Recent Pay Bias Settlements Highlight Risks of Noncompliance

Emily Scace

Google will pay $3.8 million to more than 5,500 current employees and job applicants to settle allegations of pay and hiring discrimination.

According to the US Department of Labor's Office of Federal Contract Compliance Programs (OFCCP), a routine compliance evaluation uncovered pay and hiring rate disparities in software engineering roles at Google that disadvantaged female employees, as well as female and Asian applicants.

Under the terms of the settlement, Google will:

Pay more than $1.3 million in back pay and interest to 2,565 female employees in software engineering positions subject to pay discrimination;

Pay more than $1.2 million in back pay and interest to 1,757 female and 1,219 Asian applicants for software engineering positions who were not hired;

Allocate a cash reserve of at least $1.25 million in pay-equity adjustments for the next five years for U.S. employees in engineering positions at four Google establishments; and

Review its policies and practices related to hiring and compensation, conduct analyses and take corrective action to ensure non-discrimination.

Calling pay discrimination "a systemic problem," OFCCP Director Jenny R. Yang urged employers to "conduct regular pay equity audits to ensure that their compensation systems promote equal opportunity."

The Google settlement is just the most prominent recent example of the financial risks of pay discrimination.

In another recent case, Aimbridge Hospitality and AH 2007 Management, the former operators of a Courtyard by Marriott hotel, will pay $400,000 in back pay and other damages under a settlement with the Equal Employment Opportunity Commission (EEOC). The company also agreed to conduct periodic training on pay discrimination, maintain anti-discrimination policies and records, post anti-discrimination notices, provide periodic reports to the EEOC, and retain an economist to conduct periodic pay equity studies.

The settlement resolves allegations that Aimbridge paid a male guest service representative a substantially higher wage than it paid a female front desk supervisor and female guest service representatives. Although the company eventually increased the female supervisor's pay, according to the EEOC, it reduced the male representatives' pay rather than increasing the pay of the female representatives. Under the Equal Pay Act, employers may not attempt to equalize the pay between male and female employees by reducing the wages of either sex.

President Biden has identified gender-based pay disparities as a priority, expressing support for the Paycheck Fairness Act. The Act, an earlier version of which passed the House in 2019 but stalled in the Senate, would strengthen the Equal Pay Act by prohibiting employers from using an employee's salary history in determining wages or making hiring decisions, requiring the EEOC to collect compensation data from employers, and increasing civil penalties, among other provisions.