Google underpaid thousands of international ‘shadow workers,’ violating labor laws around the world, reports reveal

Google New York Office
Google in Manhattan. Mark Lennihan/AP Photo
  • Google underpaid thousands of temporary workers around the world, The Guardian and NYT report.
  • Countries with “pay-parity” laws require equitable wages for full-time and temporary workers.
  • One manager worried a pay bump would allow staff to “connect the dots” and cause an uproar, emails reviewed by NYT showed.
  • See more stories on Insider’s business page.

Google underpaid thousands of international contract workers, violating pay-parity laws in several countries, The New York Times and The Guardian reported Friday.

The tech giant’s compliance department discovered the mistake but chose not to immediately compensate the underpaid temporary staff, according to the reports, and instead only corrected rates for new employees in the hopes of avoiding legal, financial, and reputational damage.

Alan Barry, a Google manager based in Ireland, feared that the dramatic pay increase would cause employees to “connect the dots” and “give rise to a flurry of noise/frustration,” according to internal emails reviewed by the Times.

“I’m also not keen to invite the charge that we’ve allowed this situation to persist for so long that the correction required is significant,” Barry wrote in an email, per NYT.

Pay-parity labor laws in Europe and Asia require companies to pay equitable wages to full-time and temporary workers who perform similar workplace duties, a protocol that does not exist in the US.

According to The Guardian, Google employs over 900 temporary workers throughout the UK, Ireland, India, Germany, the Netherlands, France, and Poland – all of which enforce local pay-parity laws.

“While the team hasn’t increased the comparator rate benchmarks for some years, actual pay rates for temporary staff have increased numerous times in that period,” Spyro Karetsos, Google’s chief compliance officer, said in a statement to Insider. “Most temporary staff are paid significantly more than the comparator rates.”

“Nevertheless, it’s clear that this process has not been handled consistently with the high standards to which we hold ourselves as a company,” he added. “We’re doing a thorough review, and we’re committed to identifying and addressing any pay discrepancies that the team has not already addressed. And we’ll be conducting a review of our compliance practices in this area. In short, we’re going to figure out what went wrong here, why it happened, and we’re going to make it right.”

Google’s temporary and contract workers reportedly outnumber its force of full-time employees, creating a “shadow workforce” that has attempted unionizing in recent years to fight for fair wages and benefits, Insider’s Katie Canales reported.

In some cases, Google barred contractors from communicating with full-time Googlers and made temps wear red badges that one employee said led to a “sense of shame” among the company’s temporary workforce, Insider’s Nick Bastone reported in 2019.

The New York Times and The Guardian both reported that the issue has been flagged to the SEC, as even though the same pay-parity laws do not exist in America, the lack of public disclosure of the issue could be viewed as a material impact to Google’s business, and one that should have been mentioned in company filings.