As the Guardian found out, Google deliberately underpaid temporary workers in dozens of countries and postponed tariff adjustments to hide the problem. According to documents and internal correspondence, top managers of Google have known since at least May 2019 that the company’s actions are contrary to the laws of the UK, Europe and Asia: temporary workers should receive the same money as employees in the state.
However, instead of addressing the problem immediately, the company was dormant for more than two years: it would have to increase the costs of maintaining departments that rely on temporary workers, and there were concerns about lawsuits and press attention.
The problem became known after a whistleblower Aid whistle-blower filed a complaint about Google’s labor misconduct with the US Securities and Exchange Commission (SEC). Although international labor law is not within the jurisdiction of the department, violations were massive – obligations could amount to up to $ 100 million. That is, Google may have deliberately distorted quarterly financial statements, violating the requirements of securities laws.
Google relies heavily on what it calls “Extended staff” – Around the world, the company uses the services of more than 100 thousand temporary workers, suppliers and contractors who are not on the staff, but perform work on its behalf. Jobs can range from catering and security to software development and data analysis. In most cases it is “Suppliers”who work on long-term projects like content moderation and have minimal contact with Google employees.
In addition, the company always has a lot of temporary workers – they are paid by recruitment agencies, but they are already subordinate to Google managers. Waymo, which develops self-driving cars and is owned by Alphabet, is most actively pursuing such a personnel policy. Google spends $ 800 million annually to pay such workers. This is standard practice, but hardly in such quantities: the “shadow work force” in the company is much larger than the regular staff, for which Google has been criticized by its own employees, politicians and trade unions. More than 30 countries, including the United Kingdom, Europe, India and Taiwan, have “pay parity” or “equal treatment” laws that prevent full-time employees from gaining benefits over temporary workers: pay, working hours, breaks , vacations, benefits – all equally. There is no such law in the USA.
In 2012 and 2013, Google began hiring temporary workers in Europe, the Middle East and Asia (EMEA) by establishing “Comparative rates”… The rates were passed on to recruitment agencies, which did the rest. In 2017, this Google talent model hit the Asia Pacific (APAC). Since “Comparative rates” were not indexed, while salaries for employees increased from 2017 to 2020.
For the first time in the documents, the problem was mentioned on May 15, 2019 – this was done by Adrienne Crowther, head of the Google Extended Workforce Team (xWS – extended workforce team). She noted in internal correspondence that the tariffs for 2012 and 2013 are out of date.
According to one of the documents, as of February 16, 2021, Google had 1,030 temporary employees in countries with pay parity laws. Given the turnover, the number of victims over the entire time can be in the tens of thousands.
According to Google’s internal calculation, the cost of 1,200 temporary workers needs to be increased by $ 17.3 million to bring salaries in line with the law: $ 12.65 for the employees themselves and $ 4.4 for recruitment agencies. However, this calculation is made only for new employees and does not take into account compensation for those who were previously underpaid. According to another internal memo dated February 2021, temporary workers are paid 12-50% less than they should.
The first concrete action was taken in October 2020, when Ms Crowther, fellow executive Deepak Negi and Google’s EMEA and APAC employment consultants signed a plan to adjust the rates. According to this plan “Natural correction”, new temporary workers begin to receive remuneration in accordance with the law, while old ones continue to work at the same rates. The plan received approval from management and lawyers, although some xWS employees expressed concern that as a result, people would receive different pay for the same job. They also feared that recruitment agencies might have unnecessary questions with different rates.
In an email dated December 2020, Alan Barry, the Compliance Attorney, approved “Natural correction”, while recognizing it as insufficient. However, in his opinion, it was the right decision: other departments of Google would be unhappy with the unexpected increase in costs. As a result, questions could arise as to why the situation did not change for so long, although the responsible persons knew about it.
In February 2021, they already began to consider an option in which rates would increase for both new and existing temporary workers – compensation for those who received less money and had already stopped working was not discussed. In the end, it was decided that the damage would be predominantly reputational, since the threat of litigation was not considered very large.
The Guardian contacted Google, which acknowledged the problem and promised to conduct an internal investigation: “Despite the fact that comparative rates have not increased for several years, the actual volume of remuneration for temporary personnel has increased several times over this period. Most temporary workers receive significantly more than the comparative wage. However, it is clear that this process did not meet the high standards that we hold as a company. We will conduct a thorough analysis and make every effort to eliminate any pay gaps that our team has not yet addressed. In short – we will find out what went wrong, why it happened and we are going to fix it “…