Google Drops Minimum Wage and Benefits Requirements for Suppliers and Staffing Firms

Alphabet Inc.’s Google announced on Friday its decision to retract the mandate requiring US suppliers and staffing firms to pay their employees at least $15 an hour and offer health insurance and additional benefits. This move is anticipated to allow the tech giant to avoid negotiations with unions.

The 2019 policy, which included measures such as restricting temporary workers and vendors from accessing internal systems, is being eliminated to align with evolving US and global labor regulations concerning contingent workers, according to a Google spokesperson based in Mountain View, California. “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,” the spokesperson told Reuters.

This announcement follows a January ruling by the U.S. National Labor Relations Board (NLRB) that labeled Google a “joint employer” of workers sourced through staffing firm Cognizant Technology Solutions, necessitating negotiations with their union. Google is contesting this ruling. The 2019 policy, which was believed to grant Google control over the workers despite not directly employing them, had an impact on the board’s decision. The NLRB has been tightening regulations, making it harder for companies to evade negotiations with temporary and contract workers. Last year, it adopted a rule stating that companies with indirect control over working conditions may be classified as employers of contract workers. However, a federal judge halted the implementation of this rule in March.

Despite retracting the wage and benefit mandates, Google will maintain a supplier code of conduct. The company requires vendors and staffing firms to ensure safe working environments and meet existing legal obligations. Additionally, the spokesperson mentioned that the majority of Google’s suppliers work in jurisdictions where a $15 minimum wage is required by law.

Google’s policy change reflects the company’s response to shifting labor regulations and underscores its efforts to delineate its role concerning the employment terms of its suppliers’ workforce.