The U.S. Department of Labor announced last week that Google will pay up to $3.85 million to settle systemic pay and hiring discrimination allegations at its California and Washington state locations.
The settlement resolves allegations of discrimination in compensation and hiring for some 5,500 current employees and job applicants.
Google has service contracts with the federal government and, as such, agrees to regular compliance audits by the DOL’s Office of Federal Contract Compliance Programs.
During a regular audit, the compliance programs office uncovered what it believed to be pay disparities impacting female employees in certain software engineering positions.
The office also identified hiring disparities for female and Asian applicants who it determined were disadvantaged in the hiring process for software engineering positions at certain locations.
Google agreed to resolve the allegations, paying about $1.4 million in back pay with interest to about 2,500 female employees in engineering positions who were impacted by the pay discrimination. It also agreed to pay $1.2 million in back pay and interest to about 1,800 female and 1,200 Asian applicants for software engineering positions denied employment.
The tech giant also agreed to allocate a cash reserve $1.25 million for pay-equity adjustments over the next five years for certain employees in engineering positions.
“Google agreed to enhance future compliance proactively and review its current policies, procedures and practices related to hiring, compensation; conduct analyses; and take corrective action to ensure non-discrimination,” the Labor Department said.
By agreeing to an “early resolution,” Google may have avoided additional audits of its other locations for a period of five years.
The Labor Department identified pay discrimination as a “systemic problem,” and suggested that employers “conduct regular pay equity audits to ensure that their compensation systems promote equal opportunity.”
While only certain federal contractors are subjected to the reach of the compliance office, all employers should consider evaluating their pay and hiring practices to uncover any bias or disparate impact in these practices.
Virtually all employers are subject to the Equal Pay Act, which requires that men and women in the same workplace be given equal pay for equal work.
Employers with 15 or more employees are governed by Title VII of the Civil Rights Act, which requires nondiscrimination in hiring and other employment practices based on race, sex, national origin, color and religion.
Employers should regularly review each step of the hiring process to determine whether there is a disparate impact on any protected group and, if so, where in the process it is occurring. Organizations frequently require testing or educational requirements that need not be job requirements and sometimes cause disparate impact, so these requirements should be carefully examined.
In reviewing compensation, employers should review all employees performing similar work, and analyze the total compensation including bonuses and other awards.
The review should include an analysis of compensation policies to make sure the company has articulated the foundation for pay practices. There should be consistency in the value placed on education, work experience, certifications, performance, time in the job and other factors.
Organizations should focus on all aspects of diversity in an organization, including often overlooked disability and LGBTQ+ members of the workforce.
In June, Sundar Pichai, CEO of Google’s parent company, Alphabet Inc., announced the company’s commitments to racial equity, including $175 million to help create economic opportunities for the Black community. Last fall, Google announced a $310 million fund for diversity, equity and inclusion initiatives. This followed a 2018 dispute with Alphabet’s board regarding how sexual harassment claims were investigated.
According to its 2020 diversity annual report, Google’s hiring rate of women was down slightly by 0.7% from the previous year. Women represented just 32% of the workforce in 2020, a slight 0.4% increase from 2019.