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Oracle is currently embroiled in a lawsuit claiming the company discriminates against its female employees when it comes to equal pay for the equal job. Through an analysis of the company’s own pay data, the economist David Neumark – a professor at the UC Irvine, has established Oracle paid female employees as much as $13,000 less per year, on average, compared to the male employees during the same job.

Neumark says that the chances of such a big disparity in pay occurring by chance is less than one in a billion. His analysis was submitted as part of the evidence on a motion to pursue a case of sex discrimination by Oracle. In a class action suit filed in 2017 on behalf of 4,200 female employees who have previously worked at the company’s information technology, support functions, and product development department since 2013.

The analysis done took into account the male and female employees’ career levels, office location, performance review scores, tenure at Oracle and overall work experience. Even after accounting for all that, the analysis shows women are consistently underpaid compared to the male workers in the company.

Violation of California Equal Pay Act

As per Oracle’s own data, the analysis shows the company is in clear violation of the Equal Pay Act of the State of California. Though this data did not include payment records for stuff recruited directly after college.

The main difference in earnings between male and female employees comes from the bonuses and stock grants Oracle has been giving. Though on the base pay, men and women in the same rank earned almost the same base pay; men had 3.8% higher. When the female employees got the bonuses, on average they were 13.2% less compared to what the male employees got. On stock grants, there was a disparity of 33.1%.

Neumark says according to analysis, what led to the disparity in base pay came about from Oracle’s practice prior to October 2017 of using the employee’s previous salary to set their initial salary. The company required the recruiter to ask a job candidate about their current pay level.

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