Google finds that almost half of its wage inequality can be attributed to new hires

The search giant was underpaying men in what appeared to be a heavy-handed reaction to the gender pay gap

google building

Google's annual study into the equitable payment of its employees, the one that led to thousands of men being unfairly paid more compared to women, has surprisingly found that the tech giant reacted too harshly this year resulting in men now receiving less pay than women.

Google and a number of other Silicon Valley residents are preparing for increased pressure placed on them amid widespread concerns surrounding sexual harassment and other gender-disparate issues.

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The Alphabet-owned company has been dealing with many lawsuits brought against it from former female employees dating back years, many of which focus on wage discrimination.

After suing the company itself for failing to provide wage data, the US Department of Labor (DoL) launched an investigation into Google following the release of an 8,000 employee-strong snapshot of the wage figures issued to the department in 2017.

The figures requested were for 25,000 employees over a 15 year period to which Google responded by saying that the request was too broad and that it would take over 500 hours to collate all the data.

Now, cumulative offences against women could become a class-action lawsuit with over 8,000 current and former female Google employees backing it.

"Although it is now a legality to produce a gender pay report at the end of each year for large companies, it doesn't seem to be helping the gender pay issue, especially within the tech sector," said a spokesperson from Women in Tech. "You would assume it would be easy for a company as large as Google to comply with equal gender pay but it would seem not."

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Kelly Ellis, a former Google engineer and plaintiff in one of the lawsuits brought against the firm said in a legal filing that Google initially hired her in 2010 on Level 3 employee status - the status given to graduates, despite her having four years industry experience.

According to her contribution to the filing, within weeks a male engineer who graduated four years prior was hired on Level 4 status which entitled him to a better salary and accelerated bonus and raise opportunities. Other men who were less or as qualified as women were also onboarded at Level 4 status.

This year's report is interesting because Google said that it rejigged its algorithm to accurately assess discrepancies in pay. One of the main changes highlighted in a Google blog post was made to the way new hires were analysed.

Google said that 49% of the total amount spend on adjustments ($9.7 million) to employee wages was accounted for by new hires. So, it seems that Google is hearing cases like Laura Ellis' and taking action to prevent it from happening again.

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"Compensation should be based on what you do, not who you are," said Lauren Barbato, lead analyst for pay equity at Google. "Every year, each employee's compensation is modelled algorithmically, based on work-related inputs like the market rate for their job, their location, level and performance rating."

"If managers then want to apply discretion to adjust an employee's modelled compensation, they must provide a clear rationale," she added.

Of the $9.7 million paid in compensation, men received a higher percentage of the money. Exact figures are unclear but men, who account for roughly 69% of the workforce appear to have been the ones at entry level to lose out to women in 2018.

Google performs the analysis every year and has done since 2012.

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