what high finds
A high percentage of companies responding to the 2020 Annual Business Survey reported using casual, on-call, part-time or contract workers. 33% reported using “contractor, subcontractor, independent contractor or outside consultant” and 50% reported using part-time workers. The information sector reported the highest percentage of companies (57%) using contract labor. The statistics for these types of workers reported in the survey do not apply to all U.S. companies.
GAO’s review of a generalizable sample of S&P 500 companies’ annual financial reports (Form 10-Ks) filed in 2021 found that most companies mentioned the use of contractual work arrangements. GAO estimates that 89% of companies mentioned the use of contractors, and about 84% discussed the risks associated with using contractors—for example, the risk of reduced oversight, poor performance, or contractors performing critical activities such as IT support . An estimated 65% discussed the use of service contract arrangements, such as IT support, human resources or maintenance. The companies also cited factors that could increase labor costs. A small percentage mentioned topics such as workplace safety, wages and access to benefits, especially for non-standard or contract workers.
The information collected is not a comprehensive list of companies’ public disclosures of non-standard and contractual work arrangements, and GAO’s review did not measure companies’ actual practices.
Why GAO did this research
The nature of the workforce is changing, with millions of American workers in non-standard (temporary, on-call or part-time) jobs or in the gig economy. Some research shows that employers are increasingly outsourcing business functions that were once managed in-house, raising concerns about lower pay and reduced access to benefits for contract workers. Policymakers want to know how many workers are in the arrangement, and the reported impact on workplace safety, wages and access to benefits. Investors are increasingly demanding that public companies disclose information on environmental, social and governance factors, including those related to labor conditions.
GAO was asked to review available data on companies’ use of non-standard and certain contractual work arrangements, and reported the impact on topics such as workplace safety, wages and access to benefits. This report provides preliminary observations from GAO’s analysis of the 2020 Annual Business Survey of approximately 300,000 companies, which has a response rate of approximately 68%, and provides 80 annual reports (October-2021) filed by S&P 500 companies. Form K) of a generalizable sample to the Securities and Exchange Commission.
For more information, please contact Tom Costa at (202) 512-4769 or costat@gao.gov, or Michael Clements at (202) 512-8678 or clementsm@gao.gov.