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pay-equity

Business
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Statistical analysis of compensation for equity and regulatory compliance

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Pay Equity Analysis Skill

Overview

The Pay Equity Analysis skill provides capabilities for statistical analysis of compensation to identify and address pay disparities. This skill enables regression-based analysis, gap identification, remediation planning, and regulatory compliance reporting.

Capabilities

Regression Analysis

  • Perform regression-based pay equity analysis
  • Apply multiple regression methodologies
  • Control for legitimate pay factors
  • Handle multicollinearity issues
  • Support various model specifications

Gap Identification

  • Identify statistically significant pay gaps
  • Calculate adjusted and unadjusted pay gaps
  • Analyze gaps by protected class
  • Detect intersectional disparities
  • Quantify gap magnitudes

Remediation Planning

  • Generate remediation recommendations
  • Calculate remediation costs
  • Prioritize remediation approaches
  • Model remediation scenarios
  • Track remediation progress

Reporting

  • Create pay equity reports for leadership
  • Generate board-level summaries
  • Build compliance documentation
  • Support external reporting requirements
  • Maintain audit trails

Trend Monitoring

  • Monitor pay equity trends over time
  • Track gap closure progress
  • Alert on emerging disparities
  • Compare year-over-year results
  • Benchmark against industry

Compliance Support

  • Support regulatory compliance (EEOC, state laws)
  • Generate required reports
  • Document analysis methodology
  • Prepare for potential audits
  • Track legislative changes

Usage

Equity Analysis

const equityAnalysis = {
  population: {
    scope: 'full-company',
    excludeNew: true,
    newHireThreshold: 6
  },
  dependentVariable: 'base_salary',
  protectedClasses: ['gender', 'race_ethnicity', 'age'],
  legitimateFactors: [
    'job_level',
    'job_family',
    'years_experience',
    'tenure',
    'performance_rating',
    'location_tier'
  ],
  methodology: {
    type: 'multiple-regression',
    robustnessChecks: true,
    outlierTreatment: 'winsorize',
    significanceLevel: 0.05
  },
  intersectionality: {
    analyze: true,
    combinations: [['gender', 'race_ethnicity']]
  }
};

Remediation Model

const remediation = {
  analysis: 'equity-analysis-2026-01',
  approach: 'bring-to-predicted',
  constraints: {
    maxIndividualAdjustment: 10,
    totalBudget: 500000
  },
  prioritization: {
    method: 'largest-gap-first',
    protectedClassPriority: ['gender', 'race_ethnicity']
  },
  implementation: {
    timing: 'merit-cycle',
    communication: 'manager-led'
  }
};

Process Integration

This skill integrates with the following HR processes:

ProcessIntegration Points
pay-equity-analysis.jsFull analysis workflow
salary-benchmarking.jsMarket data integration
grievance-handling.jsIndividual equity concerns

Best Practices

  1. Regular Analysis: Conduct pay equity analysis at least annually
  2. Proactive Approach: Address gaps before they become complaints
  3. Consistent Methodology: Use defensible statistical methods
  4. Documentation: Document methodology and decisions
  5. Legal Review: Involve legal counsel in sensitive situations
  6. Holistic View: Consider total compensation, not just base

Metrics and KPIs

MetricDescriptionTarget
Unadjusted GapRaw pay differenceTrack and reduce
Adjusted GapControlled pay differenceNot statistically significant
Remediation CompletionIdentified gaps addressed100%
Trend DirectionYear-over-year gap changeDecreasing
Compliance StatusRegulatory requirement statusCompliant

Related Skills

  • SK-012: Job Evaluation (job grouping)
  • SK-013: Comp Benchmarking (market context)
  • SK-022: Employment Compliance (legal guidance)