The gap in so-called referral rates between what Google paid full-time employees and temporary workers doing similar work had widened significantly, according to internal company emails and documents reviewed by The New York. . Times. This was especially problematic in countries with so-called pay parity laws that required the company to pay temporary workers the same wages as full-time employees in similar positions.
But Google’s mistake had gone unnoticed outside the company. Managers were concerned that fixing the shortfall by suddenly raising hourly rates by 20-30% would draw attention to the problem and invite negative publicity to a company already criticized for creating a two-tier workforce of employees. generously compensated and less expensive full time. temps and contractors that are easy to hire and fire.
So Google landed on a solution that wouldn’t draw as much attention to the problem: It decided to apply the correct rates only for new hires starting in 2021, but put off the more expensive wholesale changes, according to revised company emails. By the times.
Alan Barry, a Google compliance manager in Ireland, wrote in an email to colleagues that adjusting rates for all their seasons was the right move from a “compliance perspective.” However, doing so could increase the likelihood that current Google temporary staff members will be able to “connect the dots” about the reason behind the pay increase and put the staffing agencies that supply and pay workers in “a difficult position. , legally and ethically “.
“The cost is significant and would lead to a blast of noise / frustration,” Barry wrote. “Nor am I willing to invite the accusation that we have allowed this situation to persist for so long that the required correction is significant.”
Google’s decision not to immediately correct payment rates for all current seasons was noted in June in a complaint to the National Stock Market Commission. Google may owe more than $ 100 million in back wages over nine years of non-compliance in 16 countries with wage parity laws, according to the complaint. The figure does not include possible fines or legal costs.
The complaint accuses Google of securities violations because it did not disclose the risk to investors. It is not clear whether the SECOND is currently investigating Google. The SEC did not respond to a request for comment.
In addition to the complaint, the Times separately reviewed dozens of internal documents and emails about Google’s management of its temps, offering unusual insight into how the company is dealing with mounting pressure to treat temps more like permanent employees. .
Google said this week that it had started making some changes to temporary payment rates. The company said that while the benchmark rates hadn’t changed for some years, the real wage of temporary workers had risen numerous times and that most temporary workers were being paid more than the salary ranges.
“It is clear that this process has not been managed in a manner consistent with the high standards that we hold ourselves to as a company,” Spyro Karetsos, the company’s chief compliance officer, said in a statement. “We’re going to find out what went wrong here, why it happened, and we’re going to correct it.”
The total number of temporary workers and contractors working 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 numbers but are not authorized to release them publicly. Google has said that temporary workers make up about 3% of its non-permanent staff. The vast majority are contract workers.
The company has said that temporary workers fill short-term positions 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 temporary roles stretch year after year.
There is no federal law that requires US companies to pay temporary and permanent employees the same wages for similar work, but other countries are passing laws to push for more equitable treatment. More than 30 have some form of wage parity laws for temporary workers.
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In countries with company-recognized equal pay laws, Google typically takes extra precautions to ensure that open temporary jobs are paid on par with appropriate full-time positions. In those countries, Google pays a 15% annual bonus to temporary employees, which is the same as the lowest bonus rate for its permanent employees. It generally does not pay bonuses to temporary workers in countries without equal pay requirements.
But last year, in an email from the company, a Google manager said that it appeared that 16 additional countries, including Brazil, Canada, Australia and Mexico, had some kind of equal treatment laws for temporary workers that the company he hadn’t properly recognized and hadn’t taken any. additional steps to comply with local laws.
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As more countries introduce new regulations, Google is forced to take action. In 2019, the Netherlands passed a law requiring Google’s staffing agencies to provide temporary workers with the same benefits as the company’s permanent employees, such as sick pay, maternity and other paid leave, health care. and stock grants. This change affected at least seven Google temporary workers in the country.
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“This is a situation we must avoid,” Barry wrote in an email to colleagues. It recommended that Google lay off the seven workers before the law took effect in 2020. Ultimately, Google said it decided to hire six of the temporary workers for full-time positions for the rest of their contracts. The other worker was fired but with three months’ pay, according to the company.
In recent years, Google has looked for ways to reduce the use of temporary workers. In 2018, Google started Project Bright light, an initiative that included a review of whether jobs were being categorized correctly as part of the “reestablishment of the work model.”
In an internal email from 2021, a Google executive said the company had reduced the number of temp employees by 2,700 since 2018. Most of those positions were outsourced, according to the email, while 750 temps became employees of full time.
The project also sought to establish wage parity for temporary workers with permanent employees doing similar jobs in the United States by 2019.
In a 2019 preliminary 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 pay 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 into the project, Google has struggled to advance equal pay for temporary workers.
In January 2020, Google apparently realized that it had been using outdated pay scales. In an email from the company reviewed by the Times, a Google manager said it had not reviewed European rates in eight years and three years in Asia.
This year, a company presentation exposed discrepancies for specific jobs. Google found that the comparison hourly wage for a mid-level temporary administrative assistant in Britain was £ 16.51 (about $ 22.86), based on what it paid full-time employees in that position in the past. . But an updated 2021 rate should be 40% higher, at 23.08 pounds.
Google uses Pontoon, a unit of staffing agency Adecco Group, to handle hiring temporary workers, and pays a premium to staffing agencies to find and be the employer of record for workers, according to company documents. Mary Beth Waddill, a Pontoon spokeswoman, said she did not disclose information about customer contracts.
“Pontoon does not set pay rates, and in countries with wage parity laws, we play a role in ensuring contingent workers are paid in accordance with the law,” he said.
When a Google manager wants to hire a temp, Pontoon provides “billing rate cards” with minimum and maximum wages based on what Google said it pays full-time employees in a similar role, according to documents from the company. Those salaries include a markup for the agencies and Pontoon.
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Although Google managers can pay above the maximum salary, outdated pay ranges provide a framework for setting the pay, according to a source familiar with the framework.
A Google manager expressed concern in an email that the company ranked temporary roles in ways that artificially lowered their pay scale when compared to many lower-paying, unrelated jobs. For example, according to a spreadsheet of European salary rates reviewed by the Times, massage therapists and lawyers belong to the same job category of “HR / Admin” and share the same basic salary rates, although managers have the discretion to pay different fees.
In another email, a manager said they were told to compare the pay for the temporary position not to the closest permanent job in terms of responsibilities and requirements, but to use the “lowest common denominator” or the most junior role within a job category.
As Google worked to assess how to correct temporary rates, according to emails seen by the Times, managers continued to openly weigh what it could do without negative attention.