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Alphabet's Google Charged with Gender-based Pay Disparity
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Alphabet Inc.'s (GOOGL - Free Report) division Google allegedly practices pay discrimination against its female workforce, according to The Guardian, which quoted the U.S. Department of Labor (DoL). According to DOL, Google’s pay system is biased towards the male employees across the entire workforce.
Per The Guardian, DOL has collected data as part of an ongoing investigation into Google’s pay practices. Notably, earlier this year, the company was sued by DOL for not revealing employee pay information that the department seeks regularly for compliance evaluation. (Read More: Alphabet Faces Lawsuit for Refusing to Reveal Employee Pay)
Google Denies Wrongdoing
According to the DOL regional director Janette Wipper, who testified in San Francisco court, government investigators have found evidence of “systemic compensation disparities” in Google’s remuneration system.
However, Google has “vehemently” denied the charges. According to Techcrunch, Google stated in an email that “Every year, we do a comprehensive and robust analysis of pay across genders and we have found no gender pay gap. Other than making an unfounded statement which we heard for the first time in court, the DoL hasn’t provided any data, or shared its methodology.”
We note that the news didn’t impact Alphabet’s share price, which declined a negligible 0.4% on Apr 7. On a year-to-date basis, the stock has gained 6.3% as compared with the Zacks Internet Services industry’s increase of 5.4%.
Gender Pay-Gap Does Exist
According to Fortune, which quoted Olivia Mitchell, the director of the pension research council at the Wharton School of the University of Pennsylvania, employer bias is one of the three reasons behind the pay discrimination against women.
Despite federal law requiring men and women to be paid equally for the same work, researchers found that men made 5.4% more in base pay than female counterparts, and 7.4% more in overall compensation. Per a Mar 2016 Glassdoor study report, women earn about 76 cents per dollar men earn.
Is Google in Trouble?
The charges are shocking for a brand that apparently has always been at the forefront against any gender-based disparity. According to Fortune, on Equal Pay Day (Apr 4, 2017), Google used the Twitter platform to announce that it has “closed the gender pay gap globally.”
However, post DOL charges this claim should now be taken with a pinch of salt. If found guilty, the charges will not only result in a hefty penalty or debarment from future government contracts but also dent Google’s brand image that can hurt its ability to attract advertisers.
Suspension of ads by L’Oreal and McDonald’s (MCD - Free Report) in the U.K. and big Fortune 500 companies like Pepsi, Starbucks, General Motors, Wal-Mart, J&J, JPMorgan Chase, Ford, AT&T (T - Free Report) and Verizon in the U.S. can hurt revenues anywhere between $750 million to a billion dollars. (Read More: Tech Roundup: YouTube Ad Fiasco, Palmer Luckey Leaves FB)
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
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Alphabet's Google Charged with Gender-based Pay Disparity
Alphabet Inc.'s (GOOGL - Free Report) division Google allegedly practices pay discrimination against its female workforce, according to The Guardian, which quoted the U.S. Department of Labor (DoL). According to DOL, Google’s pay system is biased towards the male employees across the entire workforce.
Per The Guardian, DOL has collected data as part of an ongoing investigation into Google’s pay practices. Notably, earlier this year, the company was sued by DOL for not revealing employee pay information that the department seeks regularly for compliance evaluation. (Read More: Alphabet Faces Lawsuit for Refusing to Reveal Employee Pay)
Google Denies Wrongdoing
According to the DOL regional director Janette Wipper, who testified in San Francisco court, government investigators have found evidence of “systemic compensation disparities” in Google’s remuneration system.
However, Google has “vehemently” denied the charges. According to Techcrunch, Google stated in an email that “Every year, we do a comprehensive and robust analysis of pay across genders and we have found no gender pay gap. Other than making an unfounded statement which we heard for the first time in court, the DoL hasn’t provided any data, or shared its methodology.”
We note that the news didn’t impact Alphabet’s share price, which declined a negligible 0.4% on Apr 7. On a year-to-date basis, the stock has gained 6.3% as compared with the Zacks Internet Services industry’s increase of 5.4%.
Gender Pay-Gap Does Exist
According to Fortune, which quoted Olivia Mitchell, the director of the pension research council at the Wharton School of the University of Pennsylvania, employer bias is one of the three reasons behind the pay discrimination against women.
Despite federal law requiring men and women to be paid equally for the same work, researchers found that men made 5.4% more in base pay than female counterparts, and 7.4% more in overall compensation. Per a Mar 2016 Glassdoor study report, women earn about 76 cents per dollar men earn.
Is Google in Trouble?
The charges are shocking for a brand that apparently has always been at the forefront against any gender-based disparity. According to Fortune, on Equal Pay Day (Apr 4, 2017), Google used the Twitter platform to announce that it has “closed the gender pay gap globally.”
Alphabet Inc. Revenue (TTM)
Alphabet Inc. Revenue (TTM) | Alphabet Inc. Quote
However, post DOL charges this claim should now be taken with a pinch of salt. If found guilty, the charges will not only result in a hefty penalty or debarment from future government contracts but also dent Google’s brand image that can hurt its ability to attract advertisers.
Of late, Google has been mired in controversies related to inappropriate content in YouTube, which has seriously impacted advertising revenues. (Read More: Google Announces Policy Revamp as YouTube Ad Row Escalates)
Suspension of ads by L’Oreal and McDonald’s (MCD - Free Report) in the U.K. and big Fortune 500 companies like Pepsi, Starbucks, General Motors, Wal-Mart, J&J, JPMorgan Chase, Ford, AT&T (T - Free Report) and Verizon in the U.S. can hurt revenues anywhere between $750 million to a billion dollars. (Read More: Tech Roundup: YouTube Ad Fiasco, Palmer Luckey Leaves FB)
Currently, Google parent Alphabet carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>