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Mastercard has agreed to pay $26million and implement workplace audits to resolve allegations that it systematically underpaid approximately 7,500 female, Black, and Hispanic employees.
The settlement, filed alongside a class-action lawsuit in New York federal court, highlights ongoing challenges with pay equity in corporate America.
The plaintiffs, four former employees, accused Mastercard of hiring women and workers of color into lower-paying roles, leading to cumulative disadvantages in raises and promotions compared to their white male peers. The lawsuit alleged that these practices violated federal and New York state laws prohibiting pay and workplace discrimination based on sex and race.
Mastercard settles
Despite denying any wrongdoing, Mastercard agreed to settle the claims, stating that it was the most effective path forward. “It's essential that we have a workplace where all employees feel valued, respected, and empowered to reach their greatest potential,” said a spokesperson.
As part of the settlement, Mastercard will engage external consultants to audit its pay practices and hire an industrial psychologist to evaluate its internal career systems. The moves aim to address potential inequities and improve transparency in its compensation and promotion structures.
The settlement also included data reflecting disparities in 2023, with Black and Hispanic employees earning 94.3% of the median compensation of white employees and women earning 96.4% of what their male colleagues received.
The plaintiffs’ attorney Cara Greene emphasized the significance of the settlement in advancing workplace equity. “Settlements like this help to level the playing field and move the entire industry closer to pay equity,” she said in a statement.
Reputational risks
For HR leaders, the case shows the growing legal and reputational risks associated with pay and promotion disparities and the importance of proactive audits, transparent career pathways, and structured pay policies to ensure compliance and fairness. As pay equity remains a priority for employees, investors, and regulators, HR departments must adopt data-driven strategies to identify and address any gaps before they escalate into legal challenges.
