Google's 'Trust Us' Approach Doesn't Satisfy Pay Gap Skeptics

Google, which has long portrayed itself as one of the world's best workplaces, faces government accusations that it underpays women and is resisting pressure to turn over salary data to disprove them.

The Labor Department sued Google in January after the company refused to submit 19 years of pay data for more than 21,000 employees for a routine audit into its pay practices. The department needs more Google salary data because an initial review of 2015 figures "found systemic compensation disparities against women pretty much across the entire workforce," according to testimony from a Labor Department official in April.

Google, a unit of Alphabet Inc., says its annual salary analyses show no gender pay gap among its 74,000 employees. "So we were quite surprised" by the Labor Department's accusations, "which came without any supporting data or methodology," Google said in an April blog post. Google has declined to release the numbers behind its analyses.

Google argued the Labor Department's request was overly broad, a violation of its employees' privacy, and costly to comply with. An administrative law judge at the Labor Department is expected to rule soon.

The department can investigate Google because the company provides advertising and cloud services for the federal government.

Generous compensation and perks have made Google one of the world's top places to work. But the company's resistance to release more pay data has further ensnared it in a larger debate about whether women and some minorities have the same shot at success in tech as the white and Asian men who dominate the industry.

"They [Google] say, 'Trust us, there is no gender pay gap. We've got everything under control,'" said Natasha Lamb, managing partner at Arjuna Capital, a boutique investment firm that has pressed tech companies to release salary information. "A trust-us approach is no longer helpful or useful when other companies are disclosing the data. It makes it look like they have something to hide."

All the major tech companies -- Google, Facebook Inc., Apple Inc., Amazon.com Inc., Microsoft Corp. and others -- are under pressure to balance their workforces. In their struggle to attract more women and underrepresented minorities, many have highlighted that their internal analyses show they pay men and women equally -- but many don't make the data public.

Facebook said in an April blog post that "men and women are paid the same for the same work" and its "compensation is intentionally formulaic and reflects individual performance." The company declined to comment beyond the post.

The Labor Department sued Oracle Corp. in January, accusing the software giant of paying white men more than their counterparts, and favoring Asians for certain technical roles. Oracle declined to comment.

Google has fought earlier efforts to lift the veil on pay. In 2015, then-Google engineer Erica Baker said she faced retaliation from her managers for starting a crowdsourced spreadsheet, in which approximately 5% of employees shared their salaries, that showed disparities. Ms. Baker said the spreadsheet helped some employees negotiate improved salaries, but she left Google that year. Google declined to comment.

For the past two years, Arjuna Capital has requested that Google disclose the percentage of female pay to male pay. Seven other firms complied last year, including Apple, Amazon and Microsoft.

Google abruptly reneged on an agreement with Arjuna last year to reveal the figure if Arjuna withdrew a shareholder proposal requesting the tech firm to do so, according to emails reviewed by The Wall Street Journal. "After further consideration, we are not able to agree to the proposal," a Google executive wrote in April to Ms. Lamb, according to the emails. Google declined to comment on the emails.

Facebook didn't comply to a similar request from Arjuna to release its pay data.

Earlier this month at Alphabet's shareholder meeting, Ms. Lamb again pressed executives for data. A Google human-resources executive answered that in-depth analyses of 52 separate job categories last year showed the company has no gender pay gap. "We are really committed to this and absolutely confident in our processes," he said. Google then moved the meeting along.

Google said it has already provided the Labor Department with two years of data among 740,000 pages of documents. The department hasn't filed formal charges of pay discrimination against Google, and it is unclear if it will. The Labor Department didn't respond to a request for comment.

Even with the additional data, it isn't certain if the question of whether Google has a gender pay gap will be put to rest. Experts say a continuing debate over what equal pay looks like has stalled progress on the issue, exacerbated by a paucity of data from employers.

It is possible that where employees or regulators see discrimination, the company sees equal pay, experts say.

Equal pay is generally regarded as people being paid the same for doing substantially similar work. But levels of responsibility and job titles could vary even as employees are considered to be doing similar work, leading to pay gaps, said Joelle Emerson, chief executive of Paradigm, which advises tech firms on diversity.

A pay gap "does not always emerge in these blatant ways where Joe and Jane have the exact same job and the exact same title and he is being paid more," Ms. Emerson said.

Employer-review site Glassdoor Inc. said in April that it analyzed pay data shared by 1,967 Google employees since 2006 and found "no statistical gender pay gap." Glassdoor said it found a 16.3% pay gap when comparing average pay for men to women as a group, but that gap shrank to 1.6% when it added in factors such as job title, experience and education.

Write to Jack Nicas at jack.nicas@wsj.com and Yoree Koh at yoree.koh@wsj.com

(END) Dow Jones Newswires

June 24, 2017 07:14 ET (11:14 GMT)