Mastercard Settles Pay Discrimination Lawsuit: $26M Payout

Mastercard, Inc. has agreed to pay $26 million to settle a pay discrimination lawsuit filed by female, Black and Hispanic employees.

The complaint alleged Mastercard’s compensation, promotion and assignment practices had an adverse impact on female, Black and Hispanic employees who were paid less than their similarly situated male and white co-workers, resulting in pay discrimination in violation of the Equal Pay Act.

Approximately 7,500 female, Black and/or Hispanic employees were included in the proposed class action. About 1,200 are in both the gender and race protected classes.

As an example of the allegations listed, one plaintiff alleged she was hired at a specific level on the company’s rubric and offered a salary that aligned with that job. However, she said she was required to perform work outside of the scope of her role, “including taking on managerial work that should’ve been performed by individuals in the next level up.”

In her view, this requirement amounted to pay discrimination. She said she left the company because she was not receiving equal pay for equal work.

8-Figure Payout, Regular Pay Equity Audits & More

Mastercard agreed to settle the case before the proposed class action complaint was filed in federal court, according to Outten & Golden LLP, the firm that handled the case.

Under the preliminary settlement agreement, Mastercard will:

• Pay $26 million into a settlement fund that will cover the alleged backpay payments to class members and other damages and interest, as well as court-approved attorneys’ fees and administrative fees for the settlement fund
• Continue to conduct annual pay equity audits with an external consulting firm for three years and report those results publicly to ensure there is no ongoing pay discrimination, and
• Hire an industrial organizational psychologist to evaluate its career ecosystem for bias.

“We are very pleased to have reached this nationwide settlement with Mastercard, which we believe represents a fair compromise,” Cara E. Greene, Partner at Outten & Golden LLP and lead counsel for the plaintiffs, said in a statement. “Importantly, the non-monetary terms of the settlement will help ensure that Mastercard maintains an equitable workplace for the thousands of women and people of color it employs. Settlements like this help to level the playing field and move the entire industry closer to pay equity.”

Next Steps to Prevent Pay Discrimination

As you may have heard, Women’s Equal Pay Day is right around the corner — on March 25.

Pay transparency can help reduce the pay gap between men and women. It can also help reduce pay inequities by preventing pay discrimination based on other protected categories, like race, age and religion.

The good news is, many employers take steps to make sure employees are paid competitively, according to a recent survey. In Workplace Policies and Pay Transparency, 301 employers shared their pay transparency strategies. The top three reported action steps were:

1. Market-pricing all or a significant number of our jobs (63%)
2. Updating our salary structure(s) or market pay ranges (58%), and
3. Conducting a pay equity analysis (49%).

Click here to see the full list.