Is the New Gig Economy Opening Your Company Up to Risk?

If you perform pre-employment background screening checks on new hires, your company is protected, right?

Not if you are letting contract, freelance, and temporary workers slip through the cracks.

The new “gig” economy is changing the workforce, with an estimated 90 million (according to a poll by Time Magazine) Americans having participated either as a provider or a buyer of gig service.

A “gig” is another way of saying freelance or contract worker. There is no real boss and no concrete employer relationship. The advantages of this arrangement are that it offers freedom, cost savings, and independence on both sides of the “gig.”

However, with this new aspect of employment becoming increasingly prevalent, there is also a risk that employers must address. If companies have people on their premises performing duties that are not officially “company employees,” the question arises on how to screen them to ensure they are qualified, and safe workers? HR professionals are faced with an unprecedented issue on how to handle the growing number of these types of workers.

From workers outsourced from other companies (janitors, guards, lawn care) to a freelancer or contract worker that is hired as an individual, measures must be taken to screen them properly.

Sub-contracted or temporary employees offer positive benefits to the company culture. They provide the company with flexibility, nice grounds, customer service during temporary busy periods, all without adding to the fixed employee expenses and benefits of permanent employees.

However, these non-permanent employees can also be a detriment to a company’s safety and security if not screened properly. These individuals pose as much risk as any permanent staff member and very often are even more of a potential threat.

Companies need to put a priority on who is allowed on their payroll, in their place of work, and access to potentially sensitive and valuable information. It is just as important-maybe even more so-to put measures in place to “weed out” any temporary, outsourced, or contract worker who poses a risk to the workplace.

What to do: here are five answers to ensure your company’s risk from the growing gig economy is minimized.


Make sure the all of your contract companies perform a background check. Review your contract with all outsourced companies that are your vendors. As part of service contracts, you should insist on screening as part of any agreement. Require that it clearly state the contract company is required to conduct background screening through a reputable third party background screening provider, and note specifically what the screening entails.


Your vendors must be thorough. A simple database search won’t fill the bill to ensure safe, trusted staff. HR professionals need to ask their current vendors to list the specific types of information they collect on new hires. Good answers are county searches, drug testing, and employment verification. Bad answers are “a database search,” “we hire with our gut,” or a blank stare and silence.


Find out how often the company screens their staff. A red flag should go up if the vendor says they screen before hiring, and then they never conduct screening again. If their employees work there for several years (which is a good sign most of the time), who knows if they have been involved in high risk, illegal activities such as drug use? Look for contract outsourced companies that perform periodic screening in addition to pre-employment checks.

If you ask these questions and don’t like your vendor’s answers, consider….


Screen contract employees in-house. Conduct background screening on any and all employees who work for the company in the same manner, whether they are regular employees, outsourced or contract employees. This option is a little costlier to your company on the front end, however, you benefit by maintaining complete control over the screening process. Just one bad hire can cost a company money, time lost in training, and possible reputation tarnishing if the hire results in a lawsuit. In the end, the small cost a running a background check is worth it many times over.

This is an especially attractive and beneficial option if your company is hiring individual contract, freelance, or temporary workers, instead of going through a third party staffing company.


You can choose the reputable third party background screening provider that screens the employee AND the types of checks that you feel are appropriate. This process helps you maintain control and compliance, provides a uniform screening procedure across each and every employee, and minimizes the risk of a bad hire and unsafe workplace.

Background screening is an integral part of today’s safe hiring process, as it reduces the instances of turnover while offering a shield from litigation, such as negligent hiring lawsuits. It’s important that HR professionals make certain ALL employees are screened in a proper, consistent manner. Putting these actions into place can reduce the risk of lawsuits, bad press, and safety issues.

Create an actionable plan so that your company is prepared for the growing effect of the gig economy.

Jennifer Taylor Account Manager Data Facts, Inc.

Jennifer Taylor
Account Manager
Data Facts, Inc.