Pay Equity Analysis & Remediation Flashcards

Colorado's Equal Pay for Equal Work Act (EPEWA) introduced which employer obligation that most other U.S. states had not yet required at the time of enactment?

Answer: Posting salary ranges and job descriptions for all open positions

Colorado's EPEWA requires employers to disclose salary ranges and job descriptions in all job postings, a pay transparency requirement broader than most U.S. states.

In a pay equity regression, a large R-squared value (e.g., 0.85) means:

Answer: The model's independent variables explain 85% of the variation in pay

R-squared represents the proportion of variance in the dependent variable (pay) that is explained by the independent variables included in the model.

Which of the following best describes 'pay banding' and its relationship to pay equity risk?

Answer: Pay banding widens salary ranges, increasing individual manager discretion and potentially widening pay equity risk

Broad pay bands give managers wider discretion over individual pay placement, which can increase the risk of inequitable pay decisions if not monitored carefully.

What is the correct order of steps in a proactive pay equity analysis?

Answer: Define similarly situated groups → Collect and clean data → Run statistical analysis → Remediate findings

A sound pay equity process starts with defining comparison groups, then collecting/cleaning data, performing statistical analysis, and finally remediating identified disparities.

An employer wants to understand whether pay differences between racial groups are due to legitimate factors. Which control variables are MOST appropriate to include in the regression model?

Answer: Job level, years in role, performance rating, and geographic location

Legitimate pay factors such as job level, tenure, performance, and geography are appropriate controls; personal characteristics like marital status or religion must never be included.

A pay equity remediation budget of $500,000 is allocated to address gaps. Which prioritization approach best balances legal risk and employee impact?

Answer: Prioritize employees with the largest absolute dollar shortfalls in statistically significant groups

Prioritizing employees with the largest absolute gaps in statistically significant groups targets the highest legal risk and corrects the most egregious inequities first.

Which of the following describes the concept of 'pay transparency' and its expected effect on pay equity?

Answer: Making pay ranges and criteria visible to employees, which tends to reduce gender and race pay gaps over time

Research shows that pay transparency reduces unexplained pay gaps because it makes discriminatory pay decisions harder to sustain when employees can see and compare their compensation.