Google Alters Labor Policies: Scraps Minimum Wage and Benefits Rules for Suppliers

In an update on April 19, Alphabet Inc.’s Google announced its decision to retract the requirement for U.S. suppliers and staffing firms to pay their employees a minimum wage of $15 per hour and provide health insurance and additional benefits. This significant policy change could potentially enable Google to sidestep negotiations with labor unions.

The decision to abolish the 2019 policy, alongside other measures such as restricting the access of temporary workers and vendors to internal systems, is aimed at ensuring compliance with evolving U.S. and global labor regulations concerning contingent workers, as conveyed by a spokesperson from Google’s headquarters in Mountain View, California, to Reuters.

According to the spokesperson, “These updates bring us in line with other large companies and simply clarify that Google is not, and has never been, the employer of our suppliers’ employees.”

This announcement follows a ruling by the U.S. National Labor Relations Board in January, which classified Google as a “joint employer” of workers supplied by staffing firm Cognizant Technology Solutions and mandated negotiations with their union. Google has contested this ruling.

The board’s decision was partly influenced by the 2019 policy, which, despite Google not directly employing these workers, was seen to grant the company substantial control over them.

However, the labor board has been making efforts to tighten regulations to prevent companies from circumventing negotiations with temporary and contract workers. This includes implementing a rule last year that stated companies with indirect influence over working conditions could be deemed the employers of contract workers. A federal judge halted the implementation of this rule in March.

Despite the revision of its policies, Google assured that it would uphold a supplier code of conduct mandating vendors and staffing firms to ensure safe working conditions and comply with existing legal obligations.

Furthermore, the spokesperson highlighted that most of the company’s suppliers operate in states where the minimum wage is already set at or above $15 per hour.

This decision by Google marks a significant shift in its approach to labor practices, potentially impacting the treatment and compensation of thousands of workers employed through its suppliers and staffing agencies. It underscores the ongoing debate surrounding the rights and protections afforded to contingent workers in today’s evolving labor landscape.