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Google Businesses The Almighty Buck

About Half of Google's Workers Are Contractors Who Don't Receive the Same Benefits as Direct Employees (bloomberg.com) 192

Every day, tens of thousands of people stream into Google offices wearing red name badges. They eat in Google's cafeterias, ride its commuter shuttles and work alongside its celebrated geeks. But they can't access all of the company's celebrated perks. They aren't entitled to stock and can't enter certain offices. Many don't have health insurance. Bloomberg: Before each weekly Google all-hands meeting, trays of hors d'oeuvres and, sometimes, kegs of beer are carted into an auditorium and satellite offices around the globe for employees, who wear white badges. Those without white badges are asked to return to their desks. Google's Alphabet employs hordes of these red-badged contract workers in addition to its full-fledged staff. They serve meals and clean offices. They write code, handle sales calls, recruit staff, screen YouTube videos, test self-driving cars and even manage entire teams -- a sea of skilled laborers that fuel the $795 billion company but reap few of the benefits and opportunities available to direct employees.

Earlier this year, those contractors outnumbered direct employees for the first time in the company's twenty-year history, according to a person who viewed the numbers on an internal company database. It's unclear if that is still the case. Alphabet reported 89,058 direct employees at the end of the second quarter. The company declined to comment on the number of contract workers.

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About Half of Google's Workers Are Contractors Who Don't Receive the Same Benefits as Direct Employees

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  • So what?? (Score:5, Insightful)

    by SuperKendall ( 25149 ) on Wednesday July 25, 2018 @02:26PM (#57008436)

    I have been a contractor myself for many years, sometimes in huge groups of other contractors working for companies with employees.

    I have also been on the other side, working for companies as an employee in teams that worked alongside large teams of contractors...

    I think it should say a lot as to which situation is better that I have ended up working as a contractor for years instead of working as an FTE. If for no other reason than, overtime work really loses the sting when you are paid hourly...

    Yes I lack some "benefits" a company might offer but I get more freedom in how to make up those "benefits". Because I work on contract I can take more vacation time than almost any company would allow. Because I work contract I can choose health care options that make sense to me and stick with them rather than being shifted around in changing company plans. And It's also lots easier to untangle myself from a bad contract than a bad employer... not to mention being more free to speak my mind since as a contractor I am generally free of politics (though on larger team of contractors that still can be a factor, but not as much as it is for employees).

    • by 110010001000 ( 697113 ) on Wednesday July 25, 2018 @02:34PM (#57008506) Homepage Journal
      But you wear a different colored badge.
    • Re:So what?? (Score:4, Informative)

      by Gilgaron ( 575091 ) on Wednesday July 25, 2018 @02:35PM (#57008514)
      Some places use contract hiring for entry level positions to essentially avoid paying benefits to otherwise full time staff. At a laboratory with lots of 'early career' scientists I worked at, the contracts weren't even uniform; if you knew somebody that needed a job you wanted to refer them to the 'good' contracting agency, as if you referred them directly to management they'd bring them in through the 'bad' contracting agency that had crappier terms, no PTO, etc. It is different than in software where the contractors are short term and set contracts favorable to them.
      • by ghoul ( 157158 )

        In software too companies like Google , Apple etc use Contracting as a filter. You cant always tell in a 30 minute interview if the person is a good fit but once you have them as a contractor for a year you can very confidently recommend them for a FT position. And if not getting rid of a contractor is as easy as not renewing a contract. No action needed.
        There is also the fact that some companies have taken a conscious decision to have a certain FTE-Contractor ratio. That way if times turn bad they dont hav

    • Re:So what?? (Score:4, Informative)

      by Jane Q. Public ( 1010737 ) on Wednesday July 25, 2018 @02:40PM (#57008550)
      The thing is, there is a fine line between being a genuine contractor, and being an off-the-books "employee".

      And Google could get in a lot of trouble if they turn out to be the latter.

      The problem is that though the line is, fine, it is not fixed. It is generally determined on a case-by-case basis. In order to be a contractor:

      * You are expected to know how to do your job. If it's something you have to be taught to do (more than a bit of reasonable orientation), you're probably an employee.

      * You are expected to set your own hours. If you have to be there 9 to 5, or punch a time clock, or fill out a time card, you're probably an employee, not a contractor.

      * You negotiate your own rates.

      There are a few others. These rules are enforced by the IRS and a few other Federal agencies, but mainly the IRS.

      IBM and rather famously Microsoft were both busted for having "off-the-books employees" which they called contractors. It cost them big.

      Don't get stuck being an off-the-books employee. If you are, the company probably owes you back benefits.

      And setting your own hours is not enough. You must have control over them. Even simply reporting the hours you worked to a client, in some circumstances, can be considered prima facie evidence of your status as an employee.
      • Here's a question: do they have healthcare or not?

        Corp-to-corp contractors should get healthcare from their contracting corporation. Self-employed contractors...it must be a nightmare to manage that many contracts, holy crap.

        • by ebh ( 116526 )

          If you're a full-time employee of a contract house, you probably *can* get health insurance, but it won't be anything like what a large company (like the client) would offer. Until my wife went back to work full-time for a company with great benefits, we had my contract house's insurance, which cost us enough that we qualified for a medical expense deduction on our taxes every year.

          • by ghoul ( 157158 )

            I work for a contract house. Difference is I have a 25 dollar copay. The FTEs where I work have a 5 dollar copay. Both have same yearly caps and the FTEs get egg freezing covered. As a guy with 2 kids the egg freezing benefit is not really that big a difference.
            The point is many contract houses have good health insurance.

            On the other hand when in a design discussion I make a point , people listen as I am not a threat to their career or their budget unlike the other FTEs.

          • I've seen FTEs with shit insurance, too. I've seen full-time positions with crap like Aflac before the ACA.

    • You make it sound like overtime was a thing everyone should be asking for.

      • You make it sound like overtime was a thing everyone should be asking for.

        I'm really more saying that in software work It is inevitable, contractor or not.

        Being a contractor though means at least there is some reward for the loss of personal time.

        I personally would rather have more time than money. But more money and less time is still preferable to me than less money AND less time - and more money is always transferrable to more time as a contractor at some point as you can reduce your hourly load for a w

      • by thomn8r ( 635504 )
        You make it sound like overtime was a thing everyone should be asking for.

        I've been a contractor for about 30% of my IT career. Your employer has much more respect for your time when you're a contractor than when you're an FTE. When it costs them $200/hr, they're not quite so glib with the "Um yeah, I'm gonna need you to come in on Saturday..."

    • LMOL yeah ok Potsy, straight out of the Simpson's Episode “Kiss Kiss, Bang Bangalore" - Out sourcing save me...
    • and while there is still legal protections for pre-existing conditions. "Benefits" in America usually means health benefits. Everything else is nice but secondary.
    • I really regret contract work not being talked about when I was still a college student. I had never considered it versus a full time position.

      After starting to use recruiters to find work I ended up doing a couple of contract to hire deals. I had no idea it was so nice! I bill hourly and get paid weekly. I get to deduct business expenses and have control over my benefits. If I want to take a month-long vacation at the end of a contract I can do so. I have someone to represent and advise me; it's real

    • by ghoul ( 157158 )

      Yeah well certain Silicon valley companies (make i products) pay contractors only for 40 hrs irrespective of whether they are working 60 hr weeks and taking calls with offshore at night. The contractors all hope to become FTEs and get their own chance at exploiting contractors.

  • Industry Wide (Score:5, Insightful)

    by darkain ( 749283 ) on Wednesday July 25, 2018 @02:32PM (#57008486) Homepage

    This isn't a "Google" problem, this is an industry-wide problem. What larger tech company ISNT doing this?

    • by rsilvergun ( 571051 ) on Wednesday July 25, 2018 @02:59PM (#57008690)
      this is Uber & Lyft's entire business model (albeit taken to the extreme). Companies have broken the social contract. There's no longer any stability for workers. That plus the death of Unions and the end of collective bargaining is why wages are declining even though productivity is way, way up.

      Time for a New New Deal.
      • by lgw ( 121541 )

        That plus the death of Unions and the end of collective bargaining is why wages are declining even though productivity is way, way up.

        Thing is, all this shit changed in the 70s. It's not a recent change. And yet our standard of living went up very nicely from the 70s through around 2000. It's not obvious what changed, though political corruption has been getting worse since the 90s. Perhaps it passed some tipping point: the Bush/Obama bank "bailout" was the single largest looting of the treasury in US history, perhaps worse than all previous corruption combined. But that was many years after the change in ~2000.

        • Thing is, all this shit changed in the 70s. It's not a recent change. And yet our standard of living went up very nicely from the 70s through around 2000. It's not obvious what changed, though political corruption has been getting worse since the 90s. Perhaps it passed some tipping point: the Bush/Obama bank "bailout" was the single largest looting of the treasury in US history, perhaps worse than all previous corruption combined. But that was many years after the change in ~2000.

          The standard of living did not go up from the 70s-2000s. As the previous poster noted productivity went up but wages didn't. I'd *love* to go back in time and work in the 70s or 80s. I'd be making a lot more and housing would be far cheaper.

          • by Anonymous Coward

            "Wages have not risen as much as expected" is not at all the same as "the standard of living has not risen".
            Improved capabilities and lowered costs for computers, personal electronics, and telecommunications features are huge examples of increases in the standard of living. In the 1970s, there was NO amount of money that could get you a smartphone.
            The richest people in the world died of diseases you don't seriously think about.
            You travel faster, safer, and cheaper than the anyone in those days did.
            Your ent

            • "Wages have not risen as much as expected" is not at all the same as "the standard of living has not risen". Improved capabilities and lowered costs for computers, personal electronics, and telecommunications features are huge examples of increases in the standard of living.

              So how is life working for the Feds and finding ever new ways to try and convince the people that they are really getting ahead when it's obvious that they aren't? Hey cars, housing, and college costs doubled but congratulations - you get a larger TV at a lower price. That's surely a fair trade right?

              In the 1970s, there was NO amount of money that could get you a smartphone.

              I guess for some that would be a deal breaker. If you have much of a *real life* in the *real world* you will be fine.

              The richest people in the world died of diseases you don't seriously think about.

              Like heart disease and cancer? Those are still the main killers. Medical advances have

        • Somehow people have forgotten about the bank bailout.
    • Yup. I think it's due to the fact that regulations are much looser for contractors. If you have a company that has a mix of high-wage and low-wage jobs, chances are the high-wage jobs will be mostly filled with full-time employees and the low-wage jobs will mostly be filled by contractors. It sets up a pretty disgusting class segregation. I really think the only way to deal with it is to solve it at the regulatory level, to ensure that contractors have the same protections as full-time employees, and by

    • This isn't a "Google" problem, this is an industry-wide problem. What larger tech company ISNT doing this?

      This goes beyond even the tech industry to an ongoing global problem . Whether in the United States, Canada [theglobeandmail.com], Europe [apnews.com], or East Asia [straitstimes.com], you have more and more companies opting to use more and more contract labor. It's many of the same reasons: easy to hire and fire / surge, cheaper, etc.

    • by PPH ( 736903 )

      This is an experience and skill problem. People new in the job market have fewer skills and experience. A position as an employee is better for them. Once you become known in your industry for your skills and people seek you out specifically, being a contractor is much better.

  • by magarity ( 164372 ) on Wednesday July 25, 2018 @02:47PM (#57008608)

    Then they are in violation of the Affordable Care Act which requires everyone to purchase insurance or sign up for Medicare otherwise they face IRS fines.

    • by Anonymous Coward

      Don't have health insurance provided by Google. That doesn't mean they don't have health insurance. If they are a W2 employee of a contracting firm, they likely have health insurance through them. If they're a pure 1099 self employed contractor, that's on you, you work for yourself officially.

    • healthcare on your own costs thousands. So they're mostly young, healthy people hoping they don't get sick. Most won't. A few will and they'll be screwed. As an added bonus this is an easy and effective way to do age discrimination.

      Of course, that completely screws up the insurance pool. That's why folks like Bernie Sanders have been pushing for the biggest possible pool: everyone. Aka Medicare for all aka Single Payer.
      • by PPH ( 736903 )

        healthcare on your own costs thousands

        Per what time period? I'm a geezer and my private insurance is much less than a thousand per month.

        But then it depends on which group you are a member of. When I left Boeing (laid off), they offered me their insurance plan through COBRA. It turns out that the working population at Boeing is so old (and sick) that their group plan was a few hundred dollars a month MORE than the same benefit package bought privately.

    • by ghoul ( 157158 )

      Only companies with more than 50 employees are mandated to provide health insurance. Many contracting firms are mom and pop. They dont even have to pay the Employee part of social security (Well they do but they dont and by the time an IRS audit comes around the company will be dissolved and operating under another EIN)

  • by Anonymous Coward on Wednesday July 25, 2018 @03:02PM (#57008704)

    Maybe I missed it in TFA, but I don't think that Google applies the same diversity requirements when hiring its contract employees as it does its permanent ones. I wonder what its employee demographics would show if they included contract workers into the total labor force.

    • by ghoul ( 157158 )

      Most contractors are visa employees. The contracting firms do their visas and Green cards. Once they have green cards Apple and Google hire them as employees. This way their statistics on visa employees vs non visa employees look good (GCs and citizens are counted in the same bucket)

  • by p51d007 ( 656414 )
    You're surprised? How do you think Walmart, Amazon, Google etc, make so much money?
  • if they are working 29+ hours health insurance is buy law unless they are 1099's but the IRS may not see it that way. even more so if they told to be at desk at X time.

    • Most contractors in big companies are subcontracted out by "manpower" type umbrella companies which pool together contractors and rent them out to large companies, taking a cut from their hourly wages in exchange for doing HR and sometimes providing benefits. The big companies are invoiced per hour for all contractors, not per person, not 1099 or W2. Think when you go to a shop to fix your car - if you get charged for 30hrs of labour, you are not suddenly required to buy the mechanic health insurance becaus
      • but you are not dealing the mechanic week after week. But if you are working w2 for manpower week after week then they must give you health insurance

        • by ghoul ( 157158 )

          And most contracting companies do provide health insurance. Only mom and pop contracting firms with less than 50 employees dont.

        • Even if you paid the shop for 1000 hrs of work, you're still not obligated to buy any health insurance for anyone. Some people do pay hundreds of hours of labor to restoration shops or customization shops. The mechanic is not your employee, they perform a service for which you get billed for, just happens that the price of the service depends on hours spent.. Same with contractors, they are not employees of the company for which they do work for - their hours are billed as a service.
  • by Anonymous Coward

    I'm a contractor.

    I would f*cking die if I had to have a permanent job.

    I work for three months and then take the rest of the year off.

    The idea of going into a job, day after day, week after week, month after month, year after year - UNTIL YOU ARE OLD AND YOU NEVER LIVED JUST WORKED THEN YOU DIE -

    Who the hell wrote this article *complaining* about contracting?

    If they want to work full time for their entire lives, go right ahead.

    Don't fuck it up for the rest of us.

  • by Waffle Iron ( 339739 ) on Wednesday July 25, 2018 @04:31PM (#57009310)

    The article forgot to mention the worst part of these contractors' jobs:

    The team members with red badges who beam down to uncharted planets rarely make it back alive.

  • by Anonymous Coward

    Google is repeating Microsoft's history.
    https://www.theregister.co.uk/2000/06/30/ms_casts_its_permatemps_into/
    https://www.seattletimes.com/business/microsoft/microsoft-tries-to-reassure-contractors-about-rule-changes/
    https://www.cnet.com/news/microsoft-permatemp-checks-finally-arrive/

  • This is the case at all the big tech companies I've seen. I've been stuck in the contractor grind for some time. Some folks seem to like it, I do not. You are treated as a lower class everywhere I've been, you won't be at moral events, you won't get stock, most companies are requiring the hiring agencies that place you to provide some health care and some PTO but it won't be at parity with a "true" employee. You usually will get paid less in the end and at many companies you have a "sell by" date that
    • by ghoul ( 157158 )

      At Apple its reverse. Its very easy for Contractors to convert to FTE , much easier than for someone from outside to come in. And Apple does not provide anything free so its all the same. Contractors get to use the bus. Only thing which sucks is contractors dont get the 25% discount on iPhones so we buy Samsung ;) and use them inside Apple buildings.

  • I have about for dozen friends between high school and college that work at Microsoft, and as far as I know, all of them receive worse benefits than a real Microsoft employee.

  • In general, contractors have been involved in staff meetings right alongside full time employees. If it was project related, they needed to know as much as the employees.

    The ONLY times I have ever seen contractors excused was when there was bad news to be handed out about the companies situation. And then we were all reminded that this info. had not yet been released publicly, so we were now prohibited from trading the company stock for a period of time. When we all made it back to our desks, the contracto

    • by ghoul ( 157158 )

      Highly doubt contractors have stock in the company they are working at. Its dumb to put all eggs in one basket. Employees get free stock so they have company stock but it would be dumb for a contractor to use real money to buy stock in the company they are contracting at.

  • You have your upper tier skilled contractors (I suspect a fair few here) who are brought in on very good money to complete a project or do a specialist task. In Australia, they'd make at least 100 to 200k a year. Day rates exceeding $500/700 a day. I'd assume in US / SF, these people would be 200k+ minimum.

    Then you have 'normal' IT workers, doing basic work, account creation, service desk, back up and restore teams, desktop support. These guys aren't really specialists (not anymore) and there's a volume

  • Can't speak for Google or employees in the USA - but here in the UK contractors might not get the free perks, but more than make up for it in the additional money they earn.

    A FTE project manager on £55k has a day rate of around £211. A bog standard contract project manager can easily earn double that. If you're a really good PM then you can earn three times that amount.

    All of the contractors I know wouldn't want to give that up for some free hors d'oeuvres, free beer and the ability

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