In December, a group of Google executives in charge of overseeing thousands of its temporary staff members discovered that the company had been paying few of these workers for years.
The gap in so-called benchmarks between what Google paid full-time employees and temporary workers doing similar jobs had widened significantly, according to company emails and internal documents reviewed by The New York Times. This was especially problematic in countries with so-called wage parity laws that require the company to pay temporary workers the same wages as full-time employees in similar positions.
But Google’s lapse had gone undetected outside the company. Managers were concerned that the solution to the shortcoming by suddenly reducing hourly rates by between 20% and 30% would draw attention to the problem and invite negative publicity from a company that was already criticized for creating a staff of two levels with generously compensated and less expensive full-time employees. workers and contractors easy to hire and fire.
Therefore, Google came up with a solution that would not draw much attention to the problem: it decided to apply the right rates only for new hires from 2021, but kept with more expensive wholesale changes, according to the company emails reviewed by Time.
Alan Barry, a Google compliance manager in Ireland, wrote in an email to colleagues that adjusting rates for all his time was the right step from a “compliance perspective”. However, doing so may increase the likelihood that current Google temporary agents can “connect the dots” on the reason behind pay and place the staffing agencies that supply and pay workers in “a difficult, legal situation. and ethically. ”
“The cost is significant and would result in a rain of noise / frustration,” Barry wrote. “I am also not interested in inviting the post that we have allowed this situation to persist for so long that the necessary correction is significant.”
Google’s decision not to immediately correct all-time payment rates was noted in June in a whistleblower complaint to the Securities and Exchange Commission. According to the complaint, Google may owe more than $ 100 million in subsequent wages for nine years of non-compliance in 16 countries with wage parity laws. The figure does not include possible fines or court costs.
The complaint accuses Google of securities violations because it has not disclosed the risk to investors. It is unclear whether the SEC is currently investigating Google. The SEC did not respond to any requests for comment.
In addition to the complaint, the Times separately reviewed dozens of documents and internal emails about Google’s management of its temporary workers, offering an unusual insight into how the company is dealing with growing pressure to treat workers more like permanent employees.
Google said this week that it had started making some changes to temporary payment rates. The company said that while benchmarks had not changed in a few years, the real wages of temporary workers had risen numerous times and most of the time they were paid more than the pay ranges.
“It is clear that this process has not been managed in accordance with the high standards to which we stand as a company,” Spyro Karetsos, the company’s head of compliance, said in a statement. “We’ll find out what went wrong here, why it happened and we’ll do well.”
The total number of contractors and temporary workers at Google exceeds 150,000, while Google’s parent company, Alphabet, has 144,000 full-time employees, according to people who are familiar with the figures, but are not allowed to disclose them. them publicly. Google has said that temporary workers make up about 3% of its non-permanent staff. The vast majority are subcontracted workers.
The company has said the times occupy short-term functions to replace employees on leave or when a sudden business need arises for a maximum period of two years. In some cases, Google employees said the temporary functions are extended year after year.
There is no federal law that requires U.S. companies to pay temporary wages and permanent employees the same wages for similar jobs, but other countries pass laws to promote more equal treatment. More than 30 have some form of pay parity law for the times.
(OPTIONAL TRIM BEGINS).
In countries with company-recognized pay equality laws, Google typically takes additional precautions to ensure that open temporary jobs are paid at the same time as suitable full-time jobs. In these countries, Google pays a 15% annual bonus on time, which is the same as the lowest bonus rate for its permanent employees. He usually does not pay bonuses on time in countries without equal salary requirements.
But last year, in an email from the company, a Google manager said it appeared that 16 additional countries, including Brazil, Canada, Australia and Mexico, had some form of equal treatment laws for at a time that the company had not properly recognized and had not taken any additional steps to comply with local laws.
(OPTIONAL COMPLETION).
As more countries introduce new regulations, Google is forced to take action. In 2019, the Netherlands passed a law requiring Google staffing agencies to provide time for the same benefits as the company’s permanent employees, such as sick pay, maternity and other paid leave, care medical and action grants. This change affected at least seven Google temporary workers in the country.
(OPTIONAL TRIM BEGINS).
“This is a situation we should avoid,” Barry wrote in an email to classmates. He recommended that Google lay off the seven workers before the law goes into effect in 2020. Ultimately, Google said it decided to hire six of the temporary workers in full-time positions for the rest of the contracts. According to the company, the other worker was released but with a three-month salary.
In recent years, Google has looked for ways to reduce the use of temporary workers. In 2018, Google launched Project Brightlight, an initiative that included a review of whether jobs were being properly classified as part of the “restoration of the work model”.
In a 2021 internal email, a Google executive said the company had reduced the number of times by 2,700 since 2018. Most of those positions were outsourced, according to the email, while 750 times they became full-time employees.
The project also aimed to establish wage parity for permanent employees who would perform similar jobs in the United States in 2019.
In a preliminary 2019 study to weigh the financial impact of taking this step in the United States, where Google employs more than half of its temporary workers, the company estimated it would cost up to $ 52 million to earn more than $ 4,000. temporary workers up to the minimum wage of a newly hired permanent employee.
Internal communications seen by the Times indicate that three years after the project, Google has struggled to move forward on equal pay for time.
In January 2020, Google apparently realized that it had used obsolete pay scales. In a company email reviewed by the Times, a Google manager said he had not reviewed European rates for eight years and three years in Asia.
This year, a presentation from the company outlined the discrepancies for specific jobs. Google found that the hourly comparison salary for a mid-level temporary administrative assistant in the UK was £ 16.51 (approximately $ 22.86), according to what it used to pay full-time employees for this role in the past. . But an updated rate for 2021 should be 40% higher, at £ 23.08.
Google uses Pontoon, a unit of the Adecco Group personnel agency, to manage the hiring of time and pays a premium to the personnel agencies to find and be the registered employer of the workers, according to company documents. Pontoon spokeswoman Mary Beth Waddill said she did not disclose information about customer contracts.
“The pontoon does not set wage rates and, in countries with wage parity laws, we have an important role to play in ensuring that contingent workers are remunerated in accordance with the law,” he said.
When a Google manager wants to hire a temporary company, Pontoon provides “bill rate cards” with minimum and maximum salaries based on what Google said it pays full-time employees with a similar role, according to company documents. These salaries include an increase for agencies and Pontoon.
(OPTIONAL COMPLETION).
While Google administrators can pay above the maximum salary, obsolete payment ranges provide a framework for setting the salary, according to a source familiar with the framework.
A Google manager expressed concern in an email that the company was classing temporary jobs in a way that artificially reduced its pay scale by comparing them to many unrelated jobs and lower pay. For example, based on a spreadsheet of European wage rates reviewed by the Times, massage therapists and lawyers belong to the same “HR / Admin” work family and share the same basic wage rates, though that administrators have the discretion to pay different fees.
In another email, a manager said they were told to compare pay for the temporary job not to the nearest permanent job in terms of responsibilities and requirements, but to use the “lowest common denominator.” or the youngest role within a job category.
While Google was working to assess how to correct time rates, according to emails the Times saw, managers continued to openly weigh what they could do without negative attention.
The gap in so-called benchmarks between what Google paid full-time employees and temporary workers doing similar jobs had widened significantly, according to company emails and internal documents reviewed by The New York Times. This was especially problematic in countries with so-called wage parity laws that require the company to pay temporary workers the same wages as full-time employees in similar positions.
But Google’s lapse had gone undetected outside the company. Managers were concerned that the solution to the shortcoming by suddenly reducing hourly rates by between 20% and 30% would draw attention to the problem and invite negative publicity from a company that was already criticized for creating a staff of two levels with generously compensated and less expensive full-time employees. workers and contractors easy to hire and fire.
Therefore, Google came up with a solution that would not draw much attention to the problem: it decided to apply the right rates only for new hires from 2021, but kept with more expensive wholesale changes, according to the company emails reviewed by Time.
Alan Barry, a Google compliance manager in Ireland, wrote in an email to colleagues that adjusting rates for all his time was the right step from a “compliance perspective”. However, doing so may increase the likelihood that current Google temporary agents can “connect the dots” on the reason behind pay and place the staffing agencies that supply and pay workers in “a difficult, legal situation. and ethically. ”
“The cost is significant and would result in a rain of noise / frustration,” Barry wrote. “I am also not interested in inviting the post that we have allowed this situation to persist for so long that the necessary correction is significant.”
Google’s decision not to immediately correct all-time payment rates was noted in June in a whistleblower complaint to the Securities and Exchange Commission. According to the complaint, Google may owe more than $ 100 million in subsequent wages for nine years of non-compliance in 16 countries with wage parity laws. The figure does not include possible fines or court costs.
The complaint accuses Google of securities violations because it has not disclosed the risk to investors. It is unclear whether the SEC is currently investigating Google. The SEC did not respond to any requests for comment.
In addition to the complaint, the Times separately reviewed dozens of documents and internal emails about Google’s management of its temporary workers, offering an unusual insight into how the company is dealing with growing pressure to treat workers more like permanent employees.
Google said this week that it had started making some changes to temporary payment rates. The company said that while benchmarks had not changed in a few years, the real wages of temporary workers had risen numerous times and most of the time they were paid more than the pay ranges.
“It is clear that this process has not been managed in accordance with the high standards to which we stand as a company,” Spyro Karetsos, the company’s head of compliance, said in a statement. “We’ll find out what went wrong here, why it happened and we’ll do well.”
The total number of contractors and temporary workers at Google exceeds 150,000, while Google’s parent company, Alphabet, has 144,000 full-time employees, according to people who are familiar with the figures, but are not allowed to disclose them. them publicly. Google has said that temporary workers make up about 3% of its non-permanent staff. The vast majority are subcontracted workers.
The company has said the times occupy short-term functions to replace employees on leave or when a sudden business need arises for a maximum period of two years. In some cases, Google employees said the temporary functions are extended year after year.
There is no federal law that requires U.S. companies to pay temporary wages and permanent employees the same wages for similar jobs, but other countries pass laws to promote more equal treatment. More than 30 have some form of pay parity law for the times.
(OPTIONAL TRIM BEGINS).
In countries with company-recognized pay equality laws, Google typically takes additional precautions to ensure that open temporary jobs are paid at the same time as suitable full-time jobs. In these countries, Google pays a 15% annual bonus on time, which is the same as the lowest bonus rate for its permanent employees. He usually does not pay bonuses on time in countries without equal salary requirements.
But last year, in an email from the company, a Google manager said it appeared that 16 additional countries, including Brazil, Canada, Australia and Mexico, had some form of equal treatment laws for at a time that the company had not properly recognized and had not taken any additional steps to comply with local laws.
(OPTIONAL COMPLETION).
As more countries introduce new regulations, Google is forced to take action. In 2019, the Netherlands passed a law requiring Google staffing agencies to provide time for the same benefits as the company’s permanent employees, such as sick pay, maternity and other paid leave, care medical and action grants. This change affected at least seven Google temporary workers in the country.
(OPTIONAL TRIM BEGINS).
“This is a situation we should avoid,” Barry wrote in an email to classmates. He recommended that Google lay off the seven workers before the law goes into effect in 2020. Ultimately, Google said it decided to hire six of the temporary workers in full-time positions for the rest of the contracts. According to the company, the other worker was released but with a three-month salary.
In recent years, Google has looked for ways to reduce the use of temporary workers. In 2018, Google launched Project Brightlight, an initiative that included a review of whether jobs were being properly classified as part of the “restoration of the work model”.
In a 2021 internal email, a Google executive said the company had reduced the number of times by 2,700 since 2018. Most of those positions were outsourced, according to the email, while 750 times they became full-time employees.
The project also aimed to establish wage parity for permanent employees who would perform similar jobs in the United States in 2019.
In a preliminary 2019 study to weigh the financial impact of taking this step in the United States, where Google employs more than half of its temporary workers, the company estimated it would cost up to $ 52 million to earn more than $ 4,000. temporary workers up to the minimum wage of a newly hired permanent employee.
Internal communications seen by the Times indicate that three years after the project, Google has struggled to move forward on equal pay for time.
In January 2020, Google apparently realized that it had used obsolete pay scales. In a company email reviewed by the Times, a Google manager said he had not reviewed European rates for eight years and three years in Asia.
This year, a presentation from the company outlined the discrepancies for specific jobs. Google found that the hourly comparison salary for a mid-level temporary administrative assistant in the UK was £ 16.51 (approximately $ 22.86), according to what it used to pay full-time employees for this role in the past. . But an updated rate for 2021 should be 40% higher, at £ 23.08.
Google uses Pontoon, a unit of the Adecco Group personnel agency, to manage the hiring of time and pays a premium to the personnel agencies to find and be the registered employer of the workers, according to company documents. Pontoon spokeswoman Mary Beth Waddill said she did not disclose information about customer contracts.
“The pontoon does not set wage rates and, in countries with wage parity laws, we have an important role to play in ensuring that contingent workers are remunerated in accordance with the law,” he said.
When a Google manager wants to hire a temporary company, Pontoon provides “bill rate cards” with minimum and maximum salaries based on what Google said it pays full-time employees with a similar role, according to company documents. These salaries include an increase for agencies and Pontoon.
(OPTIONAL COMPLETION).
While Google administrators can pay above the maximum salary, obsolete payment ranges provide a framework for setting the salary, according to a source familiar with the framework.
A Google manager expressed concern in an email that the company was classing temporary jobs in a way that artificially reduced its pay scale by comparing them to many unrelated jobs and lower pay. For example, based on a spreadsheet of European wage rates reviewed by the Times, massage therapists and lawyers belong to the same “HR / Admin” work family and share the same basic wage rates, though that administrators have the discretion to pay different fees.
In another email, a manager said they were told to compare pay for the temporary job not to the nearest permanent job in terms of responsibilities and requirements, but to use the “lowest common denominator.” or the youngest role within a job category.
While Google was working to assess how to correct time rates, according to emails the Times saw, managers continued to openly weigh what they could do without negative attention.