Mastercard has agreed to a $26 million settlement and to implement measures to audit its employment practices following allegations of systemic pay bias affecting thousands of female, Black, and Hispanic employees. The settlement, which includes a commitment to overhaul the company’s pay and promotion processes, was filed in New York federal court on Tuesday.
The lawsuit, originally filed by four former employees, accused Mastercard of routinely placing women and workers of color into lower-paying roles and systematically denying them equal raises and promotions compared to their white male counterparts. The plaintiffs, who represent a class of approximately 7,500 individuals, claim that these disparities persisted over time, compounding into significant pay inequities.
Under the terms of the settlement, Mastercard will pay $26 million in compensation to the affected employees. In addition to the financial settlement, the company will hire external consultants to audit its pay practices and engage an industrial psychologist to review the company’s “career ecosystem” to ensure a more equitable workplace for all employees.
While Mastercard has denied any wrongdoing, the company expressed its desire to settle the case to avoid prolonged litigation and to prioritize fostering a diverse and inclusive environment.
“We are committed to maintaining a workplace where every employee feels valued and has the opportunity to reach their full potential,” said Seth Eisen, a spokesperson for Mastercard. “Although we strongly disagree with the allegations, we believe this settlement is in the best interest of all parties involved.”
Plaintiffs’ attorney Cara Greene of Outten & Golden lauded the settlement, noting that the monetary compensation, coupled with the non-financial measures, would help ensure long-term equity at Mastercard. Greene also emphasized the broader impact of the case on the tech and financial sectors.
“Settlements like this are an important step toward leveling the playing field in the workplace,” Greene said. “This agreement will bring us closer to achieving pay equity, not just at Mastercard, but across the entire industry.”
The lawsuit, which alleged violations of federal and state laws banning pay discrimination, was filed under the case name Hayman v. Mastercard, U.S. District Court for the Southern District of New York, No. 7:25-cv-00340.
According to the lawsuit, in 2023, the median pay for Black and Hispanic employees at Mastercard was 94.3% of the compensation earned by their white colleagues. Women earned 96.4% of the compensation paid to male employees in similar roles. The plaintiffs argued that these disparities violated federal and state anti-discrimination laws, including provisions related to pay equity, race, and sex-based bias.
The case highlights ongoing concerns over gender and racial pay gaps in major corporations, particularly in industries like finance and technology, which have historically struggled with diversity and inclusion.
This settlement marks a significant step in addressing pay bias within the corporate world, with the potential to influence future employment practices at major companies.
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