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Oracle office in Bozeman, Montana. Photo: Ann Hermes/The Christian Science Monitor via Getty Images

Oracle allegedly saved $401 million over four years by systematically underpaying women and minority employees, the U.S. Department of Labor said in a new document filed on Tuesday as part of a labor lawsuit against the tech giant.

The bottom line: Silicon Valley may have a reputation for meritocracy, but recent scrutiny of the big companies' significant pay gaps is a reminder that tech is not immune from management biases common in other industries.

The Labor Department charge, reported in Wired, echoes an independent analysis of Oracle pay data filed in a private lawsuit on Friday, which alleges the company underpaid women compared with male counterparts by more than $13,000.

How it works: Lawsuits such as these, as well as a similar ones filed against other big tech companies, highlight the subtle, nearly invisible tactics that can make it difficult for employees to bridge the pay gap.

  • As the Labor Department alleges, Oracle not only relied on prior compensation to set starting salaries, but it also tended to steer women and employees of color toward lower paid positions at the company, setting these employees on a path of underpayment for the remainder of their time at the company.
  • Oracle also allegedly favored job applicants from Asia with student visas who rely on the company for sponsorship, making it easier for management to keep wages down.
  • The agency also highlights that the pay disparity widened the longer these employees remained at the company.

"This meritless lawsuit is based on false allegations and a seriously flawed process within the OFCCP that relies on cherry picked statistics rather than reality," said Oracle executive vice president and general counsel Dorian Daley in a statement. "We fiercely disagree with the spurious claims and will continue in the process to prove them false. We are in compliance with our regulatory obligations, committed to equality, and proud of our employees.”

Other big tech companies, including Google and Uber, have been accused of using similar tactics to create systemic pay gaps for women and employees of color.

Elsewhere: Last week, Citigroup released new data about its employees that showed women make 29% less than men, and people of color make 7% less than white employees in the U.S.

  • The data, which did not "adjust" for criteria like title and experience as companies often do to show "equal pay for equal work," highlighted that the bank's top and best paid jobs were overwhelmingly male and white.

The bigger picture: The tech industry's pay gap isn't limited to wages. As a recent study found, women also hold much less equity in startups, which is how success in tech most commonly makes fortunes.

Editor's note: This story has been updated with a statement from Oracle after it initially declined to comment.

Go deeper

Updated 24 mins ago - Health

2 federal judges temporarily block Biden vaccine mandates

President Biden delivers remarks on the Omicron COVID-19 variant at the White House on Nov. 29. Photo: Anna Moneymaker via Getty Images

The Biden administration was temporarily blocked from enforcing COVID-19 vaccine mandates for millions of workers by federal judges in two states on Tuesday.

The big picture: The orders, by federal judges in Kentucky and Louisiana, come one day after a federal judge in Missouri halted the mandate, which has a Jan. 4 deadline, in 10 states.

55 mins ago - World

Honduras elects first female president

Honduran President-elect Xiomara Castro, of the Libertad y Refundacion (Libre) Party, in Tegucigalpa, Honduras, on Sunday. Photo: Inti Ocon/Getty Images

Former Honduras first lady Xiomara Castro is set to become the country's first female president president, after the ruling party conceded defeat in the country's elections on Tuesday night, per AP.

Why it matters: The democratic socialist and her Libre Party have broken a 12-year run for the conservative National Party, which U.S. prosecutors alleged fostered a "narco-state," note Axios' Latinos' Marina E. Franco and Russell Contreras.

Food delivery "ghost kitchens" face major obstacles

Photo: Jakub Porzycki/NurPhoto via Getty Images

The growing popularity of food delivery has given rise to startups that open "ghost kitchens" — kitchens in warehouses or trailers that prepare food solely for delivery and have no option to dine in.

  • But they can come with a whole host of problems.

The big picture: The concept of "ghost kitchens" has been dubbed the next big thing in the future of services, with high profile backers like Uber founder Travis Kalanick. But these kitchens can be hard to run or unsafe.