PepsiCo Inc. has agreed to pay $3.13 million to settle federal charges that its hiring practice of using criminal background checks discriminated against black applicants.

According to the Equal Employment Opportunity Commission (EEOC), which first brought the issue to PepsiCo’s attention in 2006, the practice of screening out applicants who were arrested of crimes but not convicted violated Title VII of the Civil Rights Act of 1964. The Act says that denying employment based on criminal background may be illegal unless the crime is relevant to the job being sought.

PepsiCo spokesman Dave DeCecco said the beverage company has always applied the background checks neutrally and added that it had been working with the EEOC to revise the policy since the issue first surfaced.

In addition to the $3.13 million, which will be divided among black people who had applied for jobs with PepsiCo, the company has also agreed to improve training and extend job offers to applicants who were denied under the old policy.