It has been reported this week that Google is to pay $118 million to approximately 15,500 employees in a class-action gender discrimination lawsuit. Whilst this case has not been decided in the UK, it is still relevant to the practices that employers undertake in relation to pay and gender equality in the workplace.

Three women originally brought the claim against Google in 2017 for pay disparity, lower bonuses, and being placed on a lower career track than their male counterparts. These women were successful in their claim in 2021. The New York Times reported recently that the settlement would reach up to $118 million, which will have to be approved by the judge. In addition, an external official will be required to review Google’s practices. It appears that the tech industry has not caught up with the fact that more and more women are being employed in that industry, and are equal to their male counterparts. However, this is not the only industry with practices that are less than satisfactory in terms of gender pay equality.

From 2017 in the UK, regulations were put in place for companies that have a headcount of 250 or more to publish data on their gender pay gap annually. The report has to include but is not limited to:

• Percentages of men and women in each hourly pay quarter 
• Percentages of men and women receiving bonuses
• The median gender pay gap using the hourly rate

We must remember that it is possible to have a gender pay gap and to pay men and women fairly. However, pay disparities between men and women could turn into an equal pay claim if, for example, the female employee is doing ‘like work’ (the same or broadly similar role) or ‘work of equal value’ (two jobs that are different but require similar levels of skill and ability or decision-making), or ‘work rated as equivalent by job evaluation study’ (the employer has carried out an analytical job evaluation study or job evaluation scheme).

The Google case is not the first of its kind, some companies have been subject to equal pay claims and/or gender discrimination both here and abroad, but despite headlines announcing ‘eye-watering’ pay-outs, it still appears that some employers may fall foul of gender equality whether in their practices or pay.

Krishna Santra, partner in our Employment team, comments: 

What this case again highlights is the need for employers to take stock of their internal processes, undertake an equality audit, identify any discrepancies in salary, benefits, career progression and incentives between male and female staff, and set out a plan to rectify them. Employers must also beware of class-actions, as a consolidated grouping of employees means that any compensation awarded could be substantial.

From a personal perspective, any pay-outs that companies make, whether through a settlement, or ordered by a Tribunal, are better served investing back into the company, staff, infrastructure and making sure that policies or procedures are in place to ensure that the company is legally compliant, rather than paying out to claimants (because of legal breaches) and lawyers, or suffering reputational damage.