• Alphabet’s Google scraps the minimum wage, and benefits rules for suppliers and staffing firms.
  • The 2019 policy is being removed to comply with evolving global and U.S. labour regulations regarding contingent workers. Additional measures taken in this regard include restricting access to internal systems by vendors and temporary workers.
  • The U.S. National Labour Relations Board has moved to make it more difficult for companies to avoid bargaining with temporary and contract workers.

Google, a division of Alphabet, announced on Friday that it will relax the rules requiring American staffing companies and suppliers to pay their workers at least $15 per hour and to offer health insurance and other benefits. This move may enable the tech companies to avoid engaging in collective bargaining.

Why Google eliminate benefits rules for suppliers and staffing firms

According to a representative for California-based Google, the 2019 policy is being removed in order to comply with evolving U.S. and international labour regulations about contingent workers. Additional measures taken to achieve this include restricting access to internal systems by vendors and temporary workers.

The spokesperson continued, “These updates simply clarify that Google is not and has never been the employer of our suppliers.” This puts them in line with other major corporations.

A Google representative stated on Friday that the company will keep up its enforcement of a code of conduct for suppliers, which mandates that suppliers and staffing companies maintain safe working conditions and fulfil their legal obligations. The spokesperson also stated that the majority of the company’s suppliers are based in states where a minimum wage of at least $15 is required.

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Follow-up information on this move

The announcement follows a January ruling by the U.S. National Labor Relations Board declaring that Google was required to engage in collective bargaining with its employees, who were employed by staffing firm Cognizant Technology Solutions, as a “joint employer.” Google is contesting the ruling. The board partially cited the 2019 policy, arguing that it gave Google the authority to manage the employees even though it does not hire them directly.

To make it harder for businesses to avoid engaging in negotiations with contract and temporary labour, the labour board last year adopted a rule stating that businesses that have indirect control over working conditions may be deemed to be the employers of contract labour. The rule was prevented from going into effect in March by a federal judge.