Skip to main content

Employment Arrangements: Improved Outreach Could Help Ensure Proper Worker Classification

GAO-06-656 Published: Jul 11, 2006. Publicly Released: Aug 02, 2006.
Jump To:
Skip to Highlights


Millions of U.S. workers participate in "contingent" employment, such as temporary or part-time work, and not in permanent or full-time jobs. The Department of Labor (DOL) enforces several labor laws to protect these and other workers, including the Fair Labor Standards Act (FLSA), which provides minimum wage, overtime pay, and child labor protections. In June 2000, GAO reported that contingent workers lagged behind standard full-time workers in terms of income, benefits, and workforce protections, and that some employees do not receive worker protections because employers misclassified them as independent contractors. GAO was asked to update this report by describing (1) the size and nature of the contingent workforce, (2) the benefits and workforce protections provided to contingent workers, and (3) the actions that DOL takes to detect and address employee misclassification. We analyzed DOL survey data on contingent workers and interviewed DOL officials.

Skip to Recommendations


Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Labor To facilitate the reporting of FLSA complaints, the Secretary of Labor should 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.
Closed – Implemented
The Department of Labor's Fair Labor Standards Act poster has been revised to prominently display the agency's toll-free numbers and web address. The poster is available for down loading on the Department of Labor's Wage and Hour Division website.
Department of Labor To facilitate addressing employee misclassification across federal and state programs, the Secretary of Labor should 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.
Closed – Implemented
The Department of Labor's Wage and Hour Division reviewed its internal processes for referral of potential employee misclassification to other agencies with all first-line field managers during a national managers training conference in May 2007. To ensure that all Wage and Hour Division district offices refer employee misclassifications that could lead to potential violations of laws enforced by other agencies, the first-line managers were reminded to follow the agency's longstanding Field Operations Handbook instructions and to refer such violations using the established form WH-124.

Full Report

Office of Public Affairs


Employee medical benefitsEmployee rightsLabor lawLabor statisticsPart-time employmentPensionsTemporary employmentFringe benefitsContingent workersLabor force