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Google is fighting the Labor Department about equal pay for women, and both can't be right

Anita Balakrishnan

Google (NASDAQ: GOOGL) said last week that it had "closed the gender pay gap globally." Yet the Labor Department alleged in a hearing that "discrimination against women in Google is quite extreme."

The ensuing legal battle between the tech giant and the DoL illustrates the quandary faced by companies across Silicon Valley: Is gender equity improving that quickly, or is the industry just measuring different things?

"This is a data question. I don't think it's just a Google problem, it's a problem throughout tech," Recode executive editor Kara Swisher told CNBC's " Squawk Alley " on Monday.

Janette Wipper, a DoL regional director, testified in court in San Francisco on Friday that Google had "systemic compensation disparities against women pretty much across the entire workforce," The Guardian reported.

Google told CNBC it "vehemently disagree[s]," noting the DoL's methodology was unclear.

The fiery exchange came after Google failed to comply with a routine audit, according to the Labor Department. As industry watchers pointed out, the dispute highlights how there are lots of ways for companies across the technology industry to slice compensation data.

"It would be a rare organization I've ever encountered that doesn't have issues that it should be addressing," said Joelle Emerson, founder and CEO of Paradigm, which advises companies and helps with training and workshops related to diversity.

7 questions tech companies should ask

Elizabeth Ames is a senior vice president at the Anita Borg Institute, which aims to help women make significant contributions to technical fields. She said that in addition to comparing the pay of women and men in the same roles, companies should measure retention, promotion, visibility and parental leave.

  • Retention — Are women staying in the company? Ames said that while many companies compare the pay of women and men in the same jobs, women tend to be mostly highly represented in entry-level positions across the technology industry. At Google, for example, 31 percent of employees overall are women, but only 19 percent of tech workers are women, according to January 2016 data. If a company is getting substantial percentages of women in technical roles, that is a good sign for the company's recruiting, Ames said. If not, they might need to look at whether women perceive the organization the same way men do.
  • Promotion — Are women moving up the ranks? Sometimes low retention can be a sign that women aren't being looked at for promotions, Ames said. "That is basically representative that women don't get considered to promotions, so they don't experience the increase of pay that comes with being promoted," Ames said. "Women often get pushed into manager roles, or some of the roles that are sort of softer engineering roles, and they tend to pay less and to some extent have less promotion opportunities."
  • Visibility — Do senior women get the same exposure as senior men? Women are half the population, Ames said, so while having a few high-profile women is great, it's important that they are not perceived as tokens for boosting the corporate image.
  • Parental leave — Are men and women taking advantage? The Economic Policy Institute notes that women pay a "motherhood penalty," with pay lagging after they give birth. Ames noted that women may still feel disadvantaged for taking maternity leave if they don't see their male counterparts taking paternity leave.

Emerson, who litigated pay equity cases as a lawyer, said she's always skeptical when an organization says it has "solved" a pay gap issue, because there are so many more facets of the issue that should be measured beyond what the law requires.

  • Substantially similar work — Are people who add similar value to the company being given equivalent titles? "What we sometimes see is that two people may be doing the same job in reality, but they may be given a different title. A person from an underrepresented group might be in a different category, even though duties might be similar," Emerson said. "It's something that there's no uniform agreement on. Roles become nuanced within companies."
  • Quotas and performance feedback— Are women and underrepresented groups given the same access to helpful feedback? Emerson said that companies should analyze performance reviews to see if members of underrepresented groups are spoken to equally about opportunities for leadership or advancement. "I had a client once who was on a sales team and had been out for part of the year on paid parental leave. She didn't get her bonus, because she didn't hit the quota that would have been for the whole year, even though she did hit her quota when for the seven months she was there," Emerson said.
  • Robust analysis — Are intersectional identities being taken into account? Black and hispanic women and men from underrepresented groups also face pay gaps, so those factors should also be considered, Emerson said.

'It's a question of what they're going to do about it'

To the company's credit, Google has been one of the most outspoken advocates of pay equity analysis, creating a comprehensive guide for other organizations. It scores high on sites like Blendoor and InHerSight that rate companies on diversity factors.

YouTube CEO Susan Wojcicki penned an article last month on "how to break up Silicon Valley's boy's club," citing Google's improved retention of female employees after extending its paid maternity leave program. Diane Greene, senior vice president of Google Cloud, also said that she felt Google was a "safe" environment for women to ask for recognition . And Laszlo Bock, formerly a senior vice president of people operations at Google, wrote last year that Google gives women higher raises by focusing on target salaries rather than prior pay.

But some have also pointed to a dark side at Google. Erica Baker, then at Google and now at Slack, made headlines in 2015 when she created a shared spreadsheet that showed bonuses at Google were not distributed equitably.

"Google has a particularly complicated system.The issue is there's not enough women in the highest paying jobs, it's probably skewing a lot of this," Swisher said. "Look at the numbers at Google — not just Google but all of the companies in tech. Most of the engineers, who are the most highly paid people there, are men."

As companies like Uber also fight allegations of sexism, gender equity is likely to continue to be a burning concern for technology companies. Emerson said that what is disclosed publicly is less important than taking action within the organization.

"It's a question of what they're going to do about it," Swisher said.



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