Sample Equal Pay Act Compliance Documentation

Sample_Documents

DISCLAIMER: This is a sample template provided for informational purposes only. It does not constitute legal, tax, or financial advice. Organizations should consult their own legal and tax advisors and tailor this document to reflect their specific business needs, geographies, and applicable laws.

Equal Pay Act Compliance Documentation: <Company Name>

Document Type	Category	Title	Company	Version	Effective Date	Last Review Date	Next Review Date	Document Owner	Approvers
Equal Pay Act Compliance Documentation	Compliance & Governance	Equal Pay Act Compliance Program	<Company Name>	v<Version Number>	<Effective Date>	<Last Review Date>	<Next Review Date>	<Head of Total Rewards>	<Chief Human Resources Officer>; <General Counsel>; <Compensation Committee Chair>

Purpose and Objectives

The purpose of this document is to establish the governance, processes, and controls by which <Company Name> complies with Equal Pay Act and equivalent pay equity laws in <Country> and other jurisdictions where it operates. This document provides Total Rewards professionals, HR, Legal, and business leaders with a practical, repeatable framework to identify, evaluate, remediate, and prevent sex-based or other prohibited pay disparities for substantially equal or comparable work.

Objectives:

Articulate the company’s pay equity principles aligned to our compensation philosophy.
Define a standardized methodology for pay equity analyses, including job comparators, statistical techniques, thresholds, and remediation paths.
Clarify roles, responsibilities, and approval authority across HR, Legal, Finance, and business units.
Establish an annual compliance cycle and documentation practices that meet legal requirements and internal governance standards.
Provide guidance on proactive risk mitigation, training, and communication to employees and managers.

Scope and Applicability

In Scope

Employees of <Company Name> in <Country/Countries> where equal pay or pay equity laws apply.
All regular employees (full-time and part-time) on company payroll in the following categories:
- Hourly and non-exempt employees
- Salaried and exempt employees
- Individual contributors and people managers
Base pay, non-discretionary bonuses, shift differentials, geographic premiums, and other non-discretionary wage components.
Equity compensation where required by local statute or where company policy includes equity in equal pay assessments.
Mergers, acquisitions, and divestitures as they relate to transfer or integration of pay policies and employee cohorts.

Out of Scope

Contractors, consultants, interns not on payroll, and agency workers (unless local law explicitly includes).
Discretionary bonuses not tied to measurable criteria, one-time spot awards without predefined eligibility, and long-term incentives where not required by applicable law.
Geographies without employees or without relevant equal pay regulations, unless voluntarily included by <Company Name> policy.

Applicability Notes

Equal pay laws vary by jurisdiction. This program is designed for modular application and will be adapted to <Country> and <State/Province> requirements, including the <Country/State> Equal Pay Act and associated regulations, pay transparency acts, salary history bans, and anti-retaliation provisions.
Where collective bargaining agreements apply, <Company Name> will adhere to negotiated wage structures and consult with labor representatives as required.

Legal and Regulatory Overview

Definitions

Equal Pay for Equal Work: Employees performing substantially equal work in the same establishment must be paid equally, regardless of sex, subject to permissible differentials.
Comparable or Substantially Similar Work: Work that requires similar skill, effort, and responsibility under similar working conditions, even if job titles differ.
Protected Characteristics: Under many statutes, sex is the core protected characteristic. Local laws may extend protections to gender identity, race/ethnicity, age, disability, or other characteristics. Refer to <Country/State> statutes for the definitive list.

Prohibited Practices

Paying different wages to employees of different sexes for substantially equal or comparable work, except where a differential is based on:
- A seniority system
- A merit system
- A system which measures earnings by quantity or quality of production
- A differential based on any factor other than sex (or other protected status), provided the factor is job-related and consistent with business necessity in jurisdictions requiring this standard
Retaliation against employees who inquire about, discuss, or file complaints regarding compensation.
Use of salary history where prohibited by law.

Required Employer Actions

Maintain wage records and job evaluation documentation.
Conduct periodic equal pay analyses and timely remediation.
Provide pay scale disclosures and publish pay reports where mandated.
Engage in good-faith consultations with works councils or unions where applicable.

Legal Disclaimer

This document is not a substitute for legal advice. Legal interpretations and jurisdiction-specific requirements must be validated by <Legal Counsel> prior to implementation.

Governance and Roles

Accountability Model

Board/Compensation Committee: Provides oversight, approves compensation philosophy and material remediation budgets exceeding <Amount> or affecting more than <Percentage> of employees.
Chief Human Resources Officer: Accountable executive for policy implementation and compliance assurance.
Total Rewards (Compensation): Owns methodology, runs pay equity analyses, designs structures, recommends remediation, and manages documentation.
People Analytics/HRIS: Curates data, ensures data quality, executes analytics in partnership with Total Rewards and Legal.
Legal/Compliance: Advises on legal requirements, privilege strategy, and records retention; reviews and approves methodologies and reports.
Finance: Validates remediation budgets and accruals; monitors financial impacts.
Business HR: Partners with managers on remediation and process adherence; supports change management and training.
Line Managers: Apply pay practices consistently; participate in remediation approvals as authorized.
Internal Audit: Periodically reviews process effectiveness and control design.

Decision Rights and Approvals

Remediation increases up to <Amount> per employee require approval by <Total Rewards Leader> and <Business HR>.
Aggregate remediation per function exceeding <Amount> or <Percentage> of payroll requires <CHRO> and <Finance> approval.
Methodology or threshold changes require <Legal Counsel> and <Compensation Committee> review where material.

Pay Equity Methodology

Analytical Framework

Cohort-Based Comparison: Compare employees within properly defined cohorts where work is substantially equal or comparable.
Statistical Controls: Use regression-based techniques to control for legitimate pay factors.
Thresholds and Materiality: Identify statistically significant or practically meaningful gaps requiring action.
Documentation and Repeatability: Methods must be codified and repeatable to allow year-over-year trend analysis.

Job Architecture and Comparator Groups

Use <Company Name> job architecture to define comparable work:
- Job Family
- Job Function
- Job Level/Grade
- Career Stream (e.g., IC vs. Manager)
- Location or Pay Zone
Primary cohorting rule: Employees with the same job function and level within the same pay zone. Secondary rule: Combine small cohorts across adjacent tiers if roles are substantially similar and job evaluation confirms comparability.
Where job content varies by business unit, validate with job evaluation points or factor comparison to ensure comparability.

Legitimate Pay Factors

Time in role and company tenure
Individual performance ratings over <Number> periods
Relevant experience and education
Critical skills or certifications
Geographic differentials
Shift or schedule differentials
Market premium for scarce skills approved by <Total Rewards>
Internal equity considerations based on compa-ratio within range

Any factor used must be job-related, documented, consistently applied, and compliant with local law.

Data Collection and Data Quality

Data as of Snapshot Date: <Date>
Data sources: HRIS (<Vendor Name>), Payroll (<Vendor Name>), Performance Management (<Vendor Name>), Market Data (<Vendor Name>)
Quality checks:
- Missing or null values for key fields
- Outlier detection for pay and tenure
- Consistency of job codes, grades, and locations
- Validation of protected characteristic data availability and legal restrictions on collection/use

Sample Data Dictionary (Illustrative)

Field	Description	Source	Example Values	Required
Employee ID	Unique identifier	HRIS	E12345	Yes
Legal Entity	Employing entity	HRIS	<Legal Entity Name>	Yes
Job Code	Internal job identifier	HRIS	ENG-III	Yes
Job Family / Function	Job family and function	HRIS	Engineering / Software	Yes
Grade/Level	Global level or band	HRIS	L5	Yes
Location / Pay Zone	Geography or zone	HRIS	<City>, <Country> / Zone B	Yes
FLSA/Status	Exempt/non-exempt or equivalent	HRIS	Exempt	Yes
Gender	Self-identified or government data per law	HRIS	F; M; X; Unspecified	Where permitted
Base Pay	Annualized base	Payroll	<Amount>	Yes
Hourly Rate	For non-exempt roles	Payroll	<Amount>/hour	If applicable
Non-Discretionary Bonus	Last 12 months	Payroll	<Amount>	If applicable
Equity Value	Annualized grant value	Equity System	<Amount>	If in scope
Tenure (Company/Role)	Years	HRIS	3.4	Yes
Performance Rating	Most recent and prior cycles	Talent System	Exceeds; Meets; Partially Meets	If applicable
Education/Certification	Relevant to role	HRIS	BS; MS; CPA; PMP	If applicable
Market Reference	Range midpoint	Market Data	<Amount>	Yes

Analytical Techniques

Descriptive Statistics: Median pay, mean pay, and compa-ratio comparisons by gender within each cohort.
Regression Analysis: Ordinary least squares or quantile regression with base pay (or log base pay) as dependent variable and legitimate factors as independent variables. Include protected characteristic indicator(s) as explanatory variables to test for residual gap after controls.
Significance and Practical Thresholds:
- Statistical significance: p-value ≤ 0.05 indicates potential disparity.
- Practical significance: residual gap magnitude ≥ <Percentage> (e.g., 3% to 5%) or beyond ±2 standard deviations triggers review.
Small Cohorts: For cohorts with fewer than <Number> employees, apply non-parametric comparisons (e.g., median ratio), supplement with qualitative review, and aggregate across comparable cohorts if justified.

Example Threshold Policy (Illustrative)

Metric	Threshold	Action
Residual gap (gender coefficient) significant and ≥ <Percentage>	p ≤ 0.05 and ≥ 5%	Immediate remediation plan required
Residual gap significant but 2% to 5%	p ≤ 0.05 and 2%–5%	Targeted review and potential partial remediation; monitor next cycle
Non-significant but practical gap ≥ <Percentage>	p > 0.05 and ≥ 5%	Managerial justification review; correct if unjustified
Small cohort with median compa-ratio difference ≥ <Percentage>	N < <Number> and ≥ 5%	Qualitative review and corrective action if warranted

Documentation and Legal Privilege Strategy

Consult <Legal Counsel> to determine whether analyses should be conducted under attorney-client privilege, where permitted by law.
Maintain separate privileged work product and non-privileged summary reports intended for business action.
Retain methodology, data snapshots, code, and decision logs per Records Retention Schedule: <Number> years or as required by <Country> law.

Salary Structure and Pay Policy Alignment

Pay Structure Design Principles

Market-referenced salary ranges with midpoint differentials of <Percentage> (e.g., 8% to 12%) between adjacent grades.
Range spreads by grade:
- Entry-level: 30% to 40%
- Mid-level: 40% to 50%
- Senior/Executive: 50% to 60%+
Geographic differentials defined by pay zones and cost-of-labor indices.
Position-in-range guidance:
- New hires: 85% to 95% of midpoint unless premium skills
- Fully proficient: around midpoint
- High-scarcity or critical skills: up to maximum with <Total Rewards> approval

Pay Decision Controls

Offer approvals required above <Percentage> of range midpoint or beyond maximum.
Promotions target <Percentage> to <Percentage> increase, aligned to new range, with internal equity review.
Off-cycle adjustments must include equal pay justification checklist and HR approval.

Annual Compliance Cycle

Timeline and Deliverables

Define scope, snapshot date, and jurisdictions; confirm privilege strategy with <Legal Counsel>.
Extract and validate data; complete data quality checks and sign-off by HRIS and People Analytics.
Confirm cohort definitions; validate comparability with Total Rewards and business leaders.
Run descriptive and regression analyses; document code, models, and assumptions.
Review findings in Privileged Review Session; identify material gaps and root causes.
Draft remediation proposals with cost impact and prioritization; validate with Finance.
Approve remediation plan per governance thresholds; secure budget and timing.
Execute pay adjustments; update payroll and HRIS; notify managers.
Train managers and HR on preventive controls and consistent pay decision-making.
Publish required external/internal disclosures; conduct post-remediation validation.
Archive documentation; update lessons learned; plan for next cycle.

Cadence

Comprehensive analysis: Annually, aligned to <Month> compensation cycle.
Mid-year pulse checks: Semi-annual descriptive reviews for high-risk functions or geographies.
Post-M&A reviews: Within <Number> days post-close for integrated populations.

Remediation Strategy and Budgeting

Prioritization Principles

Address statistically significant and practically meaningful gaps first.
Prioritize cohorts with legal exposure, larger populations, and higher pay variance.
Balance immediate pay changes with structural fixes (range realignment, job leveling, and policy change).

Remediation Types

Individual Adjustments: Increase pay for underpaid employees to bring within acceptable variance or compa-ratio target (e.g., 95% to 105%).
Structural Adjustments: Modify salary ranges, geographic differentials, or job levels to eliminate systemic skew.
Process Controls: Tighten offer approvals, promotion guidelines, and market premium governance.

Budget Guidelines (Illustrative)

Category	Guideline	Approval
Immediate corrections	Up to <Percentage> of annual base payroll or <Amount> cap	Total Rewards + Finance
Structural range moves	Midpoints increased by <Percentage> with staged cost over <Number> months	CHRO + Finance
Manager training and enablement	<Amount> program budget per year	HR + L&D

Execution Controls

Changes effective on <Date> to align with payroll cycles.
Retroactivity only where legally required or approved by <Legal Counsel>.
Communication to impacted employees must avoid implying a legal violation; use neutral language focused on pay alignment with market and internal equity.

Data Privacy, Security, and Ethics

Privacy and Consent

Use protected characteristic data only where lawful and necessary. Where direct data is unavailable, do not infer protected status unless legally permitted and advised by <Legal Counsel>.
Provide privacy notices per <Country> law, including purposes of processing and retention periods.

Security Controls

Access limited to need-to-know roles; use role-based access control in <Analytics Platform>.
Store analysis files in encrypted repositories; prohibit local storage of raw extracts.
Data retention: Keep snapshots and outputs for <Number> years or per legal hold.

Documentation and Recordkeeping

Required Artifacts

Methodology document and model specification
Data dictionary and snapshot inventory
Analysis code and outputs (privileged where applicable)
Findings summary and remediation plan
Approval records and budget authorizations
Communications to managers and employees
Post-remediation validation results

Records Retention Schedule

Equal Pay analyses and supporting records retained for at least <Number> years or the statutory minimum in <Country>, whichever is longer.
Disposal requires approval from <Legal Counsel> and <Records Management>.

Audits, Monitoring, and Risk Management

Key Risk Indicators (Illustrative)

Percentage of cohorts with gender residual gap ≥ <Percentage>
Percentage of offers above range maximum
Promotion pay changes by gender and function variance ≥ <Percentage>
High-risk roles with market premiums outside policy
Time to remediate identified gaps

Internal Audit Program

Annual audit of methodology adherence and data controls.
Sample-based verification of pay decisions against policy.
Management action plans tracked to closure with quarterly status reports.

Escalation and Issue Management

Material findings escalated within <Number> business days to CHRO and Legal.
Breaches of policy or retaliation concerns escalated immediately via <Hotline>.

Training and Change Management

Audience and Curriculum

Line Managers: Pay fundamentals, range use, equity principles, and prohibited practices.
Recruiters: Offer construction, salary history bans, and pay transparency obligations.
HR Business Partners: Job leveling, market pricing, and remediation procedures.
Executives: Oversight responsibilities and risk appetite.

Delivery and Completion Tracking

Mandatory e-learning modules with annual refreshers.
Workshop sessions for high-impact functions.
Completion tracked in <Learning System> with a target completion rate of <Percentage>.

Review and Approval Process

Governance Cycle

Draft updates led by Total Rewards by <Month> each year based on lessons learned and regulatory changes.
Legal review to validate compliance and privilege strategy.
Finance review for budget implications.
Works council or labor consultation where applicable.
Executive approvals by CHRO and General Counsel.
Board/Compensation Committee ratification if material changes to methodology or budget thresholds.
Publication to HR Policy Repository and manager enablement materials updated.

Effective Date and Version Control

This version becomes effective on <Effective Date> and supersedes all prior versions.
Version numbering conventions: Major.Minor (e.g., v2.1); minor updates do not change methodology, major updates do.

Appendices

Appendix A: Equal Pay Justification Checklist (For Manager Use)

Is the pay differential explained by a documented, job-related factor (e.g., performance, tenure, skills) permitted by law?
Is the factor applied consistently across comparable employees?
Is there supporting documentation in the HRIS or performance system?
Does the proposed action align with salary range guidance and internal equity?
Has Legal or Total Rewards reviewed the justification where required?

Appendix B: Sample Manager Talking Points (Internal Use Only)

Focus on alignment with market and internal equity policies.
Avoid references to law or “violation.” Use neutral language such as “alignment adjustment.”
Do not disclose comparative pay of peers; maintain confidentiality.
Reinforce our commitment to fair pay and consistent pay practices.

Appendix C: Illustrative Remediation Prioritization Matrix

Cohort	Gap Size	Significance	Risk Level	Recommended Action
Engineering L4, Zone A	6%	Significant	High	Immediate adjustment and range review
Sales L3, Zone B	3%	Significant	Medium	Targeted adjustments; monitor
Operations L2, Zone C	4%	Not significant	Low	Justification review; training

Glossary of Terms and Definitions

Compa-Ratio: Employee salary divided by the range midpoint, expressed as a percentage.
Cohort: Group of employees compared for pay equity based on comparable work.
Comparable Work: Roles requiring similar skill, effort, and responsibility under similar conditions.
Controlled Gap: Pay difference after accounting for legitimate factors via statistical controls.
Equal Pay Act: Statute requiring equal pay for equal work by sex; varies by <Country/State>.
Geographic Differential: Pay adjustment reflecting cost-of-labor differences across locations.
Market Premium: Additional pay for scarce skills, approved per policy.
Merit System: Structured system awarding pay based on performance criteria.
Pay Band/Range: Minimum, midpoint, and maximum pay for a grade.
Pay Transparency: Laws or policies requiring disclosure of pay ranges and banning pay secrecy.
Privileged Analysis: Work conducted at the direction of counsel to preserve legal privilege.
Range Spread: Percentage difference between minimum and maximum of a pay range.
Residual Gap: Portion of pay difference not explained by legitimate factors in a model.
Salary History Ban: Law prohibiting reliance on a candidate’s prior pay.
Statistical Significance: Likelihood that an observed effect is not due to chance, typically p ≤ 0.05.

Communication Section: Message to Employees and Managers

Our Commitment to Fair and Equitable Pay

At <Company Name>, we believe people should be rewarded fairly for the work they do. That means paying employees performing substantially similar work equitably, regardless of gender or any other protected characteristic. We regularly review our pay practices to ensure decisions are consistent, job-related, and aligned with our compensation philosophy.

What You Can Expect

Each year, we conduct a structured review of our compensation. We look at how roles are leveled, how salaries align to market ranges, and whether pay differences can be explained by legitimate factors such as experience, performance, and location. When our review identifies pay that is out of alignment, we make adjustments. These adjustments are focused on fairness and are part of our ongoing commitment to equitable pay.

You might see one or more of the following:

Alignment adjustments during annual compensation reviews
Updates to salary ranges to reflect market data
Guidance to managers to make consistent, data-driven pay decisions

These actions do not imply any wrongdoing. They reflect our commitment to continually improve and to keep our pay practices fair and competitive.

How Pay Decisions Are Made

Your pay is guided by the salary range for your role and level, your experience and performance, and the location where you work. We use market data to set ranges and provide managers with clear guidelines. When making offers, promotions, or adjustments, managers follow these guidelines and consult with HR to support consistency and fairness.

Your Role in the Process

You can help by keeping your HR profile up to date with your location, education, and relevant certifications. You are encouraged to talk with your manager about your role, responsibilities, and how your pay fits within the salary range for your position. If you have questions about your pay, please speak with your manager or HR Business Partner. In many locations, you also have the right to discuss your pay with coworkers. We ask that all conversations remain respectful and compliant with local laws.

Questions and Support

If you have questions about how we set pay ranges, how alignment adjustments work, or how your compensation is determined, please reach out to:

Your Manager
Your HR Business Partner
The Total Rewards team at <Contact Email>

We appreciate your continued contributions and your partnership in maintaining a fair and inclusive workplace.

Document Information:

Document Type: Equal Pay Act Compliance Documentation
Category: Compliance & Governance
Generated: August 28, 2025
Status: Sample Template
Next Review: <Insert Review Date>

Usage Instructions:

Replace all text in angle brackets < > with your company-specific information
Review all sections for applicability to your organization
Customize content to reflect your company's policies and local regulations
Have legal and HR leadership review before implementation
Update document header with your company's version control information
At bottom of the document you find a short example on how the content could be communicated to end-users, for instance employees.

This sample document is provided for reference only and should be customized to meet your organization's specific needs and local legal requirements.