Ameriprise settles claim it underpaid black workers, but says it's inaccurate

The federal office says 20 black workers weren't paid equal to white workers. Ameriprise says that's inaccurate.
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Ameriprise is paying $128,000 in back wages, plus interest, to 20 black employees as part of a settlement with the U.S. Department of Labor – but the company says it disagrees with the findings.

The federal office claims Ameriprise did not pay 20 black employees equal to their similarly situated white counterparts. The employees were unlicensed service professionals, and the Office of Federal Contract Compliance Programs noted its findings came following a 2012 audit.

“It is unlawful for federal contractors to discriminate in pay on the basis of race,” Thomas Dowd, the acting director for the office, said in a news release. “Through this settlement the affected workers in this case will be compensated for their losses.”

Ameriprise's response

Ameriprise has some issues with those allegations though.

Paul W. Johnson, the company's vice president, Asset Management and Shareholder Communications, told GoMN in a statement they "disagree with the OFCCP’s findings and characterization." He said Ameriprise is a "values-driven company" that's committed to "diversity and equal opportunity for all of our employees."

Johnson said the office's findings are based on a "flawed statistical model."

Essentially, the numbers they used showed a pay disparity, when in reality there wasn't, Johnson said. He pointed to licensure figures, as well as the model looking at performance review ratings annually instead of as a median of multiple years, as examples.

The Department of Labor, in a conciliation document, says there were "statistically significant disparities" that couldn't be explained otherwise.

Still, Johnson notes that their pay practices and policies have not changed, nor are they required to. And that the employees have seen pay increases since then, totally separate from this settlement. He also noted there were no complaints from employees.

Of the 20 that are mentioned in the settlement, 15 still work with Ameriprise, Johnson said.

So why settle? Ameriprise said it had been working with the Department of Labor for four years, but still hadn't reached a conclusion. So they're settling it, without admitting any liability, instead of continuing to commit resources and money on the case in court.

Background

Ameriprise Financial is the 30th-largest employer in Minnesota with about 5,116 workers here, according to figures from the state's economic department. The company is headquartered in Minneapolis (where it was founded in 1894), with other large corporate offices in New York, London and Boston.

Regardless of the Ameriprise situation, there is a pay gap between black and white Americans. The Economic Policy Institute recently found the wage gap is larger now than it was in 1979. On average, black men earn about 22 percent less than white men with the same education, experience, metro status, and region of residence; black women earn about 11.7 percent less than their white female counterparts.

Ameriprise recently was ranked one of the top employers in Minnesota for supporting LGBTQ employees.

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