Dive Brief:
- JPMorgan Chase agreed Nov. 2 to pay $800,000 in back pay and interest and set aside $9 million over five years to resolve charges that it has underpaid women in its investment bank and technology and market strategies function since 2012, according to a November conciliation agreement with the Labor Department's Office of Federal Contract Compliance Programs (OFCCP).
- Under the agreement, the bank agreed to use the $9 million for annual pay adjustments. Beginning in 2021 and continuing for several years, the company will conduct pay equity analyses of U.S. employees to address pay equity for women and minorities. Beginning in 2022 and continuing for several years, the company agreed to make annual pay equity adjustments. If the pay adjustments don't require the full amount set aside, the difference will be used to fund inclusion and diversity efforts and programs, the settlement agreement said.
- "Although we strongly dispute the allegations, this resolution allows all parties to move forward cooperatively," a JPMorgan spokesperson said in a statement emailed to HR Dive.
Dive Insight:
JPMorgan is not the only big U.S. bank to settle with the OFCCP this year. Wells Fargo agreed in August to make job offers to 580 applicants and pay $7.8 million in back wages and interest to settle allegations of hiring discrimination by the agency.
The OFCCP alleged the bank violated Executive Order No. 11246 by discriminating against 34,193 African American applicants in several types of positions and against 308 female applicants for administrative support positions.
The office also sent Wells Fargo a letter in October reminding the bank that federal law prohibits race-based quotas and hiring based on race. The San Francisco-based lender pledged in June to double Black leadership by 2025 — an initiative that drew fire because CEO Charlie Scharf referred to the pool of Black talent as "very limited."
OFCCP enforcement collections hit a record high in fiscal 2019. That figure included settlements totaling $20 million to resolve pay discrimination claims involving Bank of America, Goldman Sachs and Dell.
Pay equity has been a concern for many companies, not just those dealing with a government investigation. American Express said last month it has achieved 100% gender pay equity worldwide, in addition to maintaining equal pay across races and ethnicities in the U.S.
Citi became the first big U.S. bank to disclose raw pay gap figures, finding a 29% difference between what men and women at the company earn. The bank reduced that gap to 27% this year. It also sought to bring awareness to the gap by launching a campaign last year with a two-minute hero video capturing the reactions of young girls at the moment they learn about it.