Uber is one of several tech titans to find itself on the wrong side of pay equity disputes with employees. Uber earlier this year agreed to a $10 million settlement to address a pay discrimination and sexual harassment lawsuit dating back to October 2017 involving two former and one current Latina engineer Uber employees. The three Latina engineers alleged that Uber paid their white and Asian male colleagues more than female and minority employees.
The lawsuit against Uber was filed in U.S. District Court, Northern District of California on behalf of 420 employees – 285 women and 135 ethnic minorities – who claimed that Uber was in violation of the Equal Pay Act. The plaintiffs also filed in California Superior Court under the Private Attorneys General Act in California. Under the state law, the state receives 75% of any civil penalties and relief, and aggrieved employees receive 25%.
The lawsuit was back in the news recently when the parties announced how the $10 million settlement would be distributed. According to CNN:
“Uber has agreed to pay 56 current and former employees about $33,900 each, or $1.9 million, to settle their claims of gender discrimination, harassment and hostile work environment. In addition to the $1.9 million, another $5.1 million will be divided among more than 480 workers, including the 56 who are receiving the other payouts.”
This isn’t the first time Uber has been in the news on pay equity issues. In July 2017, Uber implemented salary adjustments across the company to address pay inequity for company employees. Earlier this year, The National Bureau of Economic Research (NBER) released a research paper that analyzed the wages for over one million Uber drivers. The report found that men who drive for Uber earn roughly 7% more than their female counterparts. Data suggested that the pay disparities were because of the drivers’ own decisions.
Uber’s situation is similar to that of other tech companies that have dealt with similar lawsuits addressing pay equity issues and the negative publicity that comes with this type of litigation. On the other side, companies like Amazon and Salesforce have been proactive in addressing pay equity issues, sidestepping potentially thorny PR issues and costly litigations.
As organizations continue to face legal implications for pay equity issues, they should consider a review of their salary practices and policies. Contacting experienced outside specialists to evaluate their pay structure, hierarchy, hiring process, and related policies is a good first step to avoiding potentially expensive litigation and terrible PR that can impact the your bottom line and corporate reputation.