Google Will Require Full Benefits for its Contractor Workforce by 2022

Google Will Require Full Benefits for its Contractor Workforce by 2022

Google revealed on Tuesday that it was phasing in a policy that will require its outside suppliers to provide health insurance, paid parental leave benefits, and a $15 minimum wage to employees working for the tech giant on a temporary or contract basis. The announcement was made in an internal memo issued to all employees and shared with the Hill:

Google will now require that the outside companies employing the workers provide them with comprehensive health care, a minimum wage of $15 per hour, 12 weeks of parental leave and a minimum of eight days of sick leave.

Google is beginning the efforts in the U.S., where there are not specific regulations around paid parental leave or comprehensive health care. Other countries in which the company operates have specific legislation around paid parental leave and other benefits. The company said it made sense to start in the U.S. because Google is setting a standard.

Google is giving the “suppliers” — companies that employ the temporary workers and contractors — until January to institute the minimum wage requirements. A Google spokesperson said it will give suppliers until 2022 to institute comprehensive health care benefits.

Google has faced increasing pressure from its “TVC” (temporary, vendor, and contractor) workers, as well as an activist community of its full-time employees, to improve the conditions under which TVCs work for the company. A day before the memo was issued, the Guardian reported on a letter signed by more than 900 Google workers calling for significant changes in the way the company deals with its contingent workforce. The letter originated from TVCs working on the global “personality team” responsible for crafting the voice for Google Assistant, most of whom had their contracts abruptly and unexpectedly shortened in early March:

“During the process, our managers and the full-time workers on our team were silent,” the letter states. “Google told them that offering support or even thanking us for years of work would make the company legally liable. Our teammates were told to distance themselves from us at the moment when we were most in need – just so that Google could avoid legal responsibility.” …

The TVCs asked Google to “respect our contracts” by paying out the remaining length of contracts for those whose terms were shortened; “respect our humanity” by allowing FTEs to “openly empathize” with fired TVCs; and “respect our work” by converting TVCs to full-time status.

According to the letter, 54 percent of Google’s global workforce is made up of TVCs, but the company did not confirm this figure. In general, Silicon Valley tech companies rely heavily on contractors to play a variety of supporting roles, such as facilities management, custodial, and security services, as well as project-based professional work like what the TVCs on the Google Assistant personality team were doing. The new policy was not implemented suddenly in response to this letter, of course: A Google spokeswoman told the Guardian that it had been “in the works for a while.” It also has no impact on the authors of the letter or address their specific demands, so it may not entirely quell the activist movement within Google around this issue.

Over the past few years, amid increasing scrutiny of these practices, other tech companies have begun changing their policies toward contractors to ensure that they get benefits equal or at least closer to those enjoyed by full-time employees. Microsoft, for example, announced last August that it would begin requiring its suppliers with paid parental leave this year. In some cases, such as that of SurveyMonkey, these moves toward “benefits equality” have been prompted by pressure from those same full-time employees, who considered the disparity between themselves and their contractor co-workers unjust. This is a prime example of how employee activism is affecting major business decisions in the tech sector today.

It’s also about living up to ideals of fairness, improving the employer brand, and promoting retention and productivity, Rent the Runway co-founder and CEO Jennifer Hyman argued in a New York Times op-ed last year. Laws and regulations are changing at the state and local levels throughout the US that may require companies to provide these benefits to contingent workers in the years to come, so companies are getting ahead of these changes as well.

Google is such a massive player in the industry, its decision will have significant consequences for companies whose business models rely on contracts with Silicon Valley, as it will likely influence other tech companies to adopt similar policies. Benefits equality was already a growing trend in the tech sector and elsewhere; Google getting on the bandwagon marks a huge step forward.

(To learn more about how organizations use vendor policies to bolster their employer brand and act on their values, Gartner Diversity & Inclusion Leadership Council clients can read our case studies on how four organizations successfully implemented supplier diversity programs.)