There is no doubt that pay equity and the wage gap is a hot button issue not just for specific companies but across all industries. Google commented further in their blog today about the importance to them that men and women who join Google in the same role are compensated on a level playing field, both when they start and during the duration of their careers with the company.
In 2016, the company wanted to highlight the conversation around the gender pay gap – along with how companies could fight it – by sharing their top-level analysis publicly. Annually, Google conducts what they deem as rigorous analyses so that their pay practices can remain aligned with their commitment to pay equity.
However, the federal government had another observation.
A Visit from the OFCCP
The company was taken aback when a representative from the Office of Federal Contract Compliance Programs at the U.S. Department of Labor accused Google of not compensating women fairly. The company claimed that the government’s assertion failed to have any supporting data or methodology. The representative claimed to have reached this conclusion even with the OFCCP seeking thousands of employee records, along with contact details of their employees as well as hundreds of thousands of documents they had already produced as a response to 18 different document requests.
Google states that they use the same confidence interval that is also used in medical testing (>95%). They have also made the methodology available to other businesses to use as well, to try and test their own compensation methodology.
How The Pay Equity System at Google Works
Each year, Google suggests an amount for every employee’s new compensation which can consist of a base salary, bonus and equity, that is based on role, job level, job location as well as current and recent performance ratings. This amount is deemed “blind” to gender; those analysts who calculated the amount do not have access to any employees’ gender data. Employee managers have limited discretion for adjusting the suggested amount, providing they provide the appropriate rationale for the adjustment.
Google’s pay equity model then looks to employees in the same job categories, analyzing their compensation to confirm the adjusted amount shows no statistically significant differences between the compensation of male and female employees.
Ultimately, the search engine giant remains hopeful in resolving the issue with the government, and stands firm in its belief that there are no pay equity issues at the company.