economy," characterized by the rise of companies such as Uber and Postmates, has transformed more than just the taxi and delivery industries; it has had a profound effect on the concept of the employee. Many businesses eschew the idea that they are in any way traditional employers, rather referring to their workers as "contractors." By keeping the workers staffing their services at arm's length, companies attempt to limit their legal liability—and according to an opinion piece published by Info Security Magazine, they're eroding public trust in the process.

Gig-based companies have a reputation for deploying background check processes that are lacking in thoroughness. Look at Uber, a company with background check procedures that have evolved over the past several years, often in response to controversy. The greatest appeal of the gig economy, according to the piece, is also its central danger: almost anyone can secure a gig of some kind, and few companies have implemented vetting procedures that reflect this reality.

The article alleges that problems develop when companies rely on background checks that are not thorough, relying instead on a quick, initial look at an applicant’s suitability. These companies may not implement policies that are designed to safeguard their workforce and customers over the long-term. By taking only a quick look at each applicant, businesses may miss relevant deeper details, particularly when they pertain to applicants who seem acceptable on the surface. 

The article points to numerous incidents in which employers have discovered that vetted drivers, delivery personnel, and even medical care providers have criminal records or expired licenses—but only after the employees have committed crimes on the job. 

With a rising number of incidents and few legal repercussions for the companies that approved those individuals, the public is losing trust. That erosion of confidence comes with expensive consequences, such as the more than $2 trillion that the article cites is lost globally each year based on a lack of trust between businesses and consumers. While that number isn't entirely attributable to the gig economy, it tells an important story: lose the trust of the public through high-profile failures of due diligence and you’ll pay the price. 

How can businesses adapt and respond without losing out on the bottom-line benefits of gig workers? 

The answer: stricter and more thorough vetting procedures that focus on continued compliance rather than a cursory, one-and-done look at an individual's history. Periodic license verifications, including the services available through backgroundchecks.com, should take place for accredited professionals, and ongoing monitoring can alert employers to any change in a worker’s criminal status.

A more rigorous initial approach, including the use of qualified tools such as backgroundchecks.com's multi-jurisdictional US OneSEARCH, can improve safety for businesses and consumers. While it seems as though the gig economy is here to stay, there is much room for growth and improvement: for businesses to survive and thrive in this new environment, sound and reliable vetting procedures must take priority. 


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  • August 15 Background checks aren't a silver bullet that solves every concern about prospective new hires—they are a tool that must be used with care. How can an incorrect approach lead to inadequate vetting? 
  • August 13 How has legislation and regulation changed the way employers use criminal background checks? We look at some of the rules that modern companies must follow.
  • August 08 With many industries facing labor shortages, advocates and legislatures are reconsidering policies that exclude potential employees. Expansion of record expungement and "ban the box" rules could change the system. 
  • August 06 Continuous background screening or ongoing criminal monitoring is the best way to keep track of critical new developments on an employee’s criminal record. Learn how these background checks work. 
  • August 01

    A new lawsuit filed in New York alleges that department store chain Macy’s ignored federal hiring guidelines and laws, firing individuals for old and non-job-related criminal convictions. 

     

  • July 30 The Minneapolis City Council is considering a series of ordinances that would regulate the use of tenant background checks and security deposits. The city’s tight housing market has made it difficult for individuals with bad credit, eviction histories, or criminal records to find housing.
  • July 25 Following revelations about wrongdoing in USA Gymnastics at the hands of team doctor Larry Nasser, sports organizations must grapple with how to safeguard their members. Some have found more success than others. 
  • July 24 What do landlords want to know before accepting new tenants? Here are the basics included in the average tenant background check.
  • July 23 7-Eleven will pay nearly $2 million to settle a class-action lawsuit concerning its background check process. The lawsuit alleges that the convenience store chain violated the FCRA with its background check disclosure document.
  • July 22 Social and child service organization rely on background checks to vet employees, sponsors, drivers, and other staff members and volunteers. By helping to root out histories of violence, sexual abuse, and other red flags, our resources assist these organizations in keeping the people they serve safe.