About Half of Google's Workers Are Contractors Who Don't Receive the Same Benefits as Direct Employees (bloomberg.com)

Every day, tens of thousands of people stream into Google offices wearing red name badges. They eat in Google's cafeterias, ride its commuter shuttles and work alongside its celebrated geeks. But they can't access all of the company's celebrated perks. They aren't entitled to stock and can't enter certain offices. Many don't have health insurance. Bloomberg: Before each weekly Google all-hands meeting, trays of hors d'oeuvres and, sometimes, kegs of beer are carted into an auditorium and satellite offices around the globe for employees, who wear white badges. Those without white badges are asked to return to their desks. Google's Alphabet employs hordes of these red-badged contract workers in addition to its full-fledged staff. They serve meals and clean offices. They write code, handle sales calls, recruit staff, screen YouTube videos, test self-driving cars and even manage entire teams -- a sea of skilled laborers that fuel the $795 billion company but reap few of the benefits and opportunities available to direct employees.

Earlier this year, those contractors outnumbered direct employees for the first time in the company's twenty-year history, according to a person who viewed the numbers on an internal company database. It's unclear if that is still the case. Alphabet reported 89,058 direct employees at the end of the second quarter. The company declined to comment on the number of contract workers.

Comments

So what??

[SuperKendall]

I have been a contractor myself for many years, sometimes in huge groups of other contractors working for companies with employees.

I have also been on the other side, working for companies as an employee in teams that worked alongside large teams of contractors...

I think it should say a lot as to which situation is better that I have ended up working as a contractor for years instead of working as an FTE. If for no other reason than, overtime work really loses the sting when you are paid hourly...

Yes I lack some "benefits" a company might offer but I get more freedom in how to make up those "benefits". Because I work on contract I can take more vacation time than almost any company would allow. Because I work contract I can choose health care options that make sense to me and stick with them rather than being shifted around in changing company plans. And It's also lots easier to untangle myself from a bad contract than a bad employer... not to mention being more free to speak my mind since as a contractor I am generally free of politics (though on larger team of contractors that still can be a factor, but not as much as it is for employees).

Re:So what??

[110010001000]

But you wear a different colored badge.

Re:So what??

[Gilgaron]

Some places use contract hiring for entry level positions to essentially avoid paying benefits to otherwise full time staff. At a laboratory with lots of 'early career' scientists I worked at, the contracts weren't even uniform; if you knew somebody that needed a job you wanted to refer them to the 'good' contracting agency, as if you referred them directly to management they'd bring them in through the 'bad' contracting agency that had crappier terms, no PTO, etc. It is different than in software where the contractors are short term and set contracts favorable to them.

Re:So what??

[Jane Q. Public]

The thing is, there is a fine line between being a genuine contractor, and being an off-the-books "employee".

And Google could get in a lot of trouble if they turn out to be the latter.

The problem is that though the line is, fine, it is not fixed. It is generally determined on a case-by-case basis. In order to be a contractor:

* You are expected to know how to do your job. If it's something you have to be taught to do (more than a bit of reasonable orientation), you're probably an employee.

* You are expected to set your own hours. If you have to be there 9 to 5, or punch a time clock, or fill out a time card, you're probably an employee, not a contractor.

* You negotiate your own rates.

There are a few others. These rules are enforced by the IRS and a few other Federal agencies, but mainly the IRS.

IBM and rather famously Microsoft were both busted for having "off-the-books employees" which they called contractors. It cost them big.

Don't get stuck being an off-the-books employee. If you are, the company probably owes you back benefits.

And setting your own hours is not enough. You must have control over them. Even simply reporting the hours you worked to a client, in some circumstances, can be considered prima facie evidence of your status as an employee.

Re:So what??

[r1348]

To be honest, I'm one of those red badges, about to transition to FTE in a different .
I work in a relatively small office (around 300 people) so I can't really say about behemoths like Mountain View or Dublin, but in the day-to-day operations red badges are not much different than white ones. You still get invited to events and initiatives, you have lunch with whoever pleases you independently of badge color, and while it's true that you don't get full FTE benefits, that's simply because you're hired by a different company (I work for an actual company selling a service to Google, not a mere intermediary like Adecco). Health insurance is a very American concern, I live in a country with universal health care so the impact on the whole benefit package is much smaller.
It still allows you to enter in a big corporate environment and puts you in the radar for other big companies (that's exactly what happened to me, I didn't apply for my new position, I was proposed it).

Re:So what??

[ghoul]

In software too companies like Google , Apple etc use Contracting as a filter. You cant always tell in a 30 minute interview if the person is a good fit but once you have them as a contractor for a year you can very confidently recommend them for a FT position. And if not getting rid of a contractor is as easy as not renewing a contract. No action needed.
There is also the fact that some companies have taken a conscious decision to have a certain FTE-Contractor ratio. That way if times turn bad they dont have to do layoffs - just not renew contracts. Layoffs are bad PR while contract non renewal is a non issue. As a result many times they may have a Contract req in their budget but no fulltime req. In such a case if they find someone good they ask the contractor vendor manager to bring the person in as a contractor with the understanding that when a FT req opens up they will convert him/her
The contracting company is happy to oblige as they get some revenue.

Re:So what??

[thomn8r]

You make it sound like overtime was a thing everyone should be asking for.

I've been a contractor for about 30% of my IT career. Your employer has much more respect for your time when you're a contractor than when you're an FTE. When it costs them $200/hr, they're not quite so glib with the "Um yeah, I'm gonna need you to come in on Saturday..."

Industry Wide

[darkain]

This isn't a "Google" problem, this is an industry-wide problem. What larger tech company ISNT doing this?

Re:Industry Wide

[damn_registrars]

And when you were working as a contractor you benefited from living in a country with single-payer health care, which is not a benefit that workers in the USA can enjoy. You had health care automatically taken care of for you (by way of taxes that you paid on your wages regardless of how many hours you worked) while in the USA most workers encounter significant obstacles to buying health care unless they work at least 40 hours per week. Couple that to the fact that American workers are now legally obligated to carry insurance and you see one of the problems that exist in this country to those who might want to try to be contractors without full time employers.

In other words, the government - that you so love to tell us how much you hate - made it possible for you to do that.

Many don't have health insurance ???

[magarity]

Then they are in violation of the Affordable Care Act which requires everyone to purchase insurance or sign up for Medicare otherwise they face IRS fines.

What company isn't doing this?

[rsilvergun]

this is Uber & Lyft's entire business model (albeit taken to the extreme). Companies have broken the social contract. There's no longer any stability for workers. That plus the death of Unions and the end of collective bargaining is why wages are declining even though productivity is way, way up.

Time for a New New Deal.

diversity contractors

[Anonymous Coward]

Maybe I missed it in TFA, but I don't think that Google applies the same diversity requirements when hiring its contract employees as it does its permanent ones. I wonder what its employee demographics would show if they included contract workers into the total labor force.

Re:Not surprising

[ArhcAngel]

they also have a responsibility to obey Federal labor laws

And they do...right down to the letter of the law. Which allows them to hire contract labor for a temporary position for a period of up to one year. So about the 350th day of their contract (which also coincides with Christmas break in many cases) the position is eliminated and the contractor let go. Seven days later a new position with the same responsibilities is created and the contractor is offered a NEW position for another 350 days. Numerous tech companies (as well as many other industries) employ this practice.

Re: Sounds familiar...

[cayenne8]

This can also extend towards creating a second class citizen system where said contractors despite being with the same company for many years will be excluded from free or reduced price lunches, snacks, drinks, activities or even having their display names on emails, chats, or whatever else saying (Contractor) at the end. This is offset by said contractors receiving higher base salaries than they could if they were direct employees.

Yep.

Frankly, I'll take the extra $$$ over a free coke any day of the week.

I work for one thing...to earn money. Period.

If I didn't have to make money, say if I won the lottery, I'd not be wasting my life on a job working, I'd be out having fun doing what "I" want to do.

It is quite rare that people get paid to do exactly what they want to do, when and where they want to do it, fact of life.

Re:Not surprising

[lgw]

You're talking about a different kind of "contractor". These aren't the kind that set their own billing rate - they're the kind that work for a contracting company for peanuts (aka outsourcing). They're W2 employees of the actual contractor.

Re:Not surprising

[lgw]

That's not strictly true, as the corporate charter can spell out other priorities. But the board has to follow whatever that is (and by default it' the financial interest of the shareholders). You can, however, have a corporation where being "green" or "socially responsible" is a priority, as long as that's public before anyone buys stock. You just have to be clear about what "benefit of the stockholders" will mean, if it's not just money. Almost no one does that, of course.

Re:Not surprising

[Stolovaya]

Of course, then there's this:

https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits

FTA: "To quote the U.S. Supreme Court opinion in the recent Hobby Lobby case: “Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not.”"

It gets worse

[Waffle Iron]

The article forgot to mention the worst part of these contractors' jobs:

The team members with red badges who beam down to uncharted planets rarely make it back alive.

400 current shareholder resolutions on social iss

[raymorris]

Here are 400 current shareholder resolutions, in which shareholders are directing companies to prioritize various social issues, such as environmental issues:

https://www.greenamerica.org/s...

This is 400 cases this year of shareholders explicitly telling executives "we want you to do this socially responsible thing, even if it cuts into profits".

You're absolutely right that, lacking any other information, the default assumption is that investmentors would generally prefer to make money rather than lose money. That's a default assumption when their is no reason to believe otherwise.

On the other hand, it is well known that Ben & Jerry's stockholders wish to support certain social issues:
https://www.benjerry.com/whats...
The executives at Ben & Jerry's would breach their duty to shareholders if they invested corporate money in an oil company, because there shareholders wouldn't like that - even if it increased profits.

Re:Welcome the low lower class

[ghoul]

At Apple its reverse. Its very easy for Contractors to convert to FTE , much easier than for someone from outside to come in. And Apple does not provide anything free so its all the same. Contractors get to use the bus. Only thing which sucks is contractors dont get the 25% discount on iPhones so we buy Samsung ;) and use them inside Apple buildings.

Re: Not surprising

[datavirtue]

Speaking of slavery standards. It was mentioned the other day that Amazon caps wages at $176k per year. It hit me today, they probably do that to prevent poaching...as a way of fixing wages. Do other big tech companies have caps?

I remember a kerfuffle where the big tech companies were colluding at one point..is it possible that they skirted the law by all posting maximum salary caps?