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Testimony before the Subcommittee on Income Security and Family Support 
and Subcommittee on Select Revenue Measures, Committee on Ways and 
Means, House of Representatives: 

United States Government Accountability Office: 

GAO: 

For Release on Delivery Expected at 9:30 a.m. EDT: 

Tuesday, May 8, 2007: 

Employee Misclassification: 

Improved Outreach Could Help Ensure Proper Worker Classification: 

Statement of Sigurd R. Nilsen, Director: 
Education, Workforce, and Income Security: 

GAO-07-859T: 

GAO Highlights: 

Highlights of GAO-07-859T, a testimony before the Subcommittee on 
Income Security and Family Support and Subcommittee on Select Revenue 
Measures, Committee on Ways and Means, House of Representatives 

Why GAO Did This Study: 

Some workers do not receive worker protections to which they are 
entitled because employers misclassify them as independent contractors 
when they should be classified as employees. Key worker protections 
include minimum hourly wage and overtime pay and access to unemployment 
insurance. The Department of Labor (DOL) enforces several labor laws to 
protect workers, including the Fair Labor Standards Act (FLSA). 
Misclassification can also have a negative impact on tax collection for 
Social Security, unemployment insurance, and other programs. This 
testimony draws upon a previous GAO report and focuses specifically on 
(1) the number and characteristics of independent contractors, (2) the 
workforce protections and benefits provided to employees that typically 
are not available to independent contractors, and (3) the actions that 
DOL takes to detect and address employee misclassification. 

What GAO Found: 

The number of independent contractors in the total employed workforce 
grew from 6.7 percent in 1995 to 7.4 percent in 2005. In 2005, there 
were 10.3 million independent contractors. Independent contractors, in 
2005, had an average age of 46 years, were almost twice as likely to be 
male than female, and almost two-thirds had some college or higher 
education. Independent contractors were employed in a wide range of 
industries (such as professional services and construction) and 
occupations (including sales and management). 

When employees are misclassified as independent contractors, they may 
be excluded from coverage under key laws designed to protect workers 
and may not have access to employer-provided health insurance coverage 
and pension plans. Moreover, misclassification of employees can affect 
the administration of many federal and state programs, such as payment 
of taxes and payments into state workers' compensation and unemployment 
insurance programs. Notably, the tests used to determine whether a 
worker is an independent contractor or an employee are complex, 
subjective, and differ from law to law. 

DOL detects and addresses misclassification of employees as independent 
contractors by investigating complaints, but does not always forward 
misclassification cases to other federal and state agencies. DOL 
investigators detect and address employee misclassification primarily 
when responding to FLSA minimum wage and overtime pay complaints. DOL 
procedures require officials to share information with other federal 
and state agencies whenever investigators find possible violations of 
other laws. However, the district offices GAO contacted vary in how 
often they forward misclassification as a possible violation of other 
laws. As one form of outreach to workers, DOL has an FLSA workplace 
poster that explains the act, but it is missing key contact 
information. 

What GAO Recommends: 

GAO is not making new recommendations at this time. The Department of 
Labor generally agreed with the recommendations in the GAO report, 
which focused on improvements to a worksite poster reaching out to 
workers and DOLís efforts to forward misclassification cases to other 
agencies. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-859T]. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Sigurd Nilsen at (202) 
512-7215 or nilsens@gao.gov. 

[End of section] 

Mr. Chairmen and Members of the Subcommittees: 

Thank you for inviting me here today to discuss the misclassification 
of employees as independent contractors. Some workers do not receive 
worker protections to which they are entitled because employers 
misclassify them as independent contractors when they should be 
classified as employees. Key worker benefits and protections include 
the guarantee of workers' rights to safe and healthful working 
conditions, a minimum hourly wage and overtime pay, freedom from 
employment discrimination, and access to unemployment insurance. In its 
last comprehensive misclassification estimate, the Internal Revenue 
Service (IRS) estimated that 15 percent of employers misclassified 3.4 
million workers as independent contractors in 1984, resulting in an 
estimated tax loss of $1.6 billion (or $2.72 billion in inflation- 
adjusted 2006 dollars[Footnote 1]) in Social Security tax, unemployment 
tax, and income tax. 

The Department of Labor (DOL) enforces a wide range of labor laws that 
provide protections to workers, including the Fair Labor Standards Act 
(FLSA), which provides minimum wage, overtime pay, and child labor 
protections. Other federal and state agencies enforce laws that provide 
workers with additional workforce benefits and protections. 

The information I am presenting today is based on findings from a July 
2006 report, which examined various aspects of the contingent 
workforce.[Footnote 2] Today, as requested, I will focus specifically 
on independent contractors, one of eight categories of contingent 
workers included in our report. I will discuss (1) the number and 
characteristics of independent contractors, (2) the workforce 
protections and benefits provided to employees that typically are not 
available to independent contractors, and (3) the actions that DOL 
takes to detect and address employee misclassification. To identify 
information on the contingent workforce, we analyzed data from the 
Bureau of Labor Statistics' (BLS) Current Population Survey (CPS), 
which is used to survey people about their work and workplace benefits, 
and a CPS supplement developed to collect information on the contingent 
workforce; interviewed BLS officials and other researchers about 
contingent worker issues; and reviewed key workforce protection laws to 
determine coverage of contingent workers. To obtain information on 
DOL's efforts to detect and address employee misclassification, we 
reviewed DOL documents and interviewed DOL officials and reviewed 
literature and interviewed researchers about employee misclassification 
issues. We performed our work in accordance with generally accepted 
government auditing standards between July 2005 and June 2006. 

In summary, the number of independent contractors in the total employed 
workforce grew from 6.7 percent in 1995 to 7.4 percent in 2005. In 
2005, there were 10.3 million independent contractors.[Footnote 3] 
Independent contractors, in 2005, had an average age of 46 years, were 
almost twice as likely to be male than female, and almost two-thirds 
had some college or higher education. Independent contractors were 
employed in a wide range of industries (such as professional services 
and construction) and occupations (including sales and management). The 
tests used to determine whether a worker is an independent contractor 
or an employee are complex, subjective, and differ from law to law. 
Nevertheless, when employees are misclassified as independent 
contractors, they may be excluded from coverage under key laws designed 
to protect workers and may not have access to employer-provided health 
insurance coverage and pension plans. Moreover, misclassification of 
employees can affect the administration of many federal and state 
programs, such as payment of taxes and payments into state workers' 
compensation and unemployment insurance programs. Finally, DOL detects 
and addresses misclassification of employees as independent contractors 
by investigating complaints, but does not always forward 
misclassification cases to other federal and state agencies. DOL 
investigators detect and address employee misclassification primarily 
when responding to FLSA minimum wage and overtime pay complaints. DOL 
procedures require officials to share information with other federal 
and state agencies whenever investigators find possible violations of 
other laws. However, the district offices GAO contacted vary in how 
often they forward misclassification as a possible violation of other 
laws. As one form of outreach to workers, DOL has an FLSA workplace 
poster that explains the act, but is missing key contact information. 
GAO recommended in its July 2006 report that DOL revise the workplace 
poster to include additional contact information that would facilitate 
the reporting of potential employee misclassification complaints, and 
evaluate the extent to which misclassification cases identified through 
investigations are referred to the appropriate federal or state agency, 
and take action to make improvements as necessary. DOL generally agreed 
with both recommendations. 

Background: 

The term "contingent work" can be defined in many ways to refer to a 
variety of nonstandard work arrangements. Broadly defined, "contingent 
work" refers to work arrangements that are not long-term, year-round, 
full-time employment with a single employer. For example, an employer 
may hire workers when there is an immediate and limited demand for 
their services, without any offer of permanent or even long-term 
employment. Independent contractors, temporary workers, and part-time 
workers are examples of contingent workers. Specifically, independent 
contractors can be seen as individuals who obtain customers on their 
own to provide a product or service (and who may have other employees 
working for them), such as maids, realtors, child care providers, and 
management consultants. 

Research has shown that employers use contingent work arrangements for 
a variety of reasons. Employers may hire contingent workers to 
accommodate workload fluctuations, fill temporary absences, meet 
employees' requests for part-time hours, screen workers for permanent 
positions, and save on wage and benefit costs, among other reasons. 
Previous analyses of data from the CPS Contingent Work Supplement have 
indicated that workers also take temporary and other contingent jobs 
for a variety of personal and economic reasons. For example, workers in 
various types of contingent jobs indicated that they (1) preferred a 
flexible schedule to accommodate their school, family, or other 
obligations; (2) needed additional income; (3) could not find a more 
permanent job; or (4) hoped the job would lead to permanent employment. 
Studies using data from the BLS National Longitudinal Survey of Youth 
show that events such as the birth of a child or a change in marital 
status affect the likelihood of entering different types of employment 
arrangements and prompt some workers to enter contingent work 
arrangements. 

Concerns arise when employers misclassify workers as independent 
contractors, who are excluded from certain worker protections. Employee 
misclassification occurs when an employer improperly classifies a 
worker as an independent contractor when the worker should be 
classified as an employee. In 2000, we reported that because most key 
workforce protection laws cover only workers who are employees, 
independent contractors and certain other contingent workers, such as 
self-employed workers, are, by definition, not covered.[Footnote 4] 

DOL may encounter employee misclassification while enforcing worker 
protection laws. DOL's mission is to promote the welfare of job 
seekers, workers, and retirees in the United States by improving their 
working conditions, advancing their opportunities for profitable 
employment, protecting their retirement and health care benefits, 
helping employers find workers, strengthening free collective 
bargaining, and tracking changes in employment, prices, and other 
national economic measurements. In carrying out this mission, DOL 
enforces a variety of worker protection laws, including those 
guaranteeing workers' rights to safe and healthful working conditions, 
a minimum hourly wage and overtime pay, freedom from employment 
discrimination, and unemployment insurance. 

In particular, DOL's Employment Standards Administration's (ESA) Wage 
and Hour Division enforces FLSA. The Wage and Hour Division--with staff 
located in 5 regional and 72 district, area, and field offices 
throughout the country--conducts investigations of employers who have 
$500,000 or more in annual sales volume. In addition, the division 
conducts outreach efforts for employers and workers to ensure 
compliance with FLSA. District directors oversee investigators, who 
play a key role in carrying out FLSA enforcement. Investigators are 
trained to investigate a wide variety of workplace conditions and 
complaints and enforce a variety of labor laws in addition to 
FLSA.[Footnote 5] Regional and district offices conduct outreach to 
employers and workers through brochures, workplace posters, 
presentations or training sessions for individuals or groups, and Web- 
based information. 

FLSA--which provides minimum wage and overtime pay protections-- 
requires that employers pay those employees covered by the act at least 
the minimum wage and pay overtime wages when they work more than 40 
hours a week. FLSA requires that an employer-employee relationship 
exist for a worker to be covered by the act's provisions. 

Number and Characteristics of Independent Contractors: 

In 2005, an estimated 7.4 percent of the total employed workforce were 
independent contractors. By comparison, 6.7 percent of the workforce 
were independent contractors in 1995. During this time period, the 
number of independent contractors grew from an estimated 8.3 million to 
10.3 million workers in 2005. (In 2005, there were about 42.6 million 
contingent workers in the workforce--representing an estimated 31 
percent of the workforce.) 

Independent contractors, in 2005, were on average 46 years old. The 
majority were men (65 percent), had attended or graduated from college, 
and 8 out of 10 were white, non-Hispanic. Independent contractors were 
employed in a wide range of industries, but in 2005, 23 percent were 
employed in professional services and 22 percent were employed in 
construction. Regarding occupations, the percentage of independent 
contractors in sales and related occupations (17 percent) and 
management (16 percent) were greater than in other occupations. In 
2005, 9 percent of independent contractors indicated that they would 
prefer to work for someone else. About 11 percent of independent 
contractors reported family income below $20,000. 

Misclassification of Employees Can Have Negative Outcomes for Workers 
and Government Programs: 

The tests used to determine whether a worker is an independent 
contractor or an employee are complex, subjective, and differ from law 
to law. Nevertheless, when employees are misclassified as independent 
contractors, they may be excluded from coverage under key laws designed 
to protect workers and may not have access to certain employer-provided 
benefits, such as health insurance coverage and pension plans. 
Moreover, misclassification of employees can affect the administration 
of many federal and state programs. For example, misclassification 
could affect payment of taxes and payments into state workers' 
compensation and unemployment insurance programs. 

There Is Neither a Single or Simple Test Used to Determine whether a 
Worker Is an Independent Contractor or an Employee: 

No definitive test exists to distinguish whether a worker is an 
employee or an independent contractor. The tests used to determine 
whether a worker is an independent contractor or an employee are 
complex, subjective, and differ from law to law. For example, the 
National Labor Relations Act, the Civil Rights Act, the Fair Labor 
Standards Act, and the Employee Retirement Income Security Act each use 
a different definition of an employee and various tests, or criteria, 
to distinguish independent contractors from employees. 

In determining whether an employment relationship exists under federal 
statutes, courts have developed several criteria. These criteria have 
been classified as the economic realities test, the common law test, 
and a combination of the two sometimes referred to as a hybrid test. 
The economic realities test looks to whether the worker is economically 
dependent upon the principal or is in business for him or herself. The 
test is not precise, leaving determinations to be made on a case-by- 
case basis. The test consists of a number of factors, such as the 
degree of control exercised by the employing party over the worker, the 
worker's opportunity for profit or loss, the worker's capital 
investment in the business, the degree of skill required for the job, 
and whether the worker is an integral part of the business. The 
traditional common law test examines the employing party's right to 
control how the work is performed. To determine whether the employing 
party has this right, courts may consider the degree of skill required 
to perform the work, who supplies the tools and equipment needed to 
perform the work, and the length of time the worker has been working 
for the employing party. When the tests are combined in some type of 
hybrid, a court typically weighs the common law factors and some 
additional factors related to the worker's economic situation, such as 
how the work relationship may be terminated, whether the worker 
receives leave and retirement benefits, and whether the hiring party 
pays Social Security taxes. 

Aside from the complexities of distinguishing employees from 
independent contractors, employers have economic incentives to 
misclassify employees as independent contractors. Namely, employers are 
not obligated to make certain financial expenditures for independent 
contractors that they make for employees, such as paying certain taxes 
(Social Security, Medicare, and unemployment taxes), providing workers' 
compensation insurance, paying minimum wage and overtime wages, or 
including independent contractors in employee benefit plans. 

Misclassified Employees May Be Excluded from Coverage under Key Worker 
Protection Laws: 

Contingent workers who are employees are generally protected under key 
laws designed to protect workers, but certain categories of contingent 
workers--such as independent contractors--may be excluded from coverage 
under these laws. While most of the key worker protection laws do not 
distinguish between types of employees (i.e., contingent and standard 
full-time employees), some laws contain requirements that exclude 
certain categories of contingent workers or contain certain time-in- 
service requirements that make it difficult for them to be covered. In 
addition, because these laws are based on the traditional employer- 
employee relationship, they generally cover only workers who are 
employees; independent contractors, therefore, are not covered. 

Some of the key laws designed to protect workers but that only apply to 
"employees" include the following: 

* Fair Labor Standards Act--establishes minimum wage, overtime, and 
child labor standards; 

* Family and Medical Leave Act--requires employers to allow employees 
to take up to 12 weeks of unpaid, job-protected leave for medical 
reasons related to a family member's or the employee's own health; 

* Occupational Safety and Health Act--requires employers to maintain a 
safe and healthy workplace for their employees and requires employers 
and employees to comply with all federal occupational health and safety 
standards; 

* National Labor Relations Act--guarantees the right of employees to 
organize and bargain collectively; 

* Unemployment Insurance--pays benefits to workers in covered jobs who 
become unemployed and meet state-established eligibility rules; and: 

* Workers' Compensation--provides benefits to injured workers while 
limiting employers' liability strictly to workers' compensation 
payments. 

When employers have misclassified workers as independent contractors, 
workers may need to go to court to establish their employee status and 
their eligibility for protection under the laws. In addition, DOL may 
bring a lawsuit on behalf of the worker or group of workers to require 
that the employer provide the benefit or protection under the law. 

Misclassified Employees May Not Have Access to Some Employer-Provided 
Benefits: 

Employees who are misclassified as independent contractors, because by 
definition they would not be considered employees, may not have access 
to certain employer-provided benefits, such as health insurance 
coverage and pension plans. Some states and professional associations 
have developed health insurance programs that help contingent workers 
access health care. While these public and private initiatives are 
relatively new and long-term outcomes have yet to be determined, the 
programs have succeeded in expanding health insurance options for some 
contingent workers. 

Employee Misclassification Can Affect Administration of Government 
Programs: 

Misclassification of employees can affect the administration of many 
federal and state programs, such as payment of taxes and pension 
benefits. For example, if employers misclassify workers as independent 
contractors, then they may not be paying the payroll taxes required to 
be paid for employees. At the federal level, misclassification can 
reduce tax payments, Medicare payments, and Social Security payments. 
At the state level, misclassification can affect payments into state 
tax, workers' compensation, and unemployment insurance programs. 

DOL Detects and Addresses Employee Misclassification Through 
Investigations, but Offices We Studied Vary in How Often They Forward 
Misclassification Cases to Other Federal and State Agencies: 

DOL detects and addresses employee misclassification when enforcing the 
FLSA minimum wage and overtime pay provisions. As part of its FLSA 
investigation process, DOL examines the employment relationship-- 
whether a worker is an employee or an independent contractor--to 
determine which workers are covered. Investigators use various methods 
to test the employment relationship of workers, including interviewing 
employers and workers, reviewing payroll and related documents, and 
touring work sites. While misclassification alone is not an FLSA 
violation, it may contribute to FLSA violations or violations of other 
laws, such as tax violations. DOL's outreach efforts provide some 
information to employers and workers on employee misclassification 
issues. DOL procedures require officials to share information with 
other federal and state agencies whenever investigators find possible 
violations of other laws. However, the district offices that we 
contacted vary in how often they forward misclassification cases as a 
possible violation of other agencies' laws. 

Investigators Determine Workers' Employment Relationship: 

DOL relies on complaints as a primary way to identify potential 
violations for investigation. All FLSA investigations of minimum wage 
and overtime pay complaints begin with an examination of workers' 
employment relationship because FLSA applies only to employees, not to 
independent contractors. If investigators determine that a worker is an 
employee and not an independent contractor, they continue with their 
FLSA investigation to determine whether the employer has provided the 
minimum wage and overtime pay required by the act. 

Employee Misclassification, though Not an FLSA Violation, May 
Contribute to FLSA or Other Violations: 

Employee misclassification alone is not a violation of FLSA, but may 
contribute to FSLA minimum wage and overtime pay violations or 
violations of tax, workers' compensation, or unemployment insurance 
laws. DOL investigations have identified FLSA violations associated 
with employee misclassification. For example, one misclassification 
case involved a valet parking company located in Arizona that provided 
services to local restaurants, sports venues, hotels, and theaters. In 
2004, this company paid $66,947 in minimum wage and overtime pay back 
wages to 262 employees who had been misclassified as independent 
contractors. When reviewing the employment relationship, the DOL 
investigator found that the services provided by these workers were 
integral to the business, and that the employer had imposed strict 
policies and procedures to follow, and told them when they would work, 
where they would work, what their pay rate would be, and what uniforms 
they would wear. The investigator determined that the workers were not 
required to use initiative, judgment, or foresight to be successful as 
independent contractors, did not have any investment in facilities or 
equipment, and were not operating to make a profit. 

DOL's Outreach Efforts Provide Some Information on Employee 
Misclassification Issues: 

As part of general FLSA outreach efforts to employers and workers, DOL 
provides some information on establishing the employment relationship. 
While these outreach efforts primarily focus on how to comply with 
provisions of FLSA--minimum wage, overtime pay, and child labor--they 
also include some information on the employment relationship. 
Specifically, information on employment relationship issues is 
available to employers and workers through brochures, pamphlets, fact 
sheets, and Web-based information. According to DOL officials, outreach 
efforts conducted specifically for industries likely to use independent 
contractors may also address the topic of employee misclassification. 

Another form of outreach that DOL provides is its workplace poster. 
FLSA regulations require that every employer that has employees subject 
to the act's provisions post a notice explaining the act in a prominent 
and accessible place at the work site. While DOL relies heavily on 
complaints from workers to enforce FLSA, the FLSA workplace poster does 
not provide a telephone number for workers or others to call to 
register complaints. 

DOL Offices We Studied Vary in How Often They Forward Misclassification 
Cases to Other Federal and State Agencies: 

Employers' misclassification of workers as independent contractors may 
in some circumstances violate tax, unemployment insurance, and workers' 
compensation laws. According to the Field Operations Handbook, DOL 
regional or district officials are required to share information with 
other appropriate federal and state agencies whenever investigators 
conducting FLSA investigations find instances of possible violations of 
other laws. At the same time, however, the handbook cautions 
investigators not to interpret laws outside their authority. We 
discussed whether DOL forwards misclassification cases identified 
during an FLSA investigation. The DOL officials we spoke to in nine 
district offices could not provide the number of misclassification 
cases they referred to other agencies because they do not track this 
information. However, their responses indicated that district offices 
vary in how often they implement the procedures to refer cases to other 
agencies. Some of the DOL district offices told us that they notified 
IRS and state agencies when they found misclassification, while others 
told us that they had little or no contact with other agencies 
regarding misclassification issues. These district offices also 
reported that it was rare for them to receive misclassification 
referrals from other federal or state agencies. 

Conclusions and Recommendations for Executive Action: 

DOL investigators identify instances of employee misclassification when 
responding to minimum wage and overtime pay complaints. However, 
because the FLSA workplace poster does not provide an easy method for 
workers to report complaints, DOL may be missing opportunities to 
address other instances of potential misclassification. Improving the 
workplace poster would reinforce DOL's complaint-based strategy and 
would help further protect the wages of employees who may be 
misclassified. 

While DOL investigators conducting FLSA investigations are required to 
share information with other federal and state agencies whenever they 
find instances of possible violations of other laws, DOL district 
offices we studied varied in how often they forwarded misclassification 
cases to other agencies. DOL does not know the extent to which district 
offices refer misclassification cases to other agencies. DOL cautions 
investigators not to interpret laws outside their authority, but 
referring misclassification cases identified through FLSA 
investigations would not require DOL to interpret other agencies' laws. 
In addition, referring this information may assist other federal and 
state agencies in addressing misclassification. Furthermore, when DOL 
does not refer cases of misclassification, other agencies lose 
opportunities to fulfill their fiduciary duties in conserving 
government funds. 

To facilitate the reporting of FLSA complaints, we recommended that the 
Secretary of Labor instruct the Wage and Hour Division to revise the 
FLSA workplace poster to include national, regional, and district 
office telephone numbers and a Web site address that complainants may 
use to report alleged employee misclassification issues. Following the 
publication of our report, DOL notified the Congress that it was 
redesigning the poster and expected the work to be completed in spring 
2007. 

To facilitate addressing employee misclassification across federal and 
state programs, we recommended that the Secretary of Labor instruct the 
Wage and Hour Division to evaluate the extent to which 
misclassification cases identified through FLSA investigations are 
referred to the appropriate federal or state agency potentially 
affected by employee misclassification, and take action to make 
improvements as necessary. In addressing its referral mechanism, the 
Wage and Hour Division officials should consider building upon efforts 
by district offices currently engaging in referrals. Following the 
publication of our report, DOL notified the Congress that it was 
researching the nature and effectiveness of the referral of potential 
employee misclassification by different district offices to various 
federal and state agencies. DOL also noted that it will consider 
appropriate revisions to its procedures, and expected the work to be 
done by the end of September 2007. 

Mr. Chairmen, this concludes my prepared statement. I will be happy to 
answer any questions that you or other members of the subcommittees may 
have. 

GAO Contacts and Staff Acknowledgments: 

For future information regarding this testimony, I can be contacted at 
(202) 512-7215. Key contributors to this testimony were Brett 
Fallavollita and Linda Siegel. 

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FOOTNOTES 

[1] The $2.72 billion is intended to be an estimate of the magnitude of 
tax loss due to misclassification in 2006 dollars--not an updated 
estimate. The actual tax loss due to misclassification in 2006 may be 
higher or lower based on the tax rates, the level of independent 
contractors used in various sectors of the economy, and the types and 
levels of misclassification observed in 2006. 

[2] GAO, Employment Arrangements: Improved Outreach Could Help Ensure 
Proper Worker Classification, GAO-06-656 (Washington, D.C.: July 11, 
2006). In this report, we define "contingent work" as work arrangements 
that are not long-term, year-round, full-time employment with a single 
employer. 

[3] Estimates of the size and characteristics of the contingent 
workforce are based on CPS sample data and are subject to sampling 
error. For example, the 95 percent confidence intervals for percentages 
of the total workforce are within +/-1 percentage point of the estimate 
itself. For a full explanation of the methodology that we used and for 
the magnitude of sampling error for CPS estimates, see GAO-06-656. 

[4] GAO, Contingent Workers: Incomes and Benefits Lag Behind Those of 
Rest of Workforce, GAO/HEHS-00-76 (Washington, D.C.: June 30, 2000). 

[5] Complaints are a key component of DOL enforcement efforts under 
many federal labor laws. DOL enforcement generally relies on two types 
of information to identify potential violations: (1) complaints from 
individuals who believe they may have suffered a violation and (2) 
analysis of data to specifically target problematic industries or work 
sites.