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Google Settles Hiring, Pay Bias Claims for 5,500 Workers (3)

Feb. 1, 2021, 6:00 PM; Updated: Feb. 1, 2021, 11:08 PM

Alphabet Inc.'s Google LLC will pay almost $2.6 million to settle U.S. Labor Department allegations that the technology company potentially underpaid thousands of female workers in software engineering positions, and discriminated against women and Asian job applicants.

Google also will set aside an additional $1.25 million over five year for employee pay adjustments, if deemed necessary, and review its hiring and pay practices, under the settlement with the Labor Department’s Office of Federal Contract Compliance Programs.

The agency, which randomly audits federal contractors for compliance with affirmative action obligations and anti-bias laws, uncovered “preliminary indicators” of bias at five Google locations, spread across Washington and California.

As part of the “early resolution” conciliation agreement, the Labor Department won’t audit 39 Google locations for five years. The settlement is dated Jan. 15, before President Joe Biden was sworn into office, but the Labor Department made it public Monday.

Google joins Microsoft Corp., Deloitte, JPMorgan Chase & Co., Hewlett Packard Inc., and other federal contractors that have previously settled Labor Department discrimination claims.

The Labor Department is expected to ramp up anti-discrimination enforcement efforts under the leadership of Biden-appointed agency head Jenny Yang. Biden has made eliminating race and gender pay gaps a priority, and he could turn to the OFCCP to do so.

“We believe everyone should be paid based upon the work they do, not who they are, and invest heavily to make our hiring and compensation processes fair and unbiased,” Google spokesperson Jennifer Rodstrom said in an email. “For the past eight years, we have run annual internal pay equity analysis to identify and address any discrepancies. We’re pleased to have resolved this matter related to allegations from the 2014-2017 audits and remain committed to diversity and equity and to supporting our people in a way that allows them to do their best work.”

Thousands Eligible for Settlement

About 2,565 women who worked at the company’s locations in Kirkland, Wash., and Seattle in 2017, and in Mountain View, Calif., in 2014 and 2015, are eligible for the pay bias settlement, which includes about $1.4 million in back wages and interest.

“Pay discrimination remains a systemic problem. Employers must conduct regular pay equity audits to ensure that their compensation systems promote equal opportunity,” the OFCCP’s Yang said by email.

Meanwhile, roughly 2,976 Asian and female applicants who sought jobs at Google offices in San Francisco, Sunnyvale, Calif., and Kirkland between 2016 and 2017 are also eligible for a payout of about $1.2 million in back wages and interest. Google has also offered jobs to 51 female and 17 Asian applicants, according to a Labor Department release.

Google and the OFCCP have wrestled over pay data access issues in the past. The agency alleged it had uncovered “systemic compensation disparities” within the tech giant’s Mountain View headquarters, and made what the company called an “extreme” request for more pay data. It sued for access to that information in January 2017.

An administrative law judge later that year ordered Google to turn over some, but not all, of the requested additional data to the DOL, and that decision was upheld by Chief Administrative Appeals Judge William T. Barto in August 2019.

(Updated to add DOL comment and additional settlement details.)

To contact the reporter on this story: Paige Smith in Washington at psmith@bloomberglaw.com

To contact the editors responsible for this story: Jay-Anne B. Casuga at jcasuga@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com

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