IBM pays $17 million to settle US DOJ probe over DEI
HR and compliance teams at US federal contractors must halt bonuses tied to demographic targets
Change
IBM agreed to pay $17 million and to terminate or modify several diversity, equity and inclusion programs after the US Department of Justice's Civil Rights Fraud Initiative alleged the company used a 'diversity modifier' that linked bonus compensation to demographic targets.
Why it matters
Compensation schemes that set demographic targets can now be treated as civil fraud by US enforcement authorities. Employers that apply such demographic-linked pay mechanisms face enforced program changes, financial settlements and potential contract sanctions.
Implications
- — Compliance teams, HR compensation teams, and legal teams at US federal contractors — must immediately audit and suspend any bonus or pay structures that tie compensation to demographic targets — failure risks civil-fraud enforcement, financial penalties and enforced termination or modification of those programs.
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Source
Economic Times
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