Labor Secretary Alexis Herman was set formally to announce the payment later Wednesday, a department spokesman said.

The agreement affects less than 2 percent of Texaco's female workforce in the United States, but is the largest under a Labor Department affirmative action compliance program.

The discrepancy in salaries paid to a variety of Texaco workers — ranging from secretaries to mid-level managers — was discovered by regulators in 1996 when they performed a routine review of Texaco's compliance with federal labor laws.

The agreement between Texaco and the Labor Department is known as a "conciliation agreement" rather than a settlement because no female employees ever filed a lawsuit in the matter.

White Plains, New York-based Texaco employed a total of about 9,000 women in its U.S. offices in 1996, a company spokesman said.

"The salary discrepancies were identified during a routine compliance review by the Office of Federal Contract Compliance Programs," a Texaco spokesman said.

The relatively obscure office is part of the Labor Department and monitors companies that do business with the federal government to make sure they comply with all labor laws.

Much larger agreements have been reached in actions involving the Equal Employment Opportunity Commission and in private lawsuits.

Of the $3.1 million, about $900,000 already has been paid in salary adjustments to the women and the rest of the money has been earmarked for back pay.

The women affected by the agreement worked in Texaco offices throughout the country and were not concentrated in any particular location.

Texaco said the agreement was completely separate from racial discrimination allegations lodged against the company two years ago. The oil company settled that lawsuit for $176 million.

Last year, Texaco launched a salary equity review program to "make sure that salaries for all employees across the board are equitable," the company spokesman said.