This is the first of a ten part series designed to alert employers of potential danger and hidden liabilities in their background checking processes. Each month ESR will examine a different area that can potentially put unsuspecting employers in hot water.
Some employers have assumed that all background firms are the same, so you may as well just select the cheapest. That is the same thing as saying you should pick a lawyer or any other provider of professional service just based upon price. The reality is that background screening is a knowledge-based professional service, and what your background firm does not know can cost an employer dearly in legal exposure and financial costs down the road if the employer makes a bad hiring decision.
There are ways for background firms to cut costs that leave employers vulnerable. For example, some firms use “at-home” operator networks to perform employment and education verifications. The advantages to the screening firm are numerous. The screening firm gets cheaper labor on-demand, without having to hire workers, provide office space or computers, or pay benefits, vacation time, or workers’ compensation. Since the cost of labor is one of a screening firm’s biggest costs, some firms see this as a way to lower their costs and to increase profits.
Unfortunately, this practice puts the employer at risk. Employers should very carefully consider the dangers of using a screening firm that utilizes a home-operator network for domestic verifications. Do you want your job applicant’s personal and private information spread out in living rooms, kitchen tables, and dorms across America? What about the lack of quality control and standards? In addition, there is an issue as to how at-home operators are trained and monitored for quality control. Employers are strongly advised to avoid the use of screening firms who are willing to sacrifice quality and privacy just to increase their profits at your expense.
Another area of concern is whether such home workers are properly classified. As a general rule, an employer cannot classify someone as an independent contractor when, in fact, they are essentially an employee. Many of the arrangements that involve home-based operator networks can raise significant issues if the home workers are improperly classified as independent contractors, while in fact they are providing a core service of the screening firm, working under the control and direction of the firm, and are not, in reality, an independent business. In addition, failure to ensure a safe working environment or to pay into a state’s workers’ compensation fund can further compound a difficult situation.
Employers should inquire of any screening firm whether they use a home operator network, or if all calls are conducted in the United States in a controlled call center environment.