Friday, 26 May 2017

Google had an incredible reason for not giving gender pay data to the government: It's too expensive (GOOG, GOOGL)

Larry Page

Google officials were in federal court on Friday to defend its pay practices, pushing back against government allegations that it underpays its women employees.

But if the tech giant hoped to prove its fairness to the world, it didn't exactly win many fans with one of its major lines of reasoning.

According to a report by The Guardian's Sam Levin, Google's budget-minded lawyers argued in court that the government was being unreasonable in demanding that Google collect and turn over internal compensation data.

Why? 

The money.

Complying with a request by the US Department of Labor  would be too expensive and too logistically difficult, Google's lawyers reportedly argued.  The job would apparently require 500 hours of work and cost $100,000.

Note that Google is the world's No.1 internet search engine, with $92 billion in cash and short-term securities on the balance sheet of its parent company, Alphabet. 

And given that Alphabet made $6.8 billion in profit before taxes in just the first quarter of 2017, according to Google Finance, the DoL attorney at Friday's court hearing couldn't resist a snarky response, saying "Google would be able to absorb the cost as easy as a dry kitchen sponge could absorb a single drop of water," Levin reports.

The US Department of Labor (DoL) has previously accused Google of “systemic compensation disparities." The DoL has filed a lawsuit to compel Google to turn over its internal compensation data. Because Google is a federal contractor, it is required by law to submit employment data to the government as part of routine compliance procedures to prove it is not violating equal employment laws, the DoL says.

Occupational segregation

Google has consistently denied the accusations that it underpays women and it even tweeted in April that it "closed the gender pay gap globally" meaning it pays women and men equally for equal work worldwide, it says.

Its HR site also released a guide that instructs others how they can do the same, including the step called "run a pay analysis." Presumably, this means that Google already has loads of salary data in a form that allows it to be analyzed, at least internally.

After the suit went public, job hunting site Glassdoor released its own analysis of Google's pay based on the self-reported salaries submitted by employees. For what it's worth, Glassdoor sided with Google, finding no evidence that Google underpays for equal work.

However, Glassdoor also found that women overall at Google are still paid 16% less than the men. That's because, of the women who work at Google, fewer of them have roles within the highest paying jobs at Google. It's a situation called "occupational segregation," and it's a common reason why women earn less than men across the economy, not just at Google, Glassdoor's Chief Economist, Dr. Andrew Chamberlain told Business Insider.

In any case, folks on Twitter are not buying the argument that Google can't afford to dig up the salary data that the government is requesting.

 

 

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SEE ALSO: The alarming inside story of a failed Google acquisition, and an employee who was hospitalized

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