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A company whose job advertisement sought only white, US-born applicants has agreed to pay a $38,500 (£30,000) fine, the federal government has announced.

The advert from Arthur Grand Technologies was "generated by a disgruntled recruiter in India and was intended to embarrass the company", the justice department said.

It was found to violate both federal civil rights and labour laws.

Arthur Grand will pay $7,500 in civil penalties to the US treasury as well as $31,000 in total compensation to people who filed complaints over the incident.

The Virginia-based IT services firm has served federal and commercial clients since 2012, according to its website.

In March 2023, a recruiter working for its subsidiary in India posted an advert for a Salesforce business analyst and insurance claims vacancy on the Indeed job-hunting website.

In bolded text, the long-term contract role includes a note: "Only Born US Citizens [White] who are local within 60 miles from Dallas, TX [Don’t share with candidates]".

The position lists clients as including HTC Global in Michigan and Berkshire Hathaway in Nebraska.

US Assistant Attorney General Kristen Clarke called the job posting "shameful" in a statement on Thursday.

“I share the public’s outrage at Arthur Grand’s appalling and discriminatory ban on job candidates based on citizenship status, national origin, colour and race," she wrote.

“Companies like Arthur Grand, that accept federal contracts cannot have a ‘whites only’ hiring process,” Michele Hodge, the US labour department's acting director of federal contract compliance, added in her own statement.

As part of its settlement agreement with the two federal agencies, Arthur Grand is also required to train its employees on the US Immigration and Nationality Act, which bars hiring or firing people based on their citizenship status and national origin. It must also revise its employment policies and undergo justice department monitoring.

In a statement to CNN, the company's CEO said it "vehemently denies any guilt or wrongdoing".

“This unauthorized posting was made by an upset employee on a Performance Improvement Plan (PIP) from their personal email address and account," Sheik Rahmathullah said.

"Upon discovering this, we took immediate and decisive action to ensure that this type of incident will never happen again, including the immediate termination of the responsible employee.”