Google to pay $118 million settlement in class-action lawsuit accusing them of underpaying women

Google has agreed to settle a class-action lawsuit with its current and past female employees. The tech company says it’ll pay $118 million to more 15,000 women for paying them less than their male counterparts for similar work.

The lawsuit came to light in 2017 when three women filed a complaint accusing the company of underpaying female employees in violation of California’s Equal Pay Act, citing a wage disparity of approximately $17,000.

According to the Equal Pay Act, as amended starting January 1, 2019, employers may not explain any pay disparity between employees of opposite sexes, or employees of different race or ethnicity, based on an employee’s former wage.

According to the California Government’s Department of Industrial Relations website: “The amended Equal Pay Act prohibits an employer from paying any of its employees wage rates that are less than what it pays employees of the opposite sex, or of another race, or of another ethnicity for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.”

“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.

As part of the agreement 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.

Plaintiffs also argued that they were given less prestigious assignments despite their experience, giving them fewer opportunities for promotion.

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.