Pay Equity Analysis & Remediation Flashcards

An organization conducts annual pay equity audits. Which cadence consideration is MOST important for ensuring remediation adjustments are effective?

Answer: Adjustments should be implemented before the next performance cycle so equity is not eroded by merit increases

If merit increases are applied before remediation adjustments, percentage-based raises can widen gaps further; timing adjustments before merit cycles preserves the equity achieved.

A company's raw gender pay gap is 18%, but after controlling for job level and tenure the adjusted gap drops to 2%. What does this most likely indicate?

Answer: Most of the gap is explained by occupational segregation and representation differences, not direct pay discrimination

A large drop from raw to adjusted gap typically signals that women are concentrated in lower-level roles, which is an equity concern even if direct pay discrimination is limited.

Which of the following is an example of 'systemic discrimination' in compensation as opposed to individual manager bias?

Answer: A job evaluation system that historically undervalues roles dominated by women

Systemic discrimination arises from policies and structures — like biased job evaluation — that affect a class of employees, not just isolated individual decisions.

What is the purpose of a 'proactive equity adjustment' (sometimes called a pay equity 'true-up')?

Answer: To correct compensation disparities before they become legal violations or lead to litigation

Proactive equity adjustments correct pay disparities identified through internal audits, reducing legal exposure and improving fairness before employees or regulators identify the issue.

Under the Lilly Ledbetter Fair Pay Act of 2009, when does the statute of limitations for filing a pay discrimination charge reset?

Answer: With each discriminatory paycheck issued, receipt of benefits, or other compensation payment

The Lilly Ledbetter Act overturned the Ledbetter v. Goodyear Supreme Court decision by restarting the 180/300-day filing window with each discriminatory paycheck.

A pay equity analyst identifies that a group of employees is 'red-circled' (paid above the maximum of their salary range). How should red-circled pay be handled in a pay equity analysis?

Answer: Red-circled status should be flagged and analyzed separately to determine whether red-circling disproportionately affects any protected class

If red-circling is concentrated among one demographic group, it may reflect historical pay decisions that perpetuate inequity, so it must be analyzed for disparate impact.

Which pay equity analysis approach examines whether a compensation policy or practice, neutral on its face, disproportionately disadvantages a protected group?

Answer: Disparate impact analysis

Disparate impact analysis (rooted in Griggs v. Duke Power Co.) examines whether facially neutral policies produce discriminatory outcomes for protected classes.