Dive Brief:
- Esri, a digital mapping and analytics company based in Redlands, California, will pay $2.3 million in back pay and interest to resolve the U.S. Department of Labor’s allegations of pay discrimination, the agency announced August 3.
- According to DOL, preliminary findings of a federal compliance evaluation revealed that Esri systematically discriminated against 143 female software development engineers and 33 female quality assurance engineers in 2017.
- “Esri has resolved a matter with the OFCCP, initiated from a routine audit of the 2017 plan year,” the company said in a statement released to HR Dive. “Esri has taken steps to adjust internal job classifications and will move ahead with OFCCP’s recommendations. It is always Esri’s intention to be fair and equitable and we are committed to continuing to improve our organization.”
Dive Insight:
Employers are prohibited from pay discrimination by a few laws: the Equal Pay Act, which amends the Fair Labor Standards Act, prohibits employers from pay discrimination based on sex; a range of other laws, which prohibit pay discrimination based on race, color, religion, sex, pregnancy status, gender identity, sexual orientation, national origin, age, disability and genetic information; and Executive Order 11246, which prohibits pay discrimination by federal contractors.
Although pay discrimination is illegal, research shows it persists. According to a 2020 survey by the job site Hired, tech companies offered men higher salaries for the same job 63% of the time. Hired chalked up this outcome in part to an expectation gap: “Salary expectations any candidate has for a given job are closely tied to the salary ultimately offered to them by a prospective employer,” then-CEO Mehul Patel wrote in his introduction to the report. “Our data reveals male candidates expect to earn more and our report shows their offers match that expectation.”
Hired attributed the expectation gap to women being more prone to imposter syndrome. The report collected responses from women who noted they were less likely to talk about their accomplishments than male counterparts, and that they often didn’t know a wage gap existed due to a lack of salary transparency.
But even when women took action to address the disparity, they were less successful than men, the report found. Fifty-seven percent of men said they were able to negotiate a pay increase from an initial offer, compared to 50% of women.
The DOL has put significant effort into its wage and hour enforcement this year, cracking down on unpaid overtime, misclassifications and child labor violations, among others.
In May, the agency brought a similar pay discrimination charge against LinkedIn, which settled the allegations for $1.8 million, although it said it disagreed with the finding.
