Businesses are using more contract workers than before the pandemic — even as regulators plan to step up enforcement

Businesses are using contractors more now than any point in recent memory, and a tight labor market means that’s likely to continue — despite increased scrutiny from regulators. The latest data, from payroll and benefits provider Gusto Inc., found payments to contractors have increased 23% over the last two years, and the ratio of contractors to full-time employees has grown 63% since 2019 — from about one in 10 to nearly one in five. “In this moment, particularly in the environment of talent tightness we have seen over the last two years an increase in contractors that small businesses are using,” said Gusto Senior Economist Liz Wilkie. “Businesses are having to get really creative about where their talent comes from, and they are acting in an agile and resourceful way to pull in this pool of talent.”