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:

Process	Integration Points
pay-equity-analysis.js	Full analysis workflow
salary-benchmarking.js	Market data integration
grievance-handling.js	Individual 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

Metric	Description	Target
Unadjusted Gap	Raw pay difference	Track and reduce
Adjusted Gap	Controlled pay difference	Not statistically significant
Remediation Completion	Identified gaps addressed	100%
Trend Direction	Year-over-year gap change	Decreasing
Compliance Status	Regulatory requirement status	Compliant

Related Skills

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