Google to pay $118 million after being accused of underpaying 15,500 women

Google has agreed to pay $118 million to settle a class action lawsuit that alleges the company underpaid female employees. The agreement will release Google from claims that it “paid women in Covered Positions less than it paid men for substantially similar work, that Google assigned women to lower levels than it assigned men, and that Google failed to pay all wages due to employees upon their separation of employment,” the settlement says.

The settlement covers about 15,500 women who have worked for Google in California since 2013, the plaintiffs’ law firm said in an announcement on Saturday. Four named plaintiffs will get separate payouts: $75,000 for lead plaintiff Kelly Ellis and $50,000 each for the other three, in addition to their regular share from the net settlement fund. The settlement class covers a wide range of workers with 236 job titles.

The net settlement fund will have about $86 million after attorneys’ fees and other deductions, providing an average of about $5,500 for each class member. The lawsuit alleged that “Google paid women, on average, approximately $16,794 less per year than similarly situated men, in base pay, bonus, and stock.”

Google violated the California Equal Pay Act and other state laws, plaintiffs alleged in the gender-discrimination lawsuit. The settlement is pending a judge’s approval in San Francisco County Superior Court.

“In addition to monetary relief, the settlement provides that an independent third-party expert will analyze Google’s leveling-at-hire practices and that an independent labor economist will review Google’s pay equity studies,” the plaintiffs’ law firm said. “The post-settlement work will be supervised by an external settlement monitor over the next three years. The lawsuit challenged Google’s pay and leveling processes, and plaintiffs believe these programs will help ensure that women are not paid less than their male counterparts who perform substantially similar work, and that Google’s challenged leveling practices are equitable.”

“More equity for women”

Ellis was a software engineer at Google’s Mountain View office for about four years and left with the title of senior manager. Plaintiff Holly Pease worked for Google for about 10.5 years in various technical leadership roles; plaintiff Kelli Wisuri worked for Google for about 2.5 years in enterprise operations and sales; and plaintiff Heidi Lamar worked as a preschool teacher and infant/toddler teacher at Google’s Children Center in Palo Alto for about four years.

“As a woman who’s spent her entire career in the tech industry, I’m optimistic that the actions Google has agreed to take as part of this settlement will ensure more equity for women,” Pease said. Google reportedly has 150,000 employees worldwide, including about 45,000 in the Bay Area.

The additional payments to named plaintiffs are “intended to compensate the Class Representatives for the risks they took bringing this case, including but not limited to enduring potential for career or reputational harm, and their active and time-intensive participation in the prosecution and settlement of this case,” the settlement said.

In a statement provided to Ars, Google pointed out that it admitted no wrongdoing in the settlement and that it conducts regular pay equity reviews that result in raises:

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. We are absolutely committed to paying, hiring and leveling all employees fairly and equally and for the past nine years we have run a rigorous pay equity analysis to make sure salaries, bonuses and equity awards are fair.

If we find any differences in proposed pay, including between men and women, we make upward adjustments to remove them before new compensation goes into effect, and we’ll continue to do that. In 2020 alone, we made upward adjustments for 2,352 employees, across nearly every demographic category, totaling $4.4 million. We also undertake rigorous analyses to ensure fairness in role leveling and performance ratings. We’re very happy to have an advisor look at these processes and make recommendations for future improvement.

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