Pay Equity & Legal Compliance Flashcards

A pay equity remediation plan identifies underpaid employees. What is the standard recommended corrective action approach?

Answer: Increase pay of underpaid employees only (no down-adjustments)

Best practice and legal guidance consistently recommend raising the pay of underpaid individuals rather than reducing others' pay, which creates morale and legal risks.

The OFCCP's Directive 2022-01 on Pay Equity Audits requires that federal contractors:

Answer: Conduct a pay equity audit as part of their AAP and make it available during compliance evaluations

OFCCP Directive 2022-01 clarifies that pay equity audits are an expected component of the AAP and will be reviewed during compliance evaluations.

Which statistical threshold is commonly used to determine whether an observed pay disparity is considered 'statistically significant' in a pay equity analysis?

Answer: p-value ≤ 0.05

A p-value of 0.05 or less (95% confidence level) is the conventional threshold for concluding that an observed pay disparity is unlikely due to chance.

The Age Discrimination in Employment Act (ADEA) protects employees from pay discrimination based on age. Which employees are covered?

Answer: Employees 40 years of age or older

The ADEA protects individuals who are 40 years of age or older from discrimination in compensation, terms, conditions, and privileges of employment.

A compensation structure where employees in protected demographic groups are consistently placed lower in pay ranges than peers with similar qualifications is best characterized as:

Answer: Systemic pay discrimination

When protected class members are systematically placed lower in pay ranges relative to comparable peers, it indicates systemic or pattern-based pay discrimination rather than isolated incidents.

Which of the following best describes the 'intersectionality' concept as it applies to pay equity analysis?

Answer: How multiple protected characteristics (e.g., race and gender) combine to create unique pay disadvantages

Intersectionality recognizes that employees with multiple protected characteristics (e.g., Black women) may experience pay disparities that differ from those of each group analyzed separately.

Under the National Labor Relations Act (NLRA), employees generally have the right to discuss their wages with coworkers. An employer policy prohibiting such discussions would most likely be:

Answer: A violation of Section 7 protected concerted activity rights

Section 7 of the NLRA protects employees' rights to engage in concerted activity, including discussing wages and working conditions, and most blanket pay secrecy policies violate this right.