Google Could Be Violating Labor Laws With Pay for Temp ...

The gap in so-called benchmark rates between what Google paid full-time employees and temporary workers doing similar work had widened ... Technology|GoogleCouldBeViolatingLaborLawsWithPayforTempWorkershttps://www.nytimes.com/2021/09/10/technology/google-temporary-workers-labor-laws-pay.htmlCredit...HokyoungKimSupportedbyContinuereadingthemainstoryReadinappByDaisukeWakabayashiSept.10,2021InDecember,agroupofGooglemanagersresponsibleforoverseeingthousandsofitstemporarystaffmembersdiscoveredthecompanyhadbeenunderpayingsomeofthoseworkersforyears.Thegapinso-calledbenchmarkratesbetweenwhatGooglepaidfull-timeemployeesandtemporaryworkersdoingsimilarworkhadwidenedsignificantly,accordingtointernalcompanyemailsanddocumentsreviewedbyTheNewYorkTimes.Thiswasespeciallyproblematicincountrieswithso-calledpayparitylawsrequiringthecompanytopaytemporaryworkersthesamewagesasfull-timeemployeesinsimilarpositions.ButGoogle’slapsehadgoneundetectedoutsidethecompany.Themanagersworriedthatfixingtheshortfallbysuddenlyliftinghourlyrates20percentto30percentwouldcallattentiontotheproblemandinvitenegativepublicitytoacompanyalreadycriticizedforcreatingatwo-tierworkforceofgenerouslycompensatedfull-timeemployeesandlessexpensivetempsandcontractorswhoareeasytohireandfire.SoGooglelandedonafixthatwouldn’tcallasmuchattentiontotheproblem:Itdecidedtoapplythecorrectratesforonlynewhiresstartingin2021butheldoffonmoreexpensive,wholesalechanges,accordingtocompanyemailsreviewedbyTheTimes.AlanBarry,aGooglecompliancemanagerinIreland,wroteinanemailtocolleaguesthatadjustingtheratesforallofitstempswasthecorrectmovefroma“complianceperspective.”However,doingsomightincreasethelikelihoodthatGoogle’scurrenttemporarystaffmemberscould“connectthedots”aboutthereasonbehindthepaybumpandplacethestaffingagenciesthatsupplyandpaytheworkersin“adifficultposition,legallyandethically.”“Thecostissignificantanditwouldgiverisetoaflurryofnoise/frustration,”Mr.Barrywrote.“I’malsonotkeentoinvitethechargethatwe’veallowedthissituationtopersistforsolongthatthecorrectionrequiredissignificant.”Google’sdecisiontonotimmediatelycorrectthepayratesforallcurrenttempswasflaggedinJuneinawhistle-blowercomplainttotheSecuritiesandExchangeCommission.Googlemayowemorethan$100millioninbacksalariesovernineyearsofnoncompliancein16countrieswithpayparitylaws,accordingtothecomplaint.Thefiguredoesnotincludepossiblefinesorlegalcosts.ThecomplaintaccusesGoogleofsecuritiesviolationsbecauseitfailedtodisclosetherisktoinvestors.ItisnotcleariftheS.E.C.iscurrentlyinvestigatingGoogle.TheS.E.C.didnotrespondtoarequestforcomment.Inadditiontothecomplaint,TheTimesseparatelyrevieweddozensofdocumentsandinternalemailsaboutGoogle’smanagementofitstemporaryworkers,offeringanunusualglimpseintohowthecompanyisgrapplingwithgrowingpressuretotreattempsmorelikepermanentemployees.Googlesaidthisweekthatithadstartedtomakesomechangestotemppayrates.Thecompanysaidthatwhilebenchmarkrateshadnotchangedforsomeyears,actualpayfortemporaryworkershadincreasednumeroustimesandthatmosttempswerepaidmorethanthepayranges.“It’sclearthatthisprocesshasnotbeenhandledconsistentwiththehighstandardstowhichweholdourselvesasacompany,”SpyroKaretsos,thecompany’schiefcomplianceofficer,saidinastatement.“We’regoingtofigureoutwhatwentwronghere,whyithappened,andwe’regoingtomakeitright.”ThetotalnumberoftempsandcontractorsworkingatGoogleexceeds150,000,whileGoogle’sparentcompany,Alphabet,has144,000full-timeemployees,accordingtopeoplewhoarefamiliarwiththefiguresbutarenotpermittedtodisclosethempublicly.Googlehassaidtemporaryworkersaccountforroughly3percentofitsnonpermanentstaff.Thevastmajorityareoutsourcedworkers.ImageGooglehasstartedtomakesomechangestopayratesforitstemporaryworkers,thecompanysaid.Credit...ChristieHemmKlokforTheNewYorkTimesThecompanyhassaidtempsfillshort-termrolestostandinforemployeesonleaveorwhenasuddenbusinessneedarisesforamaximumtermoftwoyears.Insomecases,Googleemployeessaid,temporaryrolesextendyearafteryear.ThereisnofederallawrequiringU.S.companiestopaytempsandpermanentemployeesthesamesalariesforsimilarwork,butothercountriesarepassinglawstopushformoreequaltreatment.Morethan30havesomeformofpayparitylawsfortemps.Incountrieswithequalpaylawsrecognizedbythecompany,Googlenormallytakesextraprecautionstomakesureopentemporaryjobsarepaidonaparwiththeappropriatefull-timepositions.Inthosecountries,Googlepaysa15percentannualbonustotemps,whichisthesameasthelowestbonusrateforitspermanentemployees.Itusuallydoesnotpaybonusestotempsincountrieswithoutequalpayrequirements.Butlastyear,inacompanyemail,aGooglemanagersaiditappearedthat16additionalcountries,includingBrazil,Canada,AustraliaandMexico,hadsomeformofequaltreatmentlawsfortempsthatthecompanyhadnotproperlyrecognizedandhadnottakenanyextrastepstobecompliantwiththelocallaws.Asmorecountriesintroducenewregulations,Googleisbeingforcedtotakeaction.In2019,theNetherlandspassedalawthatrequiresGoogle’sstaffingagenciestoprovidetempswiththesamebenefitsasthecompany’spermanentemployees,suchassickpay,maternityandotherpaidleaves,healthcareandstockgrants.ThischangeaffectedatleastsevenGoogletempworkersinthecountry.“Thisisasituationweoughttoavoid,”Mr.Barry,Google’scompliancemanager,wroteinanemailtocolleagues.HerecommendedthatGooglefireallsevenworkersbeforethelawwentintoeffectin2020.Ultimately,Googlesaidithaddecidedtohiresixofthetempworkerstofull-timepositionsfortheremainderoftheircontracts.Theotherworkerwasletgobutwiththreemonths’pay,accordingtothecompany.Inrecentyears,Googlehassoughtwaystocutbackitsuseoftemporaryworkers.In2018,itstartedProjectBrightlight,aninitiativethatincludedareviewofwhetherjobswerebeingcategorizedcorrectlyaspartof“labormodelreset.”Inoneinternal2021email,aGoogleexecutivesaidthecompanyhadreducedthenumberoftempsby2,700since2018.Mostofthosepositionswereoutsourced,theemailsaid,while750tempswereconvertedtofull-timeemployees.TheprojectalsosoughttoestablishpayparityfortempswithpermanentemployeesdoingsimilarjobsintheUnitedStatesby2019.Inapreliminary2019studytoweighthefinancialimpactoftakingthisstepintheUnitedStates,whereGoogleemploysmorethanhalfofitstempworkers,thecompanyestimatedthatitwouldcostupto$52milliontobringpayfor4,000-plustemporaryworkersuptotheminimumpayofanewlyhiredpermanentemployee.InternalcommunicationsviewedbyTheTimesindicatethatthreeyearsintotheproject,Googlehasstruggledtomakeprogressonequalpayfortemps.InJanuary2020,Googleapparentlyrealizedthatithadbeenusingout-of-datepayscales.InacompanyemailreviewedbyTheTimes,amanagersaidGooglehadn’treviewedEuropeanratesineightyearsandthreeyearsinAsia.Thisyear,acompanypresentationlaidoutthediscrepanciesforspecificjobs.Googlefoundthatthecomparisonhourlywageforatemporary,midleveladministrativeassistantinBritainwas16.51pounds(about$22.86),basedonwhatitpaidfull-timeemployeesinthatroleinthepast.Butanupdated2021rateshouldbe40percenthigherat£23.08.GoogleusesPontoon,aunitofthestaffingagencyAdeccoGroup,tohandlethehiringoftemps,anditpaysapremiumtostaffingagenciestofindandbetheemployerofrecordfortheworkers,thecompanydocumentssaid.MaryBethWaddill,aspokeswomanforPontoon,saiditdidnotdiscloseinformationaboutclientcontracts.“Pontoondoesnotsetpayrates,andincountrieswithpayparitylaws,weplayaroleinensuringthatcontingentworkersarepaidinadherencewiththelaw,”shesaid.WhenaGooglemanagerwantstohireatemp,Pontoonprovides“billratecards”withminimumandmaximumwagesbasedonwhatGooglesaiditpaidfull-timeemployeesinasimilarrole,accordingtocompanydocuments.ThosewagesincludeamarkupfortheagenciesandPontoon.EventhoughGooglemanagersareallowedtopayabovethemaximumwage,theoutdatedpayrangesprovideaframeworkforsettingpay,accordingtoasourcefamiliarwiththeframework.OneGooglemanagerexpressedconcerninanemailthatthecompanyclassifiedthetemporaryrolesinwaysthatartificiallylowereditspayscalebycomparingthemtomanyunrelatedandlower-payingjobs.Forexample,basedonaspreadsheetofEuropeanpayratesreviewedbyTheTimes,massagetherapistsandlawyersfallunderthesamejobfamilyof“HR/Admin,”andtheysharethesamebasicpayrates—althoughmanagershavediscretiontopaydifferentrates.Inanotheremail,amanagersaidtheyweretoldtocomparepayforthetemprolenotwiththepermanentjobclosestintermsofresponsibilitiesandrequirements,butinsteadusethe“lowestcommondenominator”orthejunior-mostrolewithinajobcategory.AsGoogleworkedtoassesshowtocorrecttheratesfortemps,accordingtoemailsviewedbyTheTimes,managerscontinuedtoweighopenlywhatitcoulddowithoutnegativeattention.AdvertisementContinuereadingthemainstory