Google Will Require Contractors to Pay $15 an Hour

Google Will Require Contractors to Pay $15 an Hour

Contractors and staffing agencies that want to send workers to Google must pay at least $15 an hour by 2020 and provide certain health care and paid-time-off benefits by 2022, the company has announced.

Earlier this year, the Mountain View, Calif.-based tech giant said it would no longer require workers to privately arbitrate employment-related claims instead of filing lawsuits in court. The policy decisions come as Google employees and worker-advocacy groups put pressure on the company to change certain employment practices they perceive as unfair.

We've rounded up the latest news on this topic. Here are SHRM Online resources and news articles from other trusted media outlets.

Workers Demand Equal Treatment

One the same day that 915 Google workers signed a letter demanding fair treatment for temporary and contract workers, the company announced in a memo that business partners that provide such staff must offer comprehensive health care, at least $15 an hour, 12 weeks of paid parental leave and eight annual sick days.  Although the directive won't cover self-employed independent contractors, it will extend to vendor employees who work in Google's cafes and provide other onsite services, such as security and transportation.

(The Hill)

Half of Google's Workforce Affected 

Temporary, vendor and contract workers are known internally at Google as TVCs and are sometimes characterized as the company's "shadow workforce." TVCs account for more than half of the company's worldwide workforce, but they generally earn lower wages than employees and don't receive health care benefits. "These are meaningful changes, and we're starting in the U.S., where comprehensive healthcare and paid parental leave are not mandated by U.S. law," said Eileen Naughton, Google's vice president of people operations, in the letter to employees announcing the new mandate. "As we learn from our implementation here, we'll identify and address areas of potential improvement in other areas of the world."


[SHRM members-only online discussion platform: SHRM Connect]

$15 Federal Minimum-Wage Bill Moves Forward

Worker advocates have successfully lobbied tech companies and some state and local governments to raise minimum wages to $15 an hour. Additionally, Congress is currently considering a similar measure that would increase the federal minimum wage from $7.25 an hour to $15 an hour over the next six years. The bill was introduced by Rep. Bobby Scott, D-Va. It would also eliminate separate minimum wages for tipped workers and workers with severe disabilities.

(SHRM Online)

McDonald's Stops Lobbying Against Wage Hikes

In March, McDonald's told the National Restaurant Association that it would stop participating in lobbying efforts against federal, state and local minimum wage increases. In a letter to the association, McDonald's noted that corporate-owned stores pay an average starting wage of $10 an hour. The fast-food chain doesn't control the wages offered by franchisees, but the letter said corporate leaders "believe the average starting wage offered by those independent business owners is likely similar." Under former President Barack Obama's administration, the National Labor Relations Board sued McDonald's as a "joint employer" for alleged labor-law violations committed by franchisees. The lawsuit asserted that employees were disciplined for participating in "Fight for $15" protests aimed at raising the minimum wage.


New Joint Employer Standards Proposed

The NLRB and the Department of Labor (DOL) have proposed rules to limit joint-employer liability under the National Labor Relations Act and the Fair Labor Standards Act, respectively. To be a joint employer under the NLRB's proposed rule, a franchisor or contractor must directly control another entity, such as by recommending that a franchisee or subcontractor fire employees. Under the current standard, indirect control—reserving the right to suggest that another entity fire someone but not exercising that right—would be enough to show a franchisor or contractor is a joint employer. The DOL's proposal would establish a four-factor test analyzing whether a potential joint employer exercises the power to hire or fire an employee, supervise and control an employee's work schedules or employment conditions, determine an employee's rate and method of pay, and maintain a worker's employment records.

(SHRM Online)



Hire the best HR talent or advance your own career.

Salary Increase Projections for 2022

Revised 2022 Salary Increase Budgets Head Toward 4%

Revised 2022 Salary Increase Budgets Head Toward 4%



HR Daily Newsletter

News, trends and analysis, as well as breaking news alerts, to help HR professionals do their jobs better each business day.