Google has agreed to pay $2.59 million to more than 5,500 current employees and former job applicants as part of a settlement with the U.S. Department of Labor over allegations of systemic discrimination as it relates to compensation and hiring. Google has also agreed to reserve $250,000 a year for the next five years to address any potential pay equity adjustments that may come up. That brings Google's total financial commitment to $3.8 million -- a drop in the bucket for the company, whose parent company Alphabet has a market cap of $1.28 trillion.
The settlement comes after the DOL's Office of Federal Contract Compliance Programs found pay disparities affecting female software engineers at Google's offices in Mountain View, as well as in offices in Seattle and Kirkland, Washington. The OFCCP also found differences in hiring rates that "disadvantaged female and Asian applicants" for engineers roles at Google's locations in San Francisco, Sunnyvale and Kirkland. The OFCCP's evaluation covered September 1, 2014 through August 31, 2017.
As part of the settlement, Google has agreed to pay $1.35 million in back pay and interest to 2,565 female software engineers at the company ($527.50 per employee), and $1.25 million in back pay and interest to 1,757 women and 1,219 Asian applicants for software engineering roles for which they were not hired ($414 per person).
Lastly, Google will reserve $1.25 million of the money to go toward pay-equity adjustments for the next five years for U.S. engineers at Google's Mountain View, Kirkland, Seattle and New York offices.
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"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," a Google spokesperson said in a statement to TechCrunch. "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."
"The U.S. Department of Labor acknowledges Google’s willingness to engage in settlement discussions and reach an early resolution," Office of Federal Contract Compliance Programs Regional Director Jane Suhr said in a press release. "The technology industry continues to be one of the region’s largest and fastest growing employers. Regardless of how complex or the size of the workforce, we remain committed to enforcing equal opportunity laws to ensure non-discrimination and equity in the workforce."