Chipmaker Intel negotiated with the US Labor Department for $5 million to settle "systemic gender disparity" claims against women, American-African and Hispanic workers.
According to a Labor statement, Intel will pay $3.5 million in back pay and fees to former staff. As part of its annual pay equality review, Intel must also commit at least $1.5 million in pay equity changes for the next five years for its US engineers.
The workers in dispute were in Arizona, Texas, and California's Intel plants. With more than 20,000 people working in Washington, Intel is one of Oregon's largest jobs provider.
"Intel is dedicated to improving the diversity of its workplace and ensuring that it is an environment where everyone has equitable opportunities for success," the company said, adding that it "glad to have settled this problem."
The agreement was reached with the Federal Contract Enforcement Services, which oversees suppliers' contracts and sub-contractors that do business with the federal government. Last year, the company and Intel began studying pay issues.
The settlement resulted from the termination of an Early Settlement Agreement with the Federal Contract Enforcement Program Office through the chip company.
In November 2018, the OFCCP initiated the Early Settlement Agreement initiative to provide federal contractors with a way to ensure conformity with federal anti-discrimination laws.
Based on a finding by the OFCCP, Intel is among the first tech giants to take numerous constructive actions to ensure equity in pay. "As a consequence of last year's studies, the OFCCP disclosed that in January this year that the company reached international pay equity."
Intel added that they look forward to sharing more details with regards the new results later this year, including paying data. Upon entering into this deal, Intel will be disqualified for five years from potential assessments.
Intel is under this authority since, according to the OFCCP report, and provides products and services to several federal agencies including NASA.
Throughout 2017 Intel also announced that as part of its annual report on diversity and inclusion, it had paid equity to women and minority staff in the US.
In other developments, the US chipmaker said on Tuesday that it agreed to buy a $27 million software business from Toronto-based Pivot Technology Solutions Inc.
Intel said it would purchase Smart Edge, a technology that helps break data and make it more user-friendly for computer machines to react more quickly.
The software is designed to operate on Intel's processors, which are best known as the foundation of most personal computers but which the firm hopes to market with 5G hardware, the next wave of wireless data networks to be introduced this year.
