February 13th, 2018 | Sterling

Updates Coming for UK Gig Economy Workers Rights

The gig economy is becoming a strong influence on economies around the world and continues to make headlines in the UK. An April 2017 report by the Royal Society of Arts showed that 1.1 million people work in gig economy positions. 59% provide professional, creative or administrative services, 33% provide skilled or personal services and 16% provide driving or delivery services.  The temporary or contractor worker sector of the economy is growing at a rapid rate and will influence the economy and political system in the UK for many decades to come. Freelancers are relying on websites and apps like Deliveroo, Uber and TaskRabbit to connect them with paying jobs. 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. The contingent workforce is growing at a phenomenal rate in the UK and is showing no signs of slowing down.

Taylor Review and the Gig Economy

According to the BBC, in response to the Taylor Review, the British Government will perform “an overhaul of employment rights to improve conditions for millions of workers, including those in the gig economy. The changes include stricter enforcement of holiday and sick pay rights and higher fines for firms that breach contracts or mistreat staff.” The government will take the Review’s recommendations to the next level by enforcing holiday and sick pay entitlements, giving all workers the right to demand a pay slip and allow flexible workers to demand more stable contracts and a possible higher wage.

In 2017, The Taylor Review, an independent review that considers the implications of new forms of employment on worker’s right and responsibilities was released. The review found that workers in the ‘gig economy’ should be protected but not at the expense of those who work in them. The report recommends that the categorical name of “worker,” which describes a person providing their service through apps, be renamed as “dependent contractor.” There should also be a clearer distinction between this group of employees and those that are self-employed. Dependent contractors should be entitled to additional protections and an obligation to provide them with a written statement of terms and clearer national minimum wage rights. It is still being determined how Brexit will have an impact on the contingent workforce.

Gig Economy Impacts Many Professions

Contingent workers are non-permanent employees, such as contractors, freelancers, agency workers and consultants. The meteoric rise of this group of workers is down to a few factors, such as changing economic and market conditions, skills shortages and a shift in general working patterns. Freelancers and contractors often enjoy higher job satisfaction as they have the flexibility and choice as to when, where and how they work; while employers can flex their workforce to meet immediate needs or demands, and tap into a rich pool of talent, skills and experience, without the burden of keeping them on the payroll.

One such profession that will be affected by the proposed government employment law changes could be nannies or au pairs. According to an article in The Standard late last year, the au pair recruitment system is currently in a state of chaos without regulation or requirements for background checks on the part of either the recruiters or the nannies, which leads to a higher possibility of risk. A significant proportion of au pairs in the UK come from Eastern Europe and find families to work with online or through agencies. If an au pair staffing agency fails to do due diligence in their hiring processes and puts a nanny who is unfit for employment or causes a threat to the family they are working for, then the staffing agency may be liable for breach of contract claims. Therefore, recruitment agencies must develop a comprehensive background screening policy that explicitly states the types of screening that will be performed for the positions they are hiring for.

The Risks of Not Performing Background Screening on Contingent Workers

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 organisation’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. Some of the risks involved in not screening contingent workers include employee fraud, theft, data security breaches or hiring migrant workers who have no legal right to work in the UK.

With ever-increasing numbers of contingent workers entering the labour market, it’s vital that effective, robust policies are in place to screen them. According to our Background Screening Trends and Best Practices 2016 report, just 53% of organisations screen their contingent workforce, compared to the 91% that perform checks on full-time, salaried employees. It is a good idea to carry out the same exact background checks on contingent workers as would be run on full-time employees. If there is any doubt about the screening process, then companies should consider using a third-party screening provider to ensure that all legal obligations are being met. By using the same screening provider and the same process for all workers, you can be sure that the hiring process is fair and equal for everyone and that you thoroughly understand an individual’s background before recruiting them.

Sterling created the Background Screening Policy Considerations in the UK Checklist to help organisations create a background screening policy. Find out more by downloading a copy today.

This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.