GAO Issues Report on Contingent Workforce

Author: Ashley Shaw, XpertHR Legal Editor

June 3, 2015

The US Government Accountability Office (GAO) has issued a report on the contingent workforce, which examines the state of part-time workers, those employed by temporary staffing agencies and independent contractors in the workforce. The report uses data from a US Department of Labor, Bureau of Labor Statistics survey of contingent workers called the Contingent Work Supplement (CWS) and other reliable sources. The report parses the data to reveal information specific to each category of contingent worker.

The size of the contingent workforce varies by definition and by data source. The report defines a contingent worker as a worker without "an explicit or implicit contract for long-term employment." Using this broad definition, which includes part-time workers, independent contractors, the self-employed and temporary workers, the report finds that contingent workers comprised over 40% of the US workforce in 2010, which represents a five-percentage-point increase over 2006. The rise may be due to employers' reduction of employees' hours and increased hiring of part-time workers in the intervening years.

The report includes findings regarding the size, earnings potential and relative safety of the contingent workforce.

  • While with the broadest definition contingent workers make up 40.4% of the workforce, at its most constricting definition, this number drops to less than 5%.
  • The core contingent workforce equates to about 7.9% of the workforce. The core contingent workforce is made up of workers without stable jobs or with variable, unpredictable work schedules, and includes:
    • Agency temporary workers;
    • Direct-hire temporary workers;
    • On-call workers and day laborers; and
    • Contract company workers.
  • When controlled for hours (i.e., taking into account actual hours worked instead of total salary), contingent workers make on average 16.7% less per week and 12.9% less per year than more traditional workers. When not controlling for hours, this differential jumps to 27.5% less per week and 47.9% less annually. The wide gap in these numbers reflects the fact that contingent workers are more likely to go through periods of unemployment than the standard worker.
  • With respect to job satisfaction, more than 85% of independent contractors and the self-employed respond that they are satisfied. However, these numbers drop significantly, to less than 50%, for agency temps and on-call workers or day laborers.
  • A lack of empirical data on these workers makes an evaluation of their workplace safety challenging. However, recent Occupational Safety and Health Administration (OSHA) initiatives address potential safety risks for contingent workers based on a possible lack of safety training and emphasize tracking injuries and illnesses of temporary workers.

While the report showcases the state of the contingent workforce, the data may not reveal a full and accurate picture because of the variance among industries, localities, definitions of contingent workers and other factors.