The State Street Corp., a financial services organization, commissioned the famous “Fearless Girl” statue on Wall Street to promote female involvement in corporate leadership. Now, that same organization has agreed to pay women and African-American executives $5 million after the Department of Labor found that it had systematically underpaid them. State Street denies any wrongdoing.
The settlement came about after a 2012 wage compliance review by the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP). The review discovered a statistically significant differential between the pay of men and women in leadership roles and between African-American and white employees. Even after accounting for legitimate factors, a differential remained.
The OFCCP is responsible for ensuring that federal contractors and subcontractors do not discriminate on the basis of race, color, national origin, gender, disability, veteran status and other prohibited factors, or retaliate based on certain protected activities.
According to the settlement agreement, the discrimination has been occurring since at least Dec. 1, 2010. The DOL found that State Street discriminated against 305 women and 15 African-Americans employed in positions as senior vice presidents, managing directors and vice presidents by paying them less than similarly situated male and white employees. This pay differential included a lower base salary, lower bonuses and less in total compensation.
The affected employees will receive $4,492,174.39 in back pay and $507,825.61 in interest. The terms of the settlement require State Street to set up a settlement fund and to locate and notify the affected employees of their claims.
State Street is also required to perform an annual compensation analysis of its senior vice presidents, managing directors and vice presidents for three years. Then, it must investigate and remedy any statistically significant disparities. It must also evaluate whether starting salaries, raises, promotions, performance evaluations, transfers, leave policies and other job actions are effectively discriminatory against women or African-Americans and to remedy any that are.
Furthermore, State Street must refrain from retaliating against the affected employees, implement policies that do not adversely affect women or African-Americans in the specified job categories, perform training, self-monitor or audit the affected positions, and allow the OFCCP to monitor compliance with the agreement, among other requirements.
State Street disagrees with the OFCCP’s findings, but has agreed to the terms of the settlement. In a statement, the company said it was “committed to equal pay practices.”
State Street’s “Fearless Girl” statute was commissioned in honor of International Women’s Day.