Pay Equity

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:

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

Related Skills

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