2020 in Review: State of the Gig Worker

2020 in Review: State of the Gig Worker

By Tricia O'Connor

We’re going back to the future over the next few weeks.

Last January, we released our annual background screening trends where our EBI prognosticators made some bold industry predictions in five areas: Continuous Monitoring, Social Screening, Gig Workers, DOT Drug Testing, and Salary History Bans.

Then COVID-19 hit.

We thought it would be interesting to revisit some of these trends to find out if COVID-19 messed up our predictions – and if so, how badly.

First up: screening gig workers.

Here’s what we predicted:

“Freelance, contingent, extended, contract, independent contractors, subcontractors…. whatever you call them, they are a robust portion of the workforce. An Intuit study predicts roughly 7.6 million American workers will participate in the 2020 gig economy – that’s more than double the total number of freelancers five years ago. The numbers show companies need to have a screening policy for these workers, even if the gig workers are not customer-facing (they still represent the brand).”

Basically, in our original post, we claimed that in 2020:

• The number of freelancers would grow

• Employers would need a defined screening policy to meet gig demand

• Many new freelancers would have non-customer facing roles

Now, let’s break down our predictions and see if we were right.

What 2020 Proved

The figures in that Intuit study were low. 

Since 2015, the independent workforce grew by 7%. Freelancers Union reports gig workers make up one-third of the U.S. workforce, contributing $1 trillion annually to the economy. 

Even before COVID-19 decimated our nation’s workforce, 56.7 million Americans freelanced last year.

However, a poll of 6,000 freelance workers taken during the summer shows an interesting and complex situation. The share of the total labor force freelancing grew from 35% to 36%, but 28% of freelancers had to drop out of the gig marketplace during that same time. How is that possible, you ask?

COVID-19 changed the composition of the workforce.

Many low-skilled freelance jobs from places like Uber or TaskRabbit dried up, but higher-skilled remote gigs and on-demand services like grocery delivery bloomed. And this explanation leads us to our next point. 

Many people were forced into or tried freelancing this year because of full-time labor cuts associated with COVID-19.

Some professionals love the freedom and autonomy of working this way. Others choose to freelance out of necessity. Experts are watching the gig economy numbers closely to find out how COVID-19 is affecting the prevalence of freelancing. There are discrepancies between how the actual numbers of gig workers can be adequately measured, however, the freelance movement is an important employment category for workers and businesses in our pandemic economy because they are increasingly relying on remote, flexible, and on-demand work. 

The shift to remote work in response to COVID-19 also prompted some people to look into freelancing for the first time. Many enterprise-caliber companies, including Facebook, Twitter, and Google’s parent company Alphabet, implemented plans to allow some or all their workforce to operate at home. This flexibility, coupled with furloughs and economic hardship, prompted many people to step into the freelancing ring. That same poll reports the top two occupations for new freelancers are in technology and finance or business. 

We won’t know the full impact the pandemic has had on the rate of freelancing for a while. 

Employers who needed to hire gig workers for the first time didn’t have a good handle on compliance and screening laws related to independent contractors. 

The laws for screening independent contractors are the same laws pertaining to full-time and part-time hires as well as volunteers. The Fair Credit Reporting Act (FCRA) is the chief federal law and it is overseen by the Equal Employment Opportunity Commission (EEOC) and the Federal Trade Commission (FTC). The FCRA applies any time an employer obtains a pre-employment background check from a third party.

Employers largely have the same liability issues with gig workers as with regular employees, and more employers are choosing to screen these workers to mitigate risk. In some industries and some states, employers are required to conduct background checks on all workers, regardless of employment status.

The Society for Human Resource Management (SHRM) says employers may conduct background checks on any workers, including freelancers, performing jobs on their worksites. SHRM also advises employers to refer to state laws, client relationships, and government contract requirements before conducting background checks.

Employers turned to on-demand screening services to fill background check needs quickly during COVID-19.

Often used for seasonal employees like summer camp counselors and holiday-themed workers, on-demand screening became the go-to solution to fill hiring needs fast during COVID-19. But employers still needed to have a screening policy in place to ensure compliance.

The healthcare industry is a prime case study. 

Healthcare jobs skyrocketed as hospitals, medical labs, research facilities, and other clinics tried to meet the increased demand the coronavirus is putting on an already strained workforce. Public health organizations also hired for newly created jobs like contact tracer or workplace safety technician or COVID-19 tester. 

Filling these jobs quickly, accurately, and safely is a huge priority. Some healthcare groups loosened background check requirements to get folks suited up faster, while others turned to on-demand screening solutions.

If you’re going to screen gig workers to fill upcoming hiring needs as the pandemic continues, EBI suggests these best practices:

Continue to screen – Despite the pressure you may be feeling to onboard candidates quickly, this is not something to skip.

Determine core compliance checks – You may need to consider ordering specific types of background checks for certain types of positions.

Due diligence – You must practice due diligence and verify the qualifications of the people practicing in your facility.

Did EBI’s Prediction Hit the Mark?

We said freelancing would grow and employers would need a viable screening policy even if the workers were not customer facing. 

Even with the COVID-19 pandemic, EBI hit the mark: 

• The freelancing market grew (albeit by a small margin)

• Employers needed a modified screening policy to meet gig demand

• Many new freelancing workers were hired remotely for non-customer facing positions

Stay tuned for our upcoming reviews on other trend predictions in the coming weeks.

EBI is Here For You

Understanding the complexities of background screening is what we do best. Our team of compliance experts, customer care advocates, and unique services like our Trusted Advisor Program means you are never alone when you partner with EBI.

If you are considering building out your freelance network to help you recover from this pandemic economy, please reach out to one of our EBI experts. We’d love to chat with you about our background check services and our return-to-work safety solution.

For more information about EBI, click here

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About the Author

Tricia O'Connor

Tricia O'Connor

Writer. Digital marketer. Storyteller. An award-winning writer and editor, Tricia O'Connor is the Marketing Content Manager at EBI. Tricia worked as a broadcast and print journalist for nearly two decades writing and producing programming for high-profile networks like ESPN Radio, History Channel, and Hallmark Channel, as well as contributing editorial work to publications nationwide. Tricia joined the EBI marketing team in 2019 and is responsible for content strategy, development, and engagement. Tricia earned a master's degree in journalism from the Medill School of Journalism at Northwestern University and is a proud undergraduate alumna of Wheaton College in Massachusetts.

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