3 Hiring Risks Employers Are Overlooking

Unless you have been living under a gigantic rock for the past year or two, it’s safe to say that you are profoundly aware of our shaky and unpredictable economy, and with it, the coinciding hesitation of employers to increase employee headcounts. The effect of this is that companies are looking to utilize an “outside” workforce to conduct business without taking on the full-blown employee/employer relationship. And while this can be a very business savvy move, there remains a risk, in the form of temporary workers, contractors and vendors, often overlooked by employers.

Temporary Workers

According to the U.S. Department of Labor – Bureau of Labor Statistics, the use of temporary workers will continue to significantly increase in the coming years. Like any other “associated worker” not technically on your payroll, your company can be held liable for the harmful actions of that worker.

Alarmingly, staffing agencies who place these individuals do not generally conduct staffing background checks unless specifically instructed by their client. Given the time and financial constraints under which most staffing agencies are forced to function, even when instructed to perform a background check, it is often done using the quickest and cheapest methods.

It’s amazing how many times employers that otherwise have solid background screening practices leave it to chance when it comes to temporary workers placed by a staffing agency. Too many times we hear about employers that later find out, usually through unpleasant circumstances, that the background check was woefully inadequate and that the worker, if hired directly, would not have made it through their screening process.

The best way to prevent these unwanted surprises is to have a solid contract with your staffing firm that clearly identifies the nature and scope of the background check to be performed, who reviews the report, under what criteria is the hiring decision made, who makes that decision, who pays for what and even which specific background screening company will conduct the background checks.


Another way for employers to keep employee headcounts down is to engage other companies to actually deliver on goods and services through independent contractors and sub-contractors. While the work is being conducted by an outside entity, the exposure remains high as noted in a SunSentinel.com article that describes an incident of a Florida company’s subcontractor whose employee was accused of fondling a 10-year girl while working at a Broward County park. The accused man had been previously convicted in a sexual battery case.

In another case, Jones v. C.H. Robinson Worldwide Inc. (VLW 008-3-216), a federal judge stated in a pretrial decision that a motor carrier broker could be sued for “negligent hiring of an independent contractor.” More details can be found in a Virginia Lawyers Weekly piece. Bottom line – contractors and subcontractors can still do damage to your company finances and image so they also need to be background checked. With clear expectations and properly worded disclosure and release authorizations, this can be as smooth a process as screening employees.


Duties that were once performed by internal staff such as tech support, bookkeeping/accounting and janitorial services are now being outsourced. Again, while the work is not being conducted by your direct workforce, using these examples, the access to computer systems, finances and the work premises remain the same; yet many employers don’t even consider conducting a background check on these individuals.

So as our economy continues to shift in the sand, the use of the new “non-employee” workforce will no doubt continue to rise, and not just for low level positions or short-term assignments. So look closely at the potential risk of hiring temporary workers, contractors and vendors and consider the exposure to your company, employees, customers and the general public and take the steps necessary to minimize your liability by conducting the same due diligence that you would on your regular employees.

©2010 Clarifacts