Artificial IntelligenceCryptocurrencyMetaverseCybersecurityTech Forward

Google is paying $118 million to settle a lawsuit that claims it underpays women, agreeing to open its hiring policies to expert review

June 13, 2022, 7:17 AM UTC

Google will pay $118 million and open some of its practices to independent review to settle a class-action lawsuit that accused the company of consistently paying women less than their male colleagues.

The lawsuit covers 15,550 female employees working in California since 2013, notes a statement from the law firm representing the plaintiffs. A judge will review the settlement in a preliminary hearing on June 21.

“While we strongly believe in the equity of our policies and practices, after nearly five years of litigation, both sides agreed that the resolution of the matter, without any admission or findings, was in the best interest of everyone,” a Google spokesperson said in a statement provided to Fortune, outlining that Google is not admitting fault as part of the settlement.

As part of the agreement, however, Google is allowing third parties to examine how it sorts new recruits into levels upon hiring—a practice that was at the heart of the class-action suit against the company.

“We’re very happy to have an adviser look at these processes and make recommendations for future improvement,” the spokesperson said.

Google’s sorting levels

Google places new hires on different levels depending on experience—which can be difficult to determine for employees that transfer over from other companies. Plaintiffs in the lawsuit argued that “Google assigns women to lower job levels than men with comparable experience and education based on lower pay at prior employment.”

One plaintiff alleged that she was placed on Google’s Level 3 tier, meant for fresh college graduates, despite having four years of experience. Soon after, a man with a similar level of experience was placed on Google’s Level 4 tier, meant for those with several years of industry experience or Ph.D. graduates, she said. Being placed at a higher level means greater pay and bonuses.

Plaintiffs also argued that they were given less prestigious assignments despite their experience, giving them fewer opportunities to climb Google’s corporate ladder.

As part of the settlement, a labor economist will also review Google’s pay equity studies, which the company says it uses to monitor and correct pay disparities across the company. In 2020, Google made “upward adjustments” for almost 3,400 employees, totaling $4.4 million, according to Google.

“As a woman who’s spent her entire career in the tech industry, I’m optimistic that the actions Google has agreed to take as part of this settlement will ensure more equity for women,” Holly Pease, one of the plaintiffs in the lawsuit, said in a statement.

Class action

The lawsuit was launched in 2017 by three female Google employees, who accused Google of breaking Californian law on gender discrimination, such as the state’s Equal Pay Act. (A fourth plaintiff joined later). The plaintiffs argued that women employed at Google earn approximately $16,794 less per year than male counterparts, notes Bloomberg

A California judge granted the lawsuit class-action status last year, allowing the plaintiffs to represent thousands of Google employees. Some gender discrimination lawsuits against other Big Tech firms, like those against software maker Oracle, have struggled to achieve class-action status.

This isn’t Google’s only settlement this month. On June 6, the company agreed to pay $100 million to Illinois residents to settle a class-action lawsuit from users of the Google Photos app. The company was accused of not informing users it was collecting biometric data, like facial geometry, in violation of state law.

Nor is this Google’s only payout regarding discrimination. In February 2021, Google paid $2.5 million to settle a lawsuit from the U.S. Department of Labor alleging the company disadvantaged female and Asian applicants. The company is also reportedly under investigation from California’s Department of Fair Employment and Housing regarding harassment against Black female employees.

Some Google employees have expressed frustration at the company’s difficulty in dealing with questions of discrimination and harassment. Last week, Tanuja Gupta, a senior manager for Google News and an organizer of the 2018 Google walkout, resigned after the company canceled a talk from a prominent campaigner against India’s caste bias, after employees complained the speaker was “Hindu-phobic.”

Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.