Note: Penn State is firmly committed to the concept and practice of equal employment opportunity. This commitment applies to all aspects of the employment relationship, including gender and race/ethnicity-based pay equity. Penn State also does business with the federal government and, as such, is required to maintain written Affirmative Action Programs and is subject to periodic audits by the U.S. Department of Labor’s Office of Federal Contractor Compliance Programs. As a result of an audit that began in August 2021 and that included an evaluation of pay equity as of a snapshot date of July 1, 2021, the University was made aware of an underpayment issue affecting 65 female employees. The following statement provides more detail on the matter.   

UNIVERSITY PARK, Pa. — Penn State has entered into a conciliation agreement with the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP). The agency is responsible for reviewing the hiring practices, compensation practices and promotion practices of contractors and subcontractors who perform work for the federal government to ensure they are complying with affirmative action requirements mandated by law. Penn State has contracts with the federal government and, as required by law, maintains written Affirmative Action Programs. 

The routine audit by OFCCP began in August 2021, covering both faculty and staff, and focused on the University’s employment practices at the University Park campus during the 2020-2021 time period. For this time period, the government reviewed the University’s Affirmative Action Programs as well as data on applicants and hires/appointments, promotions, terminations, compensation, and the ‘good faith efforts’ to meet any established goals.  The audit also included interviews with senior leaders and, in April 2023, an onsite visit that included interviews by OFCCP with a group of employees and managers. After several years of investigation, the government identified 65 women out of the 13,811 women working on the campus whom it believed were underpaid relative to similarly situated men.  The government did not identify any issue with respect to race or ethnicity-based pay equity. 

To uphold its commitment to equal employment opportunity, Penn State engaged fully with OFCCP to bring closure to the audit. Both the University and OFCCP have since entered a Conciliation Agreement. Under the terms of the agreement, Penn State will pay a total of $703,742 — to be divided and allocated among the 65 women identified by the government as being underpaid.

“The agreement notes unintentional pay discrepancies for 65 female employees working at University Park,” said Suzanne Adair, Penn State associate vice president for Equal Opportunity and Access, who led the University’s participation in the audit. “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.  We appreciate the government’s efforts and are pleased that the audit identified the pay anomalies so that corrective action could be taken.”

Penn State actively pursues pay equity and, to this end, recently invested $60 million through the Compensation Modernization Initiative to better align staff salaries with new, market-informed salary grades and equitable pay practices. Among other things, the Initiative has resulted in a compensation structure that better aligns staff salaries with new, market-informed salary grades.  Penn State is committed to reviewing pay equity under the new structure and, where warranted, to taking remedial action.