History of Contracting

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TVCs have been around since the beginning of the tech industry

The 1992 Landmark Temp-Worker Microsoft Case

  • In 1992, contract & temporary workers at Microsoft filed a lawsuit against being misclassified as independent contractors despite being “Perma-temps”

  • Working full-time or more hours.

  • Working alongside full-time employees.

  • Despite being labeled as temporary or seasonal workers, many Microsoft contractors were working for the company for many years.

  • They were essentially working full-time without benefits or the pay they were owed from Microsoft.

  • This meant that the workers were held in perpetual contract roles, doing full-time work, but not receiving benefits like full-time workers

  • Courts ruled in favor of the contract & temp workers finally in 2000

  • Outcome: Contract workers still treated as expendable workers.

  • Not all contract workers received a payout

  • Contract term caps prevents workers from becoming ‘perma-temps’, but means contract workers are forced to find new work every 2 years

  • Rules on separation of contract workers and FTEs

  • Contract workers cannot receive direct feedback from their host employer

  • Contractors don’t qualify for the same benefits as FTEs

  • Contract workers still treated as ‘2nd class citizens’

Rise of Contract Workers in Large Tech Companies and the Gig Economy:

  • Shift to more contractors than FTEs at companies like Google

  • Gig workers classified as Independent Contractors or Freelancers rather than FTEs

  • Uber, Lyft, Postmates, Grubhub; jobs with little in ways of protections or compensation

  • Rationale behind the rise:

  • For companies, it means a more efficient hiring/firing process for unneeded workers, and overall lower labor costs for companies.

  • No need to provide benefits, pensions, and comparable wages to contingent workers.

  • Advertised to workers as giving them more control and flexibility over the terms of their employment (e.g., flexible hours, better work-life balance, variable terms)

  • Workers are kept in low-wage, short-term, or at-will employment, while companies profit and create the conditions that drive more people into contract work.

  • A report in 2010 predicted the rise of contract work and that by 2020, more than 40% of the workforce will be made up of contingent workers, and that traditional full-time jobs will be increasingly hard to find. [link] We are seeing this prediction come to pass.

Bootcamps

  • We can’t talk about contracting without talking about the rise and role of tech and coding bootcamps. Bootcamps are short-term computer technology skill training programs.

  • They are advertised to people who want higher wages and as a way of iIncreasing diversity in tech’.

  • Bringing in people who don’t have access to college degrees in tech

  • Coded as: PoC, women, non-white males, non-traditional career paths

  • No need for an ‘expensive college degree’ to get a tech job

  • But bootcamps are a way for companies to train large numbers of lower-skilled tech labor. (See Deskilling). Many bootcamp graduates end up working in contract jobs rather than full-time jobs that go to college graduates. 

  • Acquisition of Bootcamps by Contract Agencies:

  • In 2018, Adecco Group, one of the largest contracting agencies acquired General Assembly. [Link]. WeWork now owns The Flatiron School.

  • It establishes a Bootcamp-to-Contract pipeline

  • It’s part of a move to keep constrained people within a larger system of contract labor. Pay tuition for a bootcamp. Get offered jobs from agencies that own the bootcamps. The agency then takes a cut of your wage. In the end, all money goes to the same corporation.

Temps, Vendors, Contractors Striking Back

  • Microsoft bug testers unionize to get paid leave (April 2015)

  • Uber drivers attempt to deliver a petition to Uber but a driver is tackled by a security guard (October 2018)

  • Google Walkout Against Sexual Harassment involved contractors speaking out against differences in handing harassment cases between TVCs and FTEs (November 2018)

  • Google TVC Letter demanding equal treatment, protections, and pay (December 2018)

  • Facebook contractors demanding better wages and sick leave (December 2018)

  • Contract workers at Google, Pittsburgh unionizing (September 2019)

  • [MORE CURRENT EVENTS HERE]

  • Instacart drivers strike/walkout amid the Coronavirus crisis (March 2020)

2020 and On:

  • Contract work is not going away anytime soon

  • Companies cutting FTEs but keeping TVCs on, then expanding their TVC slots.

  • The global coronavirus crisis and financial crisis means increasing number of jobs are becoming contingent, and FTE positions are drying up.

  • Mass layoffs of workers in the service industry

  • Mass layoffs of FTEs at tech companies

  • Powerful companies like Walmart and Amazon are expanding their contract labor force by the hundreds of thousands.

  • As the coronavirus and capitalism destabilizes the US economy, we can expect full-time positions in the tech industry to shrink, and see a huge spike of people entering contingent work.