US Sens. Mark R. Warner, D-Virginia, and Sherrod Brown, D-Ohio, last week sent a letter to the US Government Accountability Office urging it to report on companies’ increased use of subcontracted and contingent workers, saying the use of such workers leads to environments where primary employers outsource “non-core” business functions to subcontracted firms but still maintain tight control over the outcomes of those subcontractors. The senators dub these environments “fissured workplaces.”

The senators cite occupations such as payroll, accounting, janitorial services, facilities maintenance, security and food preparation among those often outsourced to subcontracted and contingent workers.

The senators pressed Comptroller General Gene Dodaro for more information to better understand how companies’ efforts to cut costs are affecting the long-term resiliency and stability of workers, and how this trend is affecting the US workforce and its paths for upward mobility.

The senators said fissured workplaces could be leading to an “erosion of the American social contract. … and has likely contributed to the decline in employer-sponsored training,  and led to ambiguity in terms of who is responsible for providing workplace protections and who must be at the bargaining table when workers form a union,” wrote the senators. Studies in multiple states have found that temp workers experience twice the rate of injury as permanent workers, the letter noted, “perhaps due to the fact that they are nearly twice as likely as permanent workers to have never received safety training.”

While public companies are required to report the number of full-time workers to the Securities and Exchange Commission, they are not required to report the number of contract or contingent workers, the senators note, which makes it difficult for lawmakers to understand the extent to which public companies are now relying on these workers in order to save costs.

The US Securities and Exchange Commission last month issued a final rule regarding public companies’ human capital disclosures, but registrants are only required to disclose their part-time employees, full-time employees, independent contractors and contingent workers, and employee turnover, to the extent such information is material to understanding the registrant’s business.

In their letter, the senators also expressed concern about the rise in hiring of contract and contingent workers for particularly vulnerable occupations and tasks. They specifically highlighted social media companies’ high rates of reliance on these workers for work that could have significant long-term mental health consequences such as content moderation — the process of reviewing user content for adherence to company policy, which entails viewing disturbing online content like graphic violence, sexual predation and assault, child pornography, or other traumatic content.

In their letter, the senators specifically asked the GAO to address the following questions:

  1. Since 1980, to what extent have companies increased their use of temporary workers, subcontracted workers, independent contractors, and franchises for work that was typically done by direct employees? Is this use of alternative work arrangements typically permanent or long-term?

  2. What are the demographic characteristics of contract and contingent workers by sector? Are there any sectors in which these employment shifts have been the most pronounced? If so, what are the most common business justifications given for the use of these alternative work arrangements in those sectors and how do those justifications compare across sectors?

  3. How do the pay, benefits, schedules, access to workforce training opportunities and job security of employees in these different work arrangements compare to the pay, benefits, schedules, access to workforce training opportunities, and job security of employees that are direct employees of the companies? How have these differences changed over time and to what extent have they contributed to reduced paths to upward mobility in the American economy?

  4. For contingent workers at large employers, how long do typical contingent workers work in each “gig” and how long does it typically take workers to find another “gig”? Are there typically pathways for workers who are temporary staff, subcontracted, or independent contractors to become full-time, direct employees of the companies?

  5. What are the estimated business savings to a company who uses temporary workers, subcontracted workers, and independent contractors?

  6. What are the long-term effects of contingent work in areas such as content moderation on workers’ future employment, psychological well-being, and physical health and does this work create costs or externalities borne by state, local, or federal governments? What are some potential long-term consequences for economic security for workers in contract and contingent work arrangements?

  7. Are there comprehensive federally available data to track companies’ use of alternative work arrangements? If so, what are the data sets, how often are the data collected, how comprehensive are the data sets, and what gaps remain? Does GAO have any policy recommendations for improving data collection on these employment trends?

  8. What private data are available to track these trends?

  9. In the technology sector, please use any private data, including private data provided by companies in that sector, to provide additional analysis of the use of these alternative work arrangements and assessment on the impact to employees’ pay, benefits, schedules and job security. Additionally, to what extent do workers take on contract-based work with a hiring preference for full-time direct employment and an expectation that contract-based work will turn into a direct employee opportunity?

  10. Have these types of workers faced any additional economic hurdles brought about by Covid-19, such as greater likelihood of being laid off, furloughed or reduced access to benefits, including employer-provided health insurance?