Penn State Reaches Six-Figure Settlement Over Pay Equity Issues

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Penn State University agrees to pay $703,742 in back wages to settle gender pay gap allegations, but denies intentional discrimination.

At a Glance

U.S. Department of Labor found pay discrepancies affecting 65 female employees since July 2020
Affected roles include facilities, extension education, senior administration, and some faculty positions
Penn State attributed the issue to “unintentional pay discrepancies” and did not admit violations
The university agreed to ensure future compensation practices are free from discrimination

Penn State Settles Gender Pay Gap Allegations

Pennsylvania State University has agreed to pay $703,742 in back wages and interest to resolve allegations of gender pay discrimination. The settlement, announced by the U.S. Department of Labor, comes after a compliance review revealed that since July 1, 2020, Penn State had been paying 65 female employees less than their male counterparts in similar positions. The affected roles span various departments, including facilities operations and maintenance, extension education, senior administration, and several faculty positions.

While Penn State has agreed to the settlement, the university has not admitted to any violations of federal law. Instead, university officials have characterized the situation as stemming from “unintentional pay discrepancies.” This stance highlights the complex nature of pay equity issues in large institutions and the challenges in maintaining fair compensation practices across diverse roles and departments.

.@Penn_State will pay $703K in back wages and interest to resolve alleged gender-based pay discrimination.https://t.co/NrWXsqwm9C pic.twitter.com/NiTA9zkv0C

— U.S. Department of Labor (@USDOL) September 18, 2024

University’s Response and Corrective Actions

In response to the findings, Penn State has committed to ensuring its compensation and pay practices are free from discrimination moving forward. Suzanne Adair, the university’s vice president for equal opportunity and access, addressed the situation, emphasizing the institution’s commitment to fair employment practices.

“While the number of affected employees was small relative to the overall campus population, the University takes such matters seriously and worked diligently with the government to reach a resolution that fairly compensated the affected women,” said Adair. “We appreciate the government’s efforts and are pleased that the audit identified the pay anomalies so that corrective action could be taken.”

The university has also highlighted its recent $60 million investment in the Compensation Modernization Initiative. This program aims to align staff salaries with market-informed salary grades and promote equitable pay practices across the institution. Penn State’s proactive approach in addressing these issues demonstrates a commitment to maintaining fair employment standards, even as it navigates the complexities of managing a large, diverse workforce.

Federal Oversight and Implications

The settlement underscores the ongoing scrutiny that federal contractors face regarding equal employment opportunities. Samuel Maiden, the mid-Atlantic regional director for the Office of Federal Contract Compliance Programs (OFCCP), emphasized the importance of compliance for institutions receiving federal funding.

“Employers that hold federal contracts must provide all employees with equal employment opportunities and audit their employment processes to make certain no barriers to equal employment exist,” said Samuel Maiden, the mid-Atlantic regional director for the Office of Federal Contract Compliance Programs

With Penn State receiving over $178 million in federal contracts in 2024, the settlement serves as a reminder of the responsibilities that come with such funding. The case also highlights the broader issues of gender pay equity in higher education and the ongoing efforts to address and correct disparities in compensation across various sectors.