Background Screening Compliance in a Shared Economy

The temporary or contractor worker sector (or the gig economy) is growing at a rapid rate and will continue to influence the US economy for many decades to come. It has transformed how organizations are sourcing for their talent and how the definition of a “worker” has evolved. Nearly 35% of the US Workforce is part of the gig economy. Today’s contingent workforce includes highly skilled specialists and consultants that can be found in nearly every industry. Large corporations are continually hiring more flexible, contingent workers to fill their staff.

Compliance in the Sharing Economy

Freelancers and contractors often have the same access to company resources, sensitive information and customers as their full-time co-workers, so gaps in the screening process could pose risks to employers. It may only take one person to damage an organization’s reputation or put existing staff at risk, which is why it is important to ensure that your extended workforce has the necessary checks performed on them. While there is no national standard for background checks in the gig economy, companies still have a vested interest in keeping community members safe. In the meantime, federal, state and municipal governments continue to debate what constitutes an appropriate background check for various segments of the sharing economy.

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Whether your company focuses on transportation, short-term housing or temporary job assignments, background checks are critical. As an employer, you need to screen job candidates and run rechecks on existing employees to deliver safe, reliable service to your customers. Background screening is a highly regulated industry. Candidates are protected under various local, state and federal laws. Employers need to be familiar and compliant with these regulations when hiring new employees, and a background screening partner they can trust.

Fair Credit Reporting Act (FCRA). First in the line of regulatory requirements to be aware of is the federal Fair Credit Reporting Act (FCRA). The FCRA, a consumer protection law dating back to the 1970s, outlines how to inform candidates of background checks, how to use associated data, and how to manage the data once a check is complete.  A key takeaway for companies related to the FCRA includes understanding how your background screening partner complies with these standards.

Ban the Box. Ban the Box laws prevent employers from asking job applicants about their criminal history on the initial applications. Currently, more than 15 states and over 100 cities and counties have adopted laws associated with Ban the Box. Each locality’s legislation has slightly different requirements and exceptions.  As Ban the Box laws continue to become more the rule than the exception when background screening potential employees, companies need to understand all associated legislation as it determines what criteria can be used to vet a candidate in a background screen.

Ever-Evolving On-Demand Economy. The on-demand economy is revolutionizing consumer behavior — whether customers want an on-demand landscaper, doctor, stylist, massage therapist or another type of service provider trust, safety and professionalism are essential. It is still early days for the emerging regulatory landscape in the gig economy.  However, it is clear background checks are a key focal point for compliance in the sharing economy. The staffing industry has been extremely impacted by the gig economy, leading to many discussions on how to maximize the talent supply chain of the on-demand workforce. This topic and more will be discussed at the Staffing Industry Analysts (SIA) Collaboration in the Gig Economy Conference this week in Dallas.

We hope to see you at the Tech Showcase on Oct. 4 at 10:35 am on the Tech & Product Showcase Stage in Room Dallas D-F, where David Bloom, VP of On Demand API at Sterling, will be announcing a pioneering new solution. David explains, “We are debuting another innovation: embeddable, secure background screening widgets. Include account creation, credentialing application, order, pay and even adverse action within your own website as easily as adding a Google map. These widgets are fully secure — the applicant PII is never captured in your system — and you can choose between inherent and custom styling. A major improvement in ease and convenience for your customers at a fraction of the effort of integrating an API.”

Come check it out!



Vincenza Caruso-Valente

Vincenza Caruso-Valente
Vincenza Caruso-Valente is general manager, retail and staffing, Sterling. Find her on LinkedIn.

Vincenza Caruso-Valente

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