Tag: prior salary

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Google Pays $32M in Pay Discrimination Settlements

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Pay Discrimination at Google: A Case Study in Corporate Accountability

Google, one of the world’s most valuable companies, has faced mounting scrutiny over allegations of systematic pay discrimination against women and underrepresented minorities. Recent settlements totaling over $32 million expose deep-rooted inequality within the tech giant’s compensation practices, revealing patterns that extend far beyond isolated incidents.

The controversy centers on leaked internal salary data and federal investigations that uncovered significant disparities in how Google compensates employees based on gender and race. These cases highlight critical issues that HR professionals and employees across the tech industry must understand as they navigate an increasingly complex landscape of workplace equality.

Background: When Transparency Reveals Troubling Patterns

Google has long promoted itself as a leader in workplace transparency, publishing salary ranges for job postings and conducting internal pay equity reviews. However, leaked internal compensation data tells a different story. In 2023, an internal spreadsheet containing salary information from over 12,000 U.S. employees revealed substantial pay gaps that contradicted the company’s public commitments to equal pay.

The leaked data showed software engineers earning base salaries ranging from $100,000 to $718,000, with the highest-paid employees receiving additional compensation through unfair bonuses and unequal equity grants worth up to $1.5 million annually. While Google spokesperson Tamani Jayasinghe stated the company provides “top-of-market compensation,” the data suggested significant variations that raised questions about how compensation decisions were made.

Federal Investigation Uncovers Systematic Discrimination

In 2021, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) concluded a routine compliance evaluation that revealed disturbing patterns of pay discrimination at Google’s California and Washington facilities. The investigation identified specific instances where female software engineers were systematically underpaid compared to their male counterparts in identical positions.

The federal probe also uncovered hiring rate differences that disadvantaged female and Asian applicants for software engineering positions at Google’s San Francisco, Sunnyvale, and Kirkland locations. These findings suggested that discrimination extended beyond compensation into fundamental hiring practices, creating barriers for underrepresented groups seeking employment at the company.

“Pay discrimination remains a systemic problem,” stated OFCCP Director Jenny R. Yang. “Employers must conduct regular pay equity audits to ensure that their compensation systems promote equal opportunity.”

Major Settlements: $32 Million in Penalties

Google’s legal troubles resulted in two significant settlements that underscore the severity of the pay discrimination allegations.

Federal Settlement: $3.8 Million

The Department of Labor settlement required Google to pay $3,835,052 to resolve federal allegations, specifically:

  • $1,353,052 in back pay and interest to 2,565 female employees in engineering positions who experienced pay discrimination
  • $1,232,000 in back pay and interest to 1,757 female and 1,219 Asian applicants for software engineering positions who were not hired due to discriminatory practices
  • A $1,250,000 cash reserve for pay-equity adjustments over five years for engineering employees at major facilities

Class Action Settlement: $28 Million

A separate class action lawsuit filed by former Google employee Ana Cantu resulted in a $28 million settlement in 2024. Cantu, who identifies as Mexican and racially Indigenous, alleged that Google paid diverse new hires less and placed them in lower-level positions compared to their White and Asian colleagues.

The lawsuit claimed Google’s practice of basing starting salaries on prior compensation perpetuated historical pay disparities based on race and ethnicity. This approach effectively transferred inequality from previous employers into Google’s compensation structure, creating a cycle of discrimination that violated the California Equal Pay Act.

Analysis: Implications for the Tech Industry

These settlements reveal critical weaknesses in how major tech companies approach pay equity, despite public commitments to diversity and inclusion. The cases demonstrate that even companies with sophisticated HR systems and substantial resources can perpetuate systematic discrimination through seemingly neutral policies.

The reliance on salary history for compensation decisions proved particularly problematic, as it embedded existing market inequities into Google’s pay structure. This practice has prompted many states, including California, to ban salary history inquiries during the hiring process.

The leaked pay data also highlights the power of transparency in exposing workplace inequality. Employee-led efforts to share compensation information played a crucial role in both legal cases, suggesting that pay secrecy policies may inadvertently protect discriminatory practices.

For HR professionals, these cases underscore the importance of conducting regular pay equity audits and engaging third-party experts to review compensation practices. The settlements also demonstrate that federal agencies continue to actively investigate and prosecute workplace discrimination, making compliance a business imperative rather than merely an ethical consideration.

Taking Action Against Pay Discrimination

Google’s $32 million in settlements serves as a stark reminder that pay discrimination remains pervasive in American workplaces, even within companies that publicly champion equality. The combination of federal investigations and employee-led transparency efforts created accountability that resulted in significant financial consequences and policy changes.

For employees who suspect they are experiencing pay discrimination based on gender, race, or other protected characteristics, these cases demonstrate that legal remedies are available. The complexity of proving systematic discrimination requires experienced legal representation capable of analyzing compensation data and navigating federal employment law.

If you believe you are facing pay discrimination or other workplace inequality, consulting with a qualified pay discrimination attorney can help you understand your rights and options for seeking justice. The Google settlements prove that even the most powerful employers can be held accountable when they fail to provide equal pay for equal work.

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Important New California Employment Laws For 2016

California passed a bevy of new employment laws in 2016. Here is a summary of the most important ones.

Minimum Wage Increases (SB 3)

Beginning on January 1, 2017, employers with 26 or more employees will have to pay a minimum wage of $10.50 per hour. This minimum wage rate will gradually increase to $15.00 per hour by 2022 as shown below:

January 1, 2017 – 10.50
January 1, 2018 – 11.00
January 1, 2019 – 12.00
January 1, 2020 – 13.00
January 1, 2021 – 14.00
January 1, 2022 – 15.00
January 1, 2023 – 15.00

Smaller employers (with 25 or fewer employees) will be required to pay the higher minimum wage rates starting in 2018 as shown below:

January 1, 2017 – 10.00
January 1, 2018 – 10.50
January 1, 2019 – 11.00
January 1, 2020 – 12.00
January 1, 2021 – 13.00
January 1, 2022 – 14.00
January 1, 2023 – 15.00

Equal Pay Act Expanded To Cover Race And Ethnicity (SB 1063)

In 2015, the California Legislature enacted and Governor Brown signed Labor Code Section 1197.5 into law which made it the Nation’s most protective equal pay act. Section 1197.5 didn’t just require employers to pay employees of opposite genders equal pay for equal work but, instead, required equal pay for substantially similar work. This year, the Legislature enacted and Governor Brown signed into law amendments to the Equal Pay Act which prohibit wage differences based upon race or ethnicity for substantially similar work when viewed as a composite of skill, effort, responsibility, and performed under similar working conditions.  Exceptions include where the payment is made based on any bona fide factor other than sex/race/ethnicity, such education, training, or experience.

Employers Prohibited From Using An Employee’s Prior Salary To Justify Wage Differences (AB 1676)

Employers often try to justify differences in pay between men and women by explaining that they based the differences on the employees’ prior salaries. This new law prohibits employers from using an employee’s prior salary, by itself, to justify any compensation disparity.

Employer’s Required To Provide Employees With Notice Regarding Domestic Violence, Sexual Assault And Stalking Protections (AB 2337)

California law prohibits employers from terminating or in any other manner discriminating or retaliating against an employee who takes time off from work to address domestic violence, sexual assault, or stalking. This new law mandates that employers must inform each employee of his or her rights established under these laws by providing certain information in writing to new employees upon hire and to other employees upon request.

Settlement Agreements Can No Longer Prevent The Disclosure Of Information Regarding Certain Sex Offenses (AB 1682)

Existing law allows parties to enter into a settlement agreement requiring the nondisclosure of information regarding sex offenses. This new law now prohibits parties from entering into settlement agreements (on or after January 1, 2017) that would prevent the disclosure of factual information that establishes a cause of action for civil damages for a felony sex offense, an act of childhood sexual abuse, an act of sexual exploitation of a minor, or an act of sexual assault against an elder or dependent adult.

Employees Of Temporary Services Employers Must Be Paid Weekly (AB 1311)

Current law (Labor Code Section 201.3) requires that temporary services employers must pay their employees weekly and that a violation of these provisions is punishable as a misdemeanor. This new law extends this weekly pay requirement to security guards employed by those who are both private patrol operators and temporary services employers.

Employers Can Not Ask An Applicant To Disclose Certain Criminal History Information (AB 1843)

Section 432.7 of the Labor Code prohibits employers (both public and private) from asking applicants for employment to disclose, or from utilizing as a factor in determining any condition of employment, information regarding an arrest or detention that did not result in a conviction.  Certain information concerning a referral or participation in any pretrial or post-trial diversion program is also prohibited from disclosure.

This new law now prohibits an employer from asking applicants for employment to disclose, or from utilizing as a factor in determining any condition of employment, information concerning or related to an arrest, detention, processing, diversion, supervision, adjudication, or court disposition that occurred in juvenile court. In addition, this law provides that “conviction,” as used in the statute, excludes an adjudication by a juvenile court or any other court order or action taken involving a person who is under the jurisdiction of the juvenile court.

Employers Prohibited From Engaging In Certain Unfair Immigration-Related Practices (SB 1001)

Employers are prohibited from: (a) request more or different documents than are required under federal law; (b) refuse to honor documents or work authorization based upon the status or term of status that accompanies the authorization to work; or (c) reinvestigate or reverify an incumbent employee’s authorization to work.  Applicants are authorized to file a complaint with the Division of Labor Standards Enforcement.

California Employees Guaranteed Access To California Law And Forum (SB 1241)

This bill applies to contracts entered into, modified, or extended on or after January 1, 2017 and prohibits an employer from requiring an employee who primarily resides and works in California, as a condition of employment, to agree to adjudicate outside of California a claim (in either litigation or arbitration) arising in California or deprive the employee of the substantive protection of California law with respect to a controversy arising in California. The bill specifies that injunctive relief is available as a remedy and authorizes a court to award reasonable attorney’s fees. The bill exempts a contract with an employee who was represented by legal counsel.