Food and agriculture giant Cargill, has agreed to settle U.S. Department of Labor allegations of hiring discrimination at a Kansas-based subsidiary. It will pay $2.2 million in back wages and interest to nearly 3,000 applicants who were unfairly rejected for production jobs at facilities in several states.

The charges stem from an investigation into hiring practices by the agency's Office of Federal Contract Compliance Programs. Since 2005, Cargill has held federal contracts worth more than $1.4 billion. During a series of scheduled reviews, as a condition of those contracts, OFCCP compliance officers found evidence that Cargill's hiring processes discriminated against candidates based on their sex, race, and ethnicity. The reviews also uncovered violations of record-keeping requirements. The Department of Labor filed a lawsuit over the violations and the settlement resolves those complaints.

In addition to paying more than $2.2 million in back wages and interest to the rejected applicants, Cargill agreed to extend 354 job offers to them as positions become available. It also agreed to undertake extensive self-monitoring measures to oversee future hiring practices.

The action comes as OFCCP moves forward with a controversial compensation data collection tool intended to identify discriminatory pay practices by government contractors. The agency plans to issue a notice of proposed rulemaking this month.

The bulk of the 2,441 public comments received in advance of that proposal, through an advanced notice of proposed rulemaking issued in 2011, are critical of the plan.  Among the concerns: it will impose significant new compliance burdens on how compensation data is collected, maintained, and reported to the OFCCP; it would drastically expand the scope of compensation audits; and that a one-size-fits-all tool for collecting compensation data would fail to consider factors each individual contractor uses to determine compensation. Contractors also expressed concerns that the new rules would expand what gets included in compensation, aggregating base salary, W-2 earnings, commissions, stock options, health and retirement benefits, and other perks.

Critics also say that the lack of enforcement actions show that the new requirements are not needed. Since 2006, of the more than 25,500 compliance evaluations the OFCCP has conducted, only seven ended with a finding of systemic pay discrimination.