'Caste System' at Google Shows What's Wrong with the Gig Economy

Recent leaks to media outlets have helped publicize Google’s alleged “shadow staffing” practices. In layperson’s terms: The company has been hiring more temporary and contract workers than full-time employees. Continued accusations from workers, coupled with Google’s struggles managing this controversy, together show the long-term risks posed by the gig economy—one in which many younger workers have long found themselves mired.

Google exemplifies the ‘gig economy’

Late last month, the New York Times interviewed anonymous sources (due to these employees’ nondisclosure agreements) and concluded that Google had 102,000 full-time employed staff versus 121,000 temporary and contract workers around the world.

Within the company, workers have organized walkouts and demanded fairer work conditions for temporary and contract workers. The person or group behind the Twitter handle Google Walkout For Real Change has alleged that Google, akin to how critics say the ride-hailing companies Uber and Lyft operate, increasingly relies more on temp and contract workers, who do not receive the same benefits as their full-time counterparts.

A caste system for tech workers?

Pradeep Chauhan, the owner of the contracting job search firm OnContracting, told the Times this perceived preference for contract workers over full-timers has been “creating a caste system inside companies.”

Google has not verified or commented on the claim that 54 percent of its workforce is contractors and temp workers. The company has not released an official response to these accusations but did announce it will implement workplace changes for its temporary and contract staff. Google said it will now require that the outside companies employing the workers provide them with comprehensive health care, a minimum wage of $15 per hour, 12 weeks of parental leave and a minimum of eight days of sick leave by 2022, according to an internal memo obtained by The Hill.

Contract work is hardly new in and beyond Silicon Valley, though critics often consider this practice as contributing to the expanding gig economy—an expansion that may benefit companies’ ledger sheets but not necessarily these workers’ employment and economic security. Instead of a standardized employment relationship—in which an employee is hired by a company and is therefore covered under regulations including labor laws, employment laws and workplace safety regulations—many industries have been part of the ongoing trend in which companies increasingly rely on independent contractors or employees. Uber and other ride-hailing companies, for example, have utilized this approach to hiring workers in order to streamline costs. According to OnContracting, large tech giants can save $100,000 a year per American job by using a contractor instead of a full-time employee, as quoted by many news sites.

Contract workers are making their voices heard

The premise of deciding to work as an independent contractor is that there are some perks, including the flexibility to choose their projects and assumptions that workers can make their own schedules. Working as a freelancer also allows these employees to, theoretically, seek out the best work opportunities and receive competitive rates from companies. Such an arrangement can benefit companies, too: They can review their staffing needs and hire, or release, workers for assignments and projects with more ease.

But many of these contract employees have long felt they are at a disadvantage and have been powerless to fight back against anything they see as an injustice. Now, workers are pushing back, and are pushing back hard, loudly making their claims about workplace discrimination against part-time, freelance and contract workers. At the same time, they are demanding more employee benefits—especially if companies are increasingly dictating terms and conditions that should only apply to full-time, W-2 workers. Watch for contract and temp workers to make their demands louder, have their voices heard, and pressure more companies to treat them fairly and ethically.

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