Google Should Google the Definition of ‘Employee’

https://www.nytimes.com/2019/05/29/opinion/google-contract-labor.html

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For many companies, hiring full-time employees has become a last resort, reserved for tasks that cannot be automated or outsourced or handed to an independent contractor. The goal is to keep the number of full-time employees as small as possible — and a key reason is that the government requires companies to take care of employees. Companies, in other words, are seeking to minimize the number of workers who must be treated fairly.

Google appears to be a leader in this field. Daisuke Wakabayashi of The Times reported this week that fewer than half of the people who work for the giant technology company are conventional full-time employees. Google has about 102,000 of those full-time employees and about 121,000 “TVCs,” a company term for temps, vendors and contract workers.

The use of contract labor is neither new nor inherently objectionable. Allowing short-term contracts for discrete projects can serve the needs of companies and workers. There is also clear logic in hiring specialized businesses to provide cleaning services or workplace security, just as companies have long paid other companies to market products or to provide hotel rooms. The Times, like most large American companies, uses contractors, including freelance writers.

But the reliance on contractors is only partly motivated by the benefits of specialization.

Companies like contractors because contractors are cheap. The staffing company OnContracting estimates that using contract workers rather than full-time employees can save tech companies an average of $100,000 per year per job. Such workers are paid less; receive fewer benefits; require less investment, for example in training; and impose fewer obligations. Companies generally do not contribute to the cost of health insurance for contract workers, nor do they contribute to retirement plans. Contract workers do not accrue vacation days, and they are usually not eligible for parental or medical leave. They can be let go at any time.

Companies could close that gap, of course. Google’s nonemployees mostly work for businesses that are paid by Google to provide specific services to the tech company. Google said last month that it would require those companies to pay a $15 minimum hourly wage to workers on Google contracts, and to provide benefits, including health insurance and parental leave.

But the inferior treatment of contractors is both the point of the system and necessary to maintain the system. Companies that treat contractors too much like employees can be held legally liable for treating those contractors like employees. Google explicitly describes this possibility as a “risk” in internal training documents — it does not want to treat its contractors like employees. Contractors are not allowed to attend internal meetings or holiday parties. They cannot participate in the company’s career advancement programs. Google, like many other large employers, also emphasizes ceremonial distinctions, for example giving red badges to contractors and white badges to conventional employees.

The government and private experts have struggled to measure the rise of nontraditional employment. The category is a catchall, and there is no precise definition of the boundaries.

One narrow but illuminating statistic is that workers hired by one company to work at the offices of another rose to roughly 2 percent of the work force in 2015, from 0.6 percent in 2005, according to a widely cited academic study. But that count does not include people who work at multiple offices, like cleaning crews. Nor does it include work that is outsourced to off-site contractors. The same study put the broader total around 12 to 13 percent of the work force. Other studies have estimated that as much of a third of the work force derives at least some income from nontraditional employment.

The use of such workers is particularly widespread in the tech industry. Experts estimate that contractors provide between a quarter and half of the labor at many large companies.

The Labor Department is responsible for policing the use of contractors, preventing companies from maintaining work forces of poorly compensated “permatemps.”

Workers can play a role, too, by organizing and collectively seeking to negotiate better working conditions. Google is able to rely heavily on contractors because people are willing to take the jobs, and because Google’s full-time employees have been willing to share the burden of their work with people who do not fully share in the benefits of that work. The company’s employees are not unionized, limiting their bargaining power. While some employees of Google’s contractors are unionized, they lack the leverage to force changes by themselves.

Last fall, Google workers staged a walkout to protest the company’s handling of sexual harassment allegations. In response, the company agreed to end forced arbitration of complaints — but only for complaints by conventional employees. Google’s workers should not have accepted that partial victory, which does not help most people who work for the company. The protest showed that tech workers have the power to force change. The question now is whether workers will fight for the rights of all of their colleagues.

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