The pay disparity was in violation of the local laws in UK, Europe and Asia, where it is mandatory to pay temporary workers the same wages as full-time employees performing the same work, unlike in the US. Despite being aware of the disparity, Google did not correct the pay rates for more than two years; it has now committed address the discrepancy though.
Google has been allegedly underpaying thousands of its temporary staff in at least 16 countries for several years, and despite being aware of the disparity it did not take measures to correct the pay rates for more than two years, internal documents and emails viewed by The New York Times and The Guardian have revealed.
In March 2019, Google had roughly 121,000 temporary staffers around the world, as against 102,000 full-time employees, NYT had reported in 2019. In the same year company executives became aware of the pay disparity, which was in violation of the local laws in UK, Europe and Asia, where it is mandatory to pay temporary workers the same wages as full-time employees performing the same work.
Worried that a sudden lifting of hourly rates by 20-30 percent would attract negative attention, Google held off payment corrections for two years. It applied the correct rates for new hires only in 2021.
Alan Barry, a Google manager based in Ireland, wrote an email to colleagues saying the situation lasted too long and would require significant pay corrections. “The cost is significant and it would give rise to a flurry of noise/frustration,” Barry wrote.
At one point of time, Google executives and attorneys agreed to pursue a plan to slowly come into compliance, knowing that such a move was not “the correct outcome from a compliance perspective,” The Guardian reported.
The decision to hold off payment corrections was flagged by a whistle-blower who filed a complaint with the US Securities and Exchange Commission (SEC) in June.
According to the complaint, Google may owe more than $100 million in back salaries in 16 countries for non-compliance over a period of nine years. Google spends about $800 million annually to pay its temporary workers across the world.
When contacted by the media, Google admitted to the charges and said an investigation would be conducted soon.
“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,” Spyro Karetsos, Google’s Chief Compliance Officer, said 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. We’re doing a thorough review and we’re committed to identifying and addressing any pay discrepancies that the team has not already addressed,” the statement read.
“And we’ll be conducting a review of our compliance practices in this area. In short, we’re going to figure out what went wrong here, why it happened, and we’re going to make it right.”
Though there is no law in the US requiring companies to pay temporary and full-time staffers the same wage, more than 30 countries, including India, where Google has offices have pay parity laws.