It’s nothing out of the ordinary when big tech companies like Google make headlines. This time, however, the story is a little different, as the multinational technology giant is under fire for gender pay discrimination.
The case began in 2017 when three now-former employees filed complaints alleging Google underpays female workers, citing a violation of California’s Equal Pay Act. Also included in the complaints were mentions of unequal access to career opportunities, which in turn led to smaller bonuses in comparison to male counterparts.
The three original plaintiffs all held drastically different roles within Google, with one being a software engineer, another in business systems integration, and the last working in branding communications. The span of affected women experiencing unequal compensation suggests that Google’s pay equity problem goes deep.
In June of this year, Google reached a settlement in the class-action suit and subsequently agreed to pay $118 million to over 15,500 female employees. The female workers span over 200 job titles and date as far back as 2013. The company will also have its pay practices reviewed by a third party for the next three years.
Following the settlement, Google told The Verge, “While we strongly believe in the equity of our policies and practices, after nearly five years of litigation, both sides agreed that resolution of the matter, without any admission or findings, was in the best interest of everyone, and we’re very pleased to reach this agreement.”
Google further explained that it’s “absolutely committed to paying, hiring and leveling all employees fairly and equally.”
This isn’t the first time Google has been in the spotlight for pay discrimination. In 2021, the tech company agreed to pay $2.5 million to settle a separate lawsuit that involved underpaying female engineers, as well as overlooking Asian job applicants.
The organization is also currently under investigation by California’s Department of Fair Employment and Housing (DFEH) for reports of alleged harassment and discrimination toward Black female workers.
And yet, despite Google’s ongoing challenges, it is worth noting that the company is making meaningful strides to advance diversity, equity, and inclusion (DEI). Included in its 91-page 2022 Diversity Annual Report, the company outlines several critical achievements, including:
Experiencing the best year yet for hiring women globally, as well as other marginalized people
Expanding programs and processes for ensuring employee inclusion
Taking concrete steps to foster a culture of belonging
The report demonstrates progress on key initiatives relating to diversity and inclusion but makes little mention of pay equity and ensuring fair pay for its over 150,000 employee workforce. So while Google’s efforts to make DEI a priority are commendable, the company falls short in the realm of “equity.”
What does this mean for Google?
As Google’s lawsuits include many female employees, ranging across a wide selection of job titles, paying back pay and legal fees will not solve pre-existing pay problems. Best practices for Google at this time include implementing a comprehensive, ongoing pay equity audit solution. One that also captures the important dimensions of diversity and inclusion, like PayParity.
The analysis would help Google accurately group together workers with related job duties and skills. These necessary pay analysis groups are critical for understanding compensation and key to achieving pay equity. Had a pay equity audit been performed proactively and sooner, it would have likely prevented the $118 million settlement and reputation hit Google is currently experiencing.
A reckoning for the industry
Google isn’t the first nor the last company in the tech space to be the spectacle of pay discrimination and workplace inequality.
LinkedIn, Activision Blizzard, and Riot Games are among some of the big names in the space that have also made headlines recently for violating state and federal pay equity laws. Many of these cases were filed by state and federal agencies, and the consequences included more than just paying monetary damages.
Activision Blizzard, for example, must also “Engage a neutral, third-party equal employment opportunity consultant” who will provide ongoing oversight of the company’s compliance with the settlement. The consultant’s findings will also be reported directly to the Equal Employment Opportunity Commission.
Similarly, Riot Games had to hire an independent DFEH consultant to assist with conducting gender pay equity audits over the next three years, in addition to paying $100 million.
The common denominator between all of these instances is the lack of proactive, accurate, pay equity audits. Had these organizations taken measures to ensure pay equity on their own terms, prior to legal enforcement, they would have likely been able to avoid these escalating situations.
Preparing for the inevitable
Organizations that think this type of discrimination only exists in the tech industry should think again.
Recent data finds that the finance, consultancy, healthcare, transportation, and non-profit industries have the largest gender pay gaps. And while the tech industry may be the first to experience a reckoning, it doesn’t mean other industries won’t soon see similar action. Best practices encourage you to act now.
A pay equity audit is the best first step any organization can take in achieving pay equity and ensuring fair compensation practices. Performing a pay equity audit will also help your organization better prepare for evolving pay data reporting and pay transparency requirements.
Trusaic’s PayParity software conducts a pay equity audit at the intersection of gender, race/ethnicity, age, disability, and more. This comprehensive lens includes the necessary demographic information to fully understand an organization’s compensation practices. To learn more about PayParity and the importance of pay equity audits, schedule a demo.
If your organization is making pay equity a priority this year, and we highly recommend that you do, download our The Pay Equity Communications Planner below to learn best practices for navigating discussions around the social good.