>[...] But those two-year contracts are written in stone. Workers like Wait are not usually allowed to apply either to renew their contracts or to do the same job as a Google employee. If they want to keep working in the same job, they have to leave the data center for six months and then come back and apply again — but neither Google nor Modis will tell workers why.
>[...] Google likely requires the six-month leave due to federal employment law, Barbara Figari, an employment attorney in California, told Protocol.
Yes. All companies got rattled by Microsoft losing their lawsuit with permatemp contractors in 2000: https://www.google.com/search?q=microsoft+contractors+lawsui...
Before the Microsoft settlement, I was able to sell my services directly to the client company as a 1099 freelance contractor because I did not want to be an employee. But after that, all companies got paranoid about contractors and I then had to go through a middleman bodyshop as a "fake" W-2 employee. The programming bodyshop then skims a fee from my hourly rate to provide a "lawsuit shield" for the client that wants to pay for my services.
It's worth noting that you can usually contract directly with a company as long as you maintain scoped part-time contracts with multiple companies, instead of a single open-ended long-term contract with a single company. It's true that independent contractors are somewhat disadvantaged by this whole setup, but we should also recognize that voluntary independent freelance contracting of this type is quite a privileged position and it's good our desired style of work isn't being used to undermine the rights of W-2 employees.
Honestly asking.
It used to be the people at the top could have their cake & eat it too, where sometimes they'd have long open-ended contracts with a company directly - maintaining independence but also getting a steady paycheck. Now they have to shack up with one of these bodyshops that gets a fat cut of their labor, which disincentivizes the setup. I was certainly glad to get out of it; the whole operation felt shady from start to finish. Politically, this class of people used to be available as cover for the entirety of the contracting workforce. Did lawmakers really want to rob these All-American Mavericks of their Freedom? Anything that further disincentivizes the mock W-2 job route is a good thing IMO. The current situation of course is not sufficient but it's better than the free-for-all it used to be. I guess you could say it has hightened the contradictions.
Some might say given the reality of these distinctions within independent contractors, we should segregate protections based on income. I don't think that'll work. Any policy targeted at helping only those of lower means will quickly become a policy to be watered down further and further and further as all the incentives in the system are aligned toward greater exploitation. By including all classes of independent contractor in any legislation, we make it stronger against attacks that would land hardest on the worst off. If that shuts down some avenues of employment for people at the top, well, so be it. I don't think scoped contracts will ever go away.
Worth noting this entire thing is to some degree a sideshow of the larger debate about health insurance and how it's tied to employment. If medicare for all were passed, a lot of these issues would just go away.
Universal healthcare/dental/paid leave would allow for companies who’s employees currently are the only receivers of these “benefits” to not require companies to hold onto people so long.
Worker protections are supposed to be so that catastrophic job loss is less catastrophic and companies can’t just arbitrarily decide they need 20000 people one month and 0 the next. But we should definitely look into a better deal for the workers and give companies less power over their livelihood.
For me, and probably many on this board, the biggest risk is "works-for-hire". Under US law, contractors have strong legal protections of their own intellectual protection. Whereas it's much easier for a W-2 employer to claim IP made in personal time.
I don't really care about healthcare of unemployment insurance. I'm well compensated enough that I can buy my own high-deductible insurance and have more than enough assets to feed myself between jobs. Forcing freelancers into W-2 status is just another example of the government screwing people over "for their own good".
It's the government screwing _some_ people over for the good of everyone else, where it's presumed that "good of everyone else" is worth more to society than what is lost by those that get screwed over by it.
At least, that's generally the intent.
Not to the employees in question. Clearly the frame and interview content of the linked article is that these employees WANT to be permanent employees. But they're not allowed to be because their employer wants the flexibility to terminate them at any time. The fact that the two year contract exists is just a side effect.
Yes, there are real people who want to do contract work. They exist, though it's relatively rare and clustered in careers (software is one) where short term work makes sense. But that's not who we're talking about here. These are datacenter maintenance folks, they want steady work.
And off topic, but:
> I don't really care about healthcare of unemployment insurance.
This is something only ever said by young people who have never been sick (or had a family member suffer from) with a career-threatening condition. Yes, in your 20's it sounds like self-insurance is totally doable. Wait until you have four dependents or until you need to arrange for a parents' surprise retirement.
I've heard this mentioned a lot but how often does it happen and how much of a risk is it? Employees developing IP in personal time doesn't seem like it would be that common.
I don't know how it is in the US but we have the same issues in France.
The law is called "délit de marchandage" and what it means, essentially, is that a contractor is treated like an employee but without the benefits of an employee.
The idea of the law is that contract work is fine, but the contractor has to stay independent. For example, if I want to have an Indian do the work for me, that's my right as a contractor, my only obligation is to deliver what we agreed upon in the contract. Obviously, it is not always practical, I may want to hire a consultant for a specific task because I don't have the expertise and it is not worth hiring someone for just that one task. That's where the 2 years rule comes from. If I have to hire a consultant, full time, for 2 years, then it is not just a mission anymore and I need to hire an employee.
Finding someone to fill in for a secretary on maternity leave is fine, but open ended contacts on their equipment and schedule without some specific task is just opening them up to lose another lawsuit.
The job market is pretty different though for full time employees - one part of which is the insane contractor usage at big companies with money. Microsoft is still like 50% contractors, and in this area if you have "contractor for a bigco" attached to your resume I'd estimate you'll be talked to by far fewer recruiters, and then offered less lucrative work. Also as others have stated you'll have up to 60% of what the company pays for your work taken by the contracting agency especially if they do "management" for their workforce.
Then benefits are a real thing. I have some healthcare needs which require me to have consistent insurance that isn't going to force me to other providers just because I switch. Retirement investing without a 401k is basically all cash since the roth and regular IRA limit is so low. I'm still figuring out how that will work, whether I should incorporate as a consultant so I can provide a 401k to myself, or just not bother with it and just invest.
If you're contracting out your services to only one company, and they have primary say over when and how you work[1], then that's not a genuine "contractor" relationship; you're an employee that they're taking advantage of by paying less and not providing benefits to.
If you really do want to be a contractor, who sells their services to many companies, sets their own hours, and has primary control over their tasks and such, then by all means do so. But please don't try to make things worse for the vast majority who do not want these things by advocating for stripping away protections from people who are being abusively and illegally misclassified as contractors.
[1] I don't recall offhand all the various specific aspects of a job that define whether you're logically a contractor or an employee, but I do remember that it's basically "if your livelihood depends entirely on one company paying you, and/or they have near-total control over how you do your work, you're an employee, whatever the paperwork says".
Under existing IRS guidelines, a company can't arbitrarily determine which workers are full employees and which are contractors. The business has to be able to prove when a worker meets certain key legal definitions about contract work, and, if they fail, they would be required to treat the contractor as if they were an employee, according to Figari.
"One of those guidelines is whether there is a written contract or employment benefits. The other aspect is, is the relationship a continuing one, and is it a key aspect of the business," Figari said. Companies will try to work around this by saying: "If it's cut off at a specific timeline, we were able to get by without them for six months. They are not a key aspect of our business, and [the role] is not a continuing one," she explained.
That is how it is if you are a contractor working for any tech company.
The actual shitty part about being a "contractor" is you are almost always a W2 for the contracting firm. Which means you get none of the benefits of actually being a real contractor. As a 1099 you can:
* Deduct (and potentially charge for) a ton of shit like travel expenses, hardware, software, internet, phones, home office, etc
* Set up a SEP IRA which lets you contribute 25% of your salary up to $58,000. This is far more than what you can contribute to an employer sponsored 401k (though as a W2 your employer can top your 401k to the same limit)
* Bill as high of a rate as you can get away with
* Easily work multiple gigs at once
* Use your own tools.
* It's your own business, literally. So act like it!
The drawbacks to a 1099 are:
* You are your own collection agency. Some clients are very slow to pay you.
* You have to pay your own social security and stuff
* You pay full freight for healthcare
* You are not entitled to unemployment
* Taxes get a little more complex
* You are a "flake" in the eyes of a bank... so getting loans for houses and stuff is a little harder.
As a W2 working through a bodyshop you get:
* Paid weekly no matter how slow their client is paying
* They provide you equipment... no matter how shitty it is
* Maybe some kind of shitty healthcare offering that disqualifies you from buying your own plan and deducting it on your taxes
* Maybe some kind of shitty retirement plan that disqualifies you from contributing pre-tax money to your own IRA
* You can collect unemployment. Helpful for that 6 month break.
* You get paid at a substantially lower rate than whatever they are billing the client.
* You are a cog in a machine.
Given their "fuck it" roots, I'm not actually sure how much of a shield they provided between you and Microsoft's Accounts Payable. I bet they paid you every week like most of these staffing firms no matter how fast or slow Microsoft felt like paying its invoices. I'm also pretty sure they provided you with equipment (though how that works if you are also a 1099... I'm not sure).
What a lot of people who haven't done true 1099 work don't realize is... people and companies can be incredibly slow paying you. And as a 1099 you are your own collection agency so it's upon you to hassle them into paying you.
What I'm saying is... if there is a will there is a way. I bet there is more than a few Microsoft contractors who act like their own agency. It's probably a lot of paperwork, and I have no clue if it is worth it.
When I was first starting out, and still struggling to get a good stable of clients, delayed payment was often something I let slide in negotiations. Better to secure a 100k contract w/ payment 3-6(!) months out than risk losing out to another shop.
Even though I was bringing in a lot of income, cash flow was a constant struggle. It took a long time to build up enough billable work to smooth out income curve over time.
The worst of it was when I was just transitioning from a single man shop to bringing on additional help. Conversion from independent 1099 to having your own subs, or worse, trying to carry people on overhead is hard. As the owner, you've bought into the idea of lean times, and variable income, but staff expect to be paid every week. Gogo credit cards as short term emergency bridge loans.
Ahh, the fun of being a small business owner.
Instead of going through a body shop, which I refused to do, Ford just required that I was incorporated. This completely lets them off the hook on the contractor vs employee question. Did the same thing with IBM.
Forming an LLC is something that at least here in Indiana can be done in a few days by filling out a form online with the state and getting a tax id with the IRS. This allows you (actually, your LLC) to be directly hired at any company without them taking any risk of you being classified as an employee.
Companies now have to be rude to contractors to avoid a similar lawsuit.
https://www.nytimes.com/2000/12/13/business/technology-temp-...
I get that there are freelancers who like not being employees but that's not the case here. I bet most Temps at Google would love getting employee status and there's no reason most of them shouldn't. It's not like Google couldn't afford the extra payroll.
Make it more expensive to have long-term 'temporary' contractors, and they'll transform them all into employees overnight.
This is a version of a minimum wage, and runs into the same tradeoffs between economic growth and social fairness.
some people don't want to be employees, they want to be contractors.
Highly educated, well-paid people much more likely than people doing physical jobs. If you can negotiate your rates, your projects and can skip some corporate bullshit that fits some people. With a physical job where the wage is hardly enough until next pay day, I doubt that is a preferred option for many.
This is all due to Microsoft who used contractors like regular employees in the 80s and 90s but did not compensate them like regular employees. It's not the workers fault.
If you consider those, the cost of your average employee to the company employing them is roughly 1.6x to 2x their gross income. An overpaid contractor would have to make well over 2x that of a normal employee.
Or, you know, not do the thing they want to do which is to have employees while pretending they aren't employees.
For the first 6 weeks of his contract with the government, he didn't have a computer at his desk. So he sat there reading manuals and stuff.
I don't think the government will ever want to reform the system of "contractors should be employees". The government too benefits from contractors. Bigly.
Why is it that Google uses these staffing firms? I get that they don't want to provide the same benefits to lower skilled workers but then why not just have 2 sets of benefits? One for higher skilled employees and one for lower skilled employees? I suppose the other answer is when it comes to layoffs, it won't be in the news because these types of workers are not officially employed by Google.
Plus I don't think the two tiers of benefits thing would go over as well as you think it might. Either you're in and you have their great, expensive benefits, or you're out.
We desperately need to sever the link between employers and healthcare.
Would it be fair for another company to get a tax deduction for paid meals, 100% employer paid healthcare just to the executives while everyone else has to pay to eat in the cafeteria and pay for their own healthcare?
This whole article is basically complaining that being a contractor sucks because the law forces Google to follow these sorts of practices, but then blames Google for following these sorts of practices.
The "solution" of just converting them all to FTEs and effectively giving them massive boosts in total compensation is impractical. So this awkward, hushed reality is likely to continue as a least-bad solution.
I doubt it has anything to do with image.
Why is it impractical?
I mean, I'm not sure exactly why companies higher CWs as opposed to just lower-paid FTEs. Could be a remedial stopgap to deal with issues in the "normal" hiring pipeline, I'd guess? But the answer to why they don't just throw extra money at people who are already willing to work for you is obvious.
Google then added trainings to avoid future issues. https://www.theguardian.com/technology/2018/dec/11/google-tv...
This is Google cheaping out on medical insurance and PTO.
> It pays relatively well ($15 per hour for most contract workers).
How is that relatively well? Compared to McDonald's employees, probably. Compared to other actual technical jobs, like electrician, I can't imagine. Compared to Google devs, not at all.
Working 40 hours a week with no vacation that's about 31k. Being a contractor means no sick leave, vacation days, pension, insurance, etc.
The US is such an odd country.
When someone has few work skills - as noted in the article - do they more closely resemble a McDonald's employee or an electrician?
Yes, people with low/no skills and little/no experience tend to start in crap roles. Some people will not further their skills, abilities, or knowledge and stay there. Others - like Ms Wait in the article - will use it as a stepping stone to pay the bills as they grow and improve.
Wiping out low level jobs by paying "too much" (yes, entirely subjective) raises the bottom rung of the ladder but also puts it out of reach of others. There's no magic right number but there are dangers in having it too low or too high.
You're using some common rhetoric to reframe this entirely as one of personal volition. Just be like Ms Wait and pull yourself up the ladder. This is a form of the just world delusion, and ignores all the complex ways poverty can be a trap, or how people working at this end of the labor market are basically one roll of the dice away from financial ruin due to illness, car accident, etc.
Apparently, those on-the-job training programs that Amazon offers actually tend to work at times. And of course this is just a single datapoint not indicative of anything, but it kinda shows that those programs might actually work to a degree. I don't doubt that their success rate is likely not even close to 100%, but if it worked even for a chunk of the people attempting it, it is still something.
There's basically no chance of moving into a white collar role internally unless you get a degree but there's definitely room for advancement. Though you could probably advance faster by jumping ship.
Why do we "trust" them again?
FWIW, these people seem to be people who otherwise have no skilled work experience.
To compare I’ve seen electrician apprenticeships paying less than that.
It's not odd once you understand our culture celebrates and almost worships exploitation of some form or the other. It may be exploitation of science and engineering leading to technological growth that we can all share, it may be exploitation of natural resources we've found for a bargain, it may be exploitation of human labor finding how the least amounts can be spent of necessary labor to maximize revenue.
The recent focus to me seems to be on targeting labor and optimizing those costs since the low hanging socially acceptable fruits are starting to give diminishing returns that can't meet some peoples' insatiable appetites for financial growth. This contract position is yet another story of yet another casuality in the cost optimization war by business against human labor expenses.
Ms Wait would have to break her back schlepping spools around a jobsite for a few years before she could get onto the actual electrician career track.
Before they took away the light at the end of the tunnel schlepping batteries around for Google was just as good.
Ms Wait would be paid >=$15 to do this.
Now, 2 years later, they can get a job at any data center. They can work for Google, AWS, Azure, or any data center they wish. On the job training is the sweet bit.
I guess this is why no one want to come to US to work as contractors.
[0] In the US not working is a shitty way to live.
Crucial point is are the bad enough or worse than taking a deal.
I'd say we should shut up and work to create better deal for workers , instead of just telling people that "you do not know you are so exploited". To me it is no better than telling people "Just be lucky" or "Just be rich"
I've seen contractors at IBs and hedge funds decline the offer to be converted to employees because it would mean a big paycut for them.
The 18 month period limit could be seen as a downside, but in this day and age when spending too much time at one company is ironically seen as a bad thing (unless maybe you're at a FAANG tier org), maybe it's not really a big downside either.
Other than that, at least in the legacy financial world, you don't get to put on a fancy but utterly meaningless (and quite frankly, stupid) "Vice President" or "Director" title the employees have.
We were in a little ERJ-135 and never got a clear view of the line we were in because we kept turning corners, but when we were second-in-line for takeoff we broke out of the line and I could see a long line of big and small airplanes waiting behind us close to sunset.
I thought was a miracle, like a scene out of a science fiction movie.
He said "I can't believe I paid $1000 for this!"
I started asking him questions and found out he worked as a contractor running fiber for data centers operators by Google and Facebook and I picked his brain for 45 minutes about how a modern datacenter is wired up.
As a fresh graduate in bigcorp world, especially foreigner who doesn't know on arrival how this works:
You get hired by SSII (Société de services et d'ingénierie en informatique), and do same work as regular staff employees of bigcorp, in the same building etc., except you get sad contractor badge, and no yearly bonuses and perks. The promise is to become staff after 2 years but the bigcorp has arbitrary quotas (per department) on how many people get converted, "hiring freezes" etc.; some people remain contractors for years and years, in the same team (which is pretty much illegal as far as I can tell) as the bigcorp likes to have a bunch of contractors that can be fired quickly in case shit happens (like covid).
It's not _too bad_ because the job at middleman company is typically "CDI" aka "unfirable" due to French labor law, but when all the people around you doing same job as you get a juicy yearly bonus and you don't, it gets you really angry. I was super glad when I found a better company which doesn't do that bullshit and hires everyone as staff.
Why not hire them and pay them better wages
If they were struggling to find or retain talent or if they weren’t getting the caliber of employee required, they would certainly increase wages as they did with engineers.
When I was tangentially involved with a datacenter company several years ago, they had hundreds of qualified applicants for every job opening. It’s a job that a lot of people want but with few openings.
You would have to search a lot to find any big, international conglomerates with shareholders who would willingly pay higher wages for workers without a fight.
The alternative is not that they hire everyone as FTE, its that they hire and fire FTE to meet their labor demand, and then we get lots of doom and gloom and stock price dips about Google firing techs in Iowa or wherever.
There will always be a steady supply of people willing to work in shitty conditions because either the employer is a big name (Google) or they have no other alternative to put food on the table.
The latter aspect is why government regulation and minimum standards are the only way to prevent exploitation.
Yes, because one of those makes them look like a perm for tax reasons, and the other does not.
The 2 year limit suggests "staff aug", as that's a tactic to avoid them being classed as employees. If it were run like a service, there's no need to roll them off every 2 years.
I have personal friends that joined MS during this era. They were told by their managers, off record of course, exactly how to game WA unemployment during their 6 months on, 3 months off, contracting years. They were doing stuff like flying to Mexico for 3 months, then filing false job application progress notifications to unemployment from their laptop on the beach.
The root problem here is that sophisticated businesses can game what should be straight forward worker protections. The MS case is a bandaid. The problem is the erosion of labor rights and negotiating power that's been a decades long trend in the US.
I worked for a couple of staffing companies in the Washington D.C. area in my twenties and reflecting back I view it as a mistake (or at least tough learning experience for a naive college grad). Ultimately, dead-end jobs like these prolonged my journey to landing a job as a developer with a company that actually valued me and treated me with respect.
I ground through contractor jobs because I told myself two lies:
#1. “This is not an ideal situation, but I’m an optimist and will make the best of it.”. Wrong, the truth is that I approached the company and took the job. I may have been a little inexperienced in the ways of the world but I knew full well that these were dead-end jobs. The limitations for potential personal growth, or professional advancement, were clearly documented in the onboarding process. Finding a good job is a real undertaking, requires some luck, and doesn’t have a fixed timeline. Something I also didn’t consider is the impression I would give to future employers later down the road when I listed a staffing company on my resume. It’s funny that a less confident version of myself found so much optimism when considering powering through a bad situation, but I couldn’t spare any of that optimism if I dreamed of reaching for something higher.
#2. “I’m a hard worker and I’ll survive the layoffs through merit”. Wrong, the truth is that the vast majority of the contractors I worked with were eventually laid off (or resigned) and I don’t think poorly of them for it. In fact, the few buddies that I have kept in touch with all eventually moved on to better things. I found the paths they chose after leaving to be inspiring. They took on more challenging jobs, started graduate school, moved to another city, etc. I on the other hand quietly worked off the clock on nights and weekends to mitigate my chances of being laid off. At the time, I told myself that I was acting out of virtue, but really it was fear. My strategy carried me for a long time, but eventually the psychological impact of being treated as a second rate human being caught up to me.
Just sharing my own personal reflections on a very specific set of experiences in case someone finds themselves with similar thoughts.
the reason is because every process is very documented and almost any high schooler can follow the steps and replace and wire up server/firewall (power and backbone is all ya need). Configuration is usually done by full time well paid experts (or even done automatically by software)
"As far as robotics, our hyperscale data centers are more like warehouses and most of the processes require a robot to navigate to a specific location to perform a task. Some of these technologies are in development right now – things like robot navigation, computer vision, motion planning and device tooling for what the robot will employ to do that operation… These have advanced exponentially over the last few years..."
There are job postings on Google's site right now for technical program managers to "Work with Roboticists, Control Engineers and Hardware Lab staff to lead the concept, planning, and development of Data Center Automation System programs with an end-to-end responsibility". In the near future they will still need the skilled trades for power, water, and air, but it's clear that they'll ultimately get rid of them, too.
This is likely done so Google doesn't need to classify TVPs as regular working employees. The six month wait enforces this commoditization upon the people.
These contract workers should be employees.
They were hired with no skills, and were trained from the ground up. They are getting a livable wage but now they want more. If they want more, they need to elevate their worth and become high value employees or find a better job that values them better.
They are contractors. Because of their particular life experiences and life choices, they were unable to come as a more valuable employee. Google doesn’t owe them anything except the job they offered them. If they want better terms they can ask, but Google will refuse. So it’s on them to find a better job.
But please stop complaining about it and think you’re more valuable than you actually are. They can be replaced by someone who has no skills and can be trained from scratch, just like they were. The pay is fair, the conditions are good. That’s better than many jobs out there.
I work for Google, opinions are my own.
How much of your salary are you willing to give up so that these people get their job security?
Yeah I agree that it sounds like a good deal until they fire you after two years and don't allow you to move up like they used to. These terminations are arbitrary, unnecessary, and legitimely harmful to people's lives, so no I don't think it's fair or humane.
I don't see why their initial skill level when they were first hired really matters here, people deserve to have job security based on current performance regardless of their initial conditions.
I don't see why I need to give up any of my salary for these people have job security. I'm sure a small portion of the funds allocated to stock buybacks should do. And, for the record, I already give 1% of my total comp to the union, which was created to protect people in situations like these
If they want a full time job, they need to elevate themselves. Educate yourself, get a degree, find a new job, become management etc. Lots of paths to job security. Just because people want job security doesn’t mean they deserve it.
This suggestion only makes sense until it doesn't. Suppose everyone actually took that advice. Then you'd have an entire population of overqualified people who cannot find jobs that are appropriate to their skill level and who still have to take crappy jobs. Paradoxically, maybe even you are one of them. Then what?
Now consider that this upleveling actually does happen for many people, and yet the issue of risk of financial ruin continues to exist for the bottom rungs in perpetuity.
Also, the point about deserving feels a bit myopic. Does someone deserve to be so poor that their family ends up resorting to tax funded programs like unemployment benefits, or worse, they turn to stealing, landing in jail and imposing a $40k tax burden per head on the rest of the population?
If the money flows from big corps to privileged highly paid workers pockets to the IRS to govt-run programs, why not just route the money directly to the less privileged so govt programs are less needed in the first place? The status quo is really not that different from Omelas[0]
[0] https://en.wikipedia.org/wiki/The_Ones_Who_Walk_Away_from_Om...
In fact, how many weeks / months / years does it take for someone to become a consistent value-add contributor to ANY company?
