A New York Times report in 2019 called Google's 121,000-strong temporary workforce a shadow workforce that outnumbers its full-time employees.
A whistleblower filed a complaint to the Securities and Exchange Commission (SEC). The complaint stated that pay gaps between temporary workers and full time employees performing similar work have increased over the past few years. It was so large that the Guardian reported that it had broken local laws in the UK and Europe. Worse, the Guardian and New York Times have seen documents that reveal that Google managers found the problem last December and decided to not immediately address it. Instead, they waited and applied the correct rates for new hires.
Whistleblower Aid lawyers are representing the whistleblower. They claim that Google deceived investors in the US by failing to report any legal or financial liabilities it might face abroad. Google did not respond when The Verge asked for comment. However, Spyro Karetsos, Google's chief compliance officer, stated that it was clear that the process had not been conducted in accordance with the high standards we hold ourselves to as a company. He said, "It is evident that this process has not be handled consistent with our high standards...We are going to figure out why it happened and how to fix it."
The US does not require companies to pay temporary workers at the same rate as full-time employees. However, the NYT reports more than 30 countries have pay parity laws. Google had mapped comparable full-time positions in Europe, Africa, and the Middle East (EMEA) in 2012, 2013 and 2017, but did not update these rates.
This meant that staffing agencies who filled temporary positions were using outdated data, which didn't match the rising wages of full-time workers until compliance managers noticed it. Google continued to pay the old rates, despite managers arguing over what to do. The company claims that the back pay owed in over 16 countries over the past nine years totals more than $100,000,000.
Although there is no information available about whether the SEC is investigating, it is possible that Google will be subject to an inquiry or face a fine. This could make this even more costly. It shouldn't slow down Google and Alphabet. The parent company made $18.5 billion in profits during Q2 this year.
