What’s an employer to do if they found out they had underpaid workers by millions of dollars what they were legally owed? If they had a conscience — or at least a fear of consequences — they could fess up and give them back pay owed. Google instead shrugged and dragged its feet on a remedy when it discovered that it had likely shorted some of its thousands of overseas temp workers for years, according to the New York Times and the Guardian.
The Times reported Friday that internal Google documents and emails reveal that the “gap in so-called benchmark rates between what Google paid full-time employees and temporary workers doing similar work had widened significantly,” potentially meaning the company was breaking the law in nations where similar levels of pay are mandated for similar positions. Google managers allegedly noticed the discrepancy but didn’t act to raise pay rates by the 20%-30% required to solve the problem, mainly out of fear a sudden adjustment would alert the press that something was screwy.
In sum, the Times wrote, Google may have shortchanged workers in at least 16 countries with pay parity laws around $US100 ($136) million over nine years. The paper noted that tally doesn’t include fines it could face from regulators or the cost of any resulting lawsuits. Though there is no U.S. pay parity law, a whistleblower reported the issue to the Securities and Exchange Commission in June 2021, saying Google had failed to notify investors of a potentially costly risk.
According to a separate report by the Guardian, Google executives were aware of the issue since at least May 2019.
The Times reported that while Google took care to pay bonuses to temps in some countries with equal pay laws to bring them closer to parity, Google execs identified at least 16 others including Brazil, Canada, Australia, and Mexico where the tech giant never bothered to identify or comply with equal pay laws. Google also fell afoul of similar laws in the United Kingdom, according to the Guardian.
Google employs over 150,000 temps and contractors, and executives may have been particularly wary courtesy of numerous media reports that many of those workers are treated like second-class citizens within Google. The vast majority of them work for “vendors” that handle outsourced tasks like the emotionally taxing job of moderating content, the Guardian wrote. But thousands of temps hired via staffing agencies work at Google, reporting to Google managers. The Guardian wrote that they receive pay amounting in the neighbourhood of $US800 ($1,085) million annually and largely work in marketing, recruitment, and Waymo, the self-driving car company owned by Google parent company Alphabet.
What happened, the Guardian reported, was that Google reviewed all of its temp roles in Europe, the Middle East, and Africa in 2012 and 2013, as well as Asia in 2017, to set comparison pay rates that were sent out to staffing companies. Then no one bothered to update the rates. The Guardian reported that Adrienne Crowther, an executive whose portfolio included Google’s extended workforce team, appears to have noticed the discrepancy on May 15, 2019. In the interim, Google’s compensation for full-time workers had risen by double-digit percentages, meaning the benchmark rates were way too low.
“Yikes! This seems WAY too old,” Crowther reportedly wrote. Alan Barry, a Google compliance manager in Ireland, wrote back that he agreed and that Google should “refresh” the data as part of a larger project regarding the future of temp workers at the company.
Google then spent at least two years paying the temps based on the old pay scales, all while behind the scenes Google bigwigs — who were presumably being paid well more than the legal minimum — debated how to prevent it from tarnishing their reputation.
One solution cooked up by the brain trust: Applying the correct rates for temp workers newly hired in 2021 and after, and letting the old temps phase-out. According to the Guardian, Crowther, fellow Google exec Deepak Negi, and its employment lawyers signed off on this plan.
One document from October 2020, the Guardian wrote, touted the so-called “natural correction” plan because of “the current low risk of a parity claim, the ability to correct rates and not make a great deal of noise, and the ability to correct rates without immediate substantial financial impact to [Google’s departments].” In an email obtained by the Times dated to December 2020, Barry reportedly wrote that raising rates for all temps would be best from a “compliance perspective” (i.e., the law) but doing so could let workers “connect the dots.” This would put Google’s temp staffing contractors in a “difficult position, legally and ethically,” with a “significant” cost and “a flurry of noise/frustration.”
“I’m also not keen to invite the charge that we’ve allowed this situation to persist for so long that the correction required is significant,” Barry added, according to the Times, somewhat understating the situation.
By February 2021, Google execs had shifted to a plan in which new temps would be hired according to new payscales, then backdating pay increases for existing temps. The plan didn’t include any accommodations for workers that had already left Google, the Guardian wrote.
Additionally, the Times established that in some cases temp jobs were paid on benchmark rates based on lumps of unrelated jobs, with one Google manager writing in an email they feared it was artificially lowering salaries. Another email the paper reviewed showed that a Google manager advised a colleague to set the pay rate for a temp role by comparing it to the “lowest common denominator” among full-time staff.
Google told the Times that it has already begun adjusting the pay rates, but also that many of the temps were making over the amounts established by the benchmark rates and/or had received raises during the time period it failed to update them.
“While the team hasn’t increased the comparator rate benchmarks for some years, actual pay rates for temporary staff have increased numerous times in that period,” Google chief compliance officer Spyro Karetsos told the Guardian in a statement. “Most temporary staff are paid significantly more than the comparator rates.”
“Nevertheless, it’s clear that this process has not been handled consistent with the high standards to which we hold ourselves as a company,” Karetsos added.
“… In short, we’re going to figure out what went wrong here, and we’re going to make it right.”
Google didn’t immediately reply to a request for comment from Gizmodo, but we’ll update when we hear back.