Sample Pay Equity Analysis Remediation Plan

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.

Pay Equity Analysis & Remediation Plan — <Company Name>

Document Type: Pay Equity Analysis & Remediation Plan

Category: Compliance & Governance

Field	Value
Document Owner	Total Rewards
Document Sponsor	CHRO
Version	v<Version Number>
Effective Date	<Date>
Last Reviewed	<Date>
Next Scheduled Review	<Date>
Geographic Coverage	<Country/Region List>
Confidentiality	Internal – Confidential
Approved By	<Name, Title>, <Name, Title>

Purpose and Objectives

Establish a standardized, repeatable methodology for analyzing pay equity across <Company Name>, identifying unexplained pay differences, and executing fair, consistent remediation.
Provide governance and controls to ensure compliance with applicable laws in <Country>, <Country>, and other jurisdictions where <Company Name> operates.
Align pay practices with <Company Name> values, market competitiveness, and our global job architecture.
Reduce legal, financial, and reputational risks associated with pay discrimination or non-compliance.
Implement ongoing prevention measures that stop inequities from re-emerging after remediation.

Policy Statement

<Company Name> commits to providing equal pay for substantially similar work, accounting for job-related factors such as role, level, location, experience, and performance.
No employee’s compensation will be reduced as a result of pay equity remediation.
Pay equity analyses will be conducted at least annually and after material organizational changes (for example, acquisitions, large reorganizations, or major changes to pay structures).
Remediation will be completed promptly upon approval and in accordance with local legal requirements and works council or employee representative obligations where applicable.

Scope and Applicability

In Scope

All regular employees of <Company Name> in <Country/Region List>.
Base pay, and where legally required or materially relevant, total direct compensation (base pay plus short-term incentives).
Pay equity comparisons across legally protected characteristics as defined by applicable law in each jurisdiction, including but not limited to gender/sex, race/ethnicity, and other protected classes in <Country>.
New hire offers, promotions, and off-cycle adjustments, including transition plans for acquired employees.

Out of Scope

Contractors and temporary agency workers.
Long-term incentives except where mandated or where design materially affects total cash equity comparisons and local law permits analysis.
Legacy retention or sign-on awards that are time-limited unless they contribute to ongoing inequities in total cash and local law defines comparison as total compensation.
Jurisdictions where data collection or processing would violate local privacy, labor, or anti-discrimination laws; in such cases, localized alternative methods will be used.

Applicability Notes

Local legal restrictions may require modifications to methodology, groupings, and covariates. Where conflict exists between this plan and local law, the local law shall govern.
Intersectional analyses will be performed where legally permissible and statistically appropriate.

Legal and Regulatory Context

Analyses and remediation will comply with wage equity and anti-discrimination laws in each jurisdiction where <Company Name> operates, including regulator guidance and emerging pay transparency requirements.
Data privacy will comply with GDPR in <EU/EEA>, LGPD in <Country>, CCPA/CPRA in <State>, and other applicable laws.
Statistically rigorous methods will be used to evaluate unexplained pay differences and to document legitimate job-related factors supporting any pay variations.
Legal privilege: Where permissible, <Company Name> may conduct privileged pay equity analyses under the direction of counsel. Documentation will clearly note privileged versus business records.

Roles and Responsibilities

Total Rewards (Owner)

Define methodology, reference market data, and statistical approach.
Lead data collection, validation, analysis, and remediation modeling.
Collaborate with Legal, HRBPs, DEI, Finance, and People Analytics.
Maintain documentation, version control, and audit trail.

Legal and Compliance

Advise on legal frameworks, privilege, and local requirements.
Review methodology, interpretability of results, and remediation plan.
Coordinate with works councils or regulatory bodies where required.

People Analytics / HRIS

Provide secure data extracts and maintain data quality controls.
Implement data obfuscation or minimization where necessary.
Assist with regression, significance testing, and dashboards.

Finance

Support budgeting, forecasting, and accounting for remediation.
Validate financial impact and ROI of prevention measures.

HR Business Partners and Compensation Partners

Provide contextual information on roles, job architecture, and performance measurement.
Support manager education and execution of remediation actions.

DEI and Employee Relations

Advise on intersectional impacts and equity considerations.
Manage employee escalations and feedback loops.

People Leaders

Implement approved adjustments within guidance limits.
Refrain from independent adjustments that conflict with remediation rules.

External Vendors (if engaged)

Provide data security and confidentiality commitments.
Execute agreed scope using <Vendor Name>’s tools, with reproducible outputs for audit.

Methodology Overview

Analysis Frequency and Triggers

Annual enterprise-wide pay equity assessment completed by <Date> each year
Interim analysis after material events (for example, acquisition, large restructure)
Quarterly prevention checks for new hires and promotions
Ad hoc analysis at the direction of Legal or the CHRO

Pay Elements Included

Primary: Base salary or base hourly pay.
Secondary (jurisdiction-dependent): Short-term incentives or target bonus.
Exclusions: Overtime, per diem, unique one-time awards, or allowances unless defined as materially compensatory in a jurisdiction.

Comparator Groups

Comparisons performed within groups of substantially similar work, typically defined by job family, job function, and level within <Company Name> job architecture.
Location will be included as a control or as separate comparator groups depending on local market pricing and legal guidance.
Minimum group size will be set to preserve privacy and statistical validity (for example, minimum of <N> employees per group).

Data Sources and Fields

HRIS: Employee ID, employment status, job family, job function, level, location, FLSA/exemption or local equivalent, full-time/part-time status, hire date, time in level.
Compensation: Base pay, pay frequency, target bonus, most recent bonus paid, merit history, range minimum and maximum, range penetration.
Performance: Most recent rating, potential rating if used, skill ratings if validated.
Market: Market reference midpoint by country, location differential.
Demographics: Legally permitted protected class fields sourced from voluntary self-ID or legally permissible proxies. Use only where lawful and ethics-approved.
Data privacy: Fields are minimized, access is role-based, and analysis uses pseudonymized data wherever possible.

Statistical Approach

Baseline descriptive analysis: Distribution, range position, compa-ratio, and variance by protected category within comparator groups.
Regression modelling: Multiple linear regression on log-transformed base pay to evaluate the effect of protected class membership controlling for job-related factors. Covariates may include level, time in role, experience proxy, performance rating, location, and critical skill indicator.
Significance thresholds: Two-sided tests with alpha at 0.05, with review flags at 0.10 for directional risk. Practical significance thresholds of <Percentage> for pay gaps after controls.
Robustness checks: Influence diagnostics, multicollinearity (VIF), interaction terms as appropriate, clustered standard errors by comparator group, and sensitivity analyses with alternative covariates.
Intersectionality: Analyze combined protected characteristics where permissible (for example, gender by race/ethnicity).
Small samples: Use non-parametric or Bayesian shrinkage methods or aggregate to broader comparator groups when sample size is below <N>.

Interpreting Findings

An unexplained gap is indicated when the protected-class coefficient remains statistically significant and practically meaningful after accounting for relevant covariates.
Priority remediation candidates are determined by effect size, number of impacted employees, and risk rating.
Document job-related explanations if any exist, including unique skills, certifications, or role scope changes, with evidence.

Data Quality Controls

Double-pass validation for job family and level alignment.
Outlier review for pay rates at or beyond range min/max by more than <Percentage>.
Confirm performance ratings distribution, calibration outcomes, and freeze periods.
Audit log maintained with date stamps, dataset hash, and analyst of record.

Governance and Controls

Privilege, Confidentiality, and Retention

Analyses may be conducted under attorney-client privilege where appropriate.
Retention of non-privileged outputs will follow <Company Name> retention policy of <Years> years.
Access to detailed analysis is limited to Legal, Total Rewards, People Analytics, and others approved by the CHRO.

Works Council and Labor Relations

Where applicable, engage works councils or employee representatives in <Country> prior to analysis and remediation.
Provide summaries, not raw data, unless legally required and approved by Legal.

Prevention Controls

Offer approval workflows that flag and correct proposed pay that would undermine equity or cause compression.
Promotion increase guardrails by level (for example, typical range <Percentage> to <Percentage>).
Market-based adjustments restricted to validated market movement evidence.

Remediation Strategy

Principles

Address the largest unexplained gaps first while ensuring fairness across groups.
Do not reduce any employee’s pay as part of remediation.
Emphasize structural fixes to prevent recurrence (for example, range updates, consistent offer practices).
Implement changes swiftly, with transparent governance and audit documentation.

Remediation Decision Framework

Identify individuals within impacted comparator groups where modeled pay gap exceeds <Percentage> after controls and is statistically significant.
Validate individual data, job architecture alignment, and performance inputs.
Determine new pay targets using internal equity anchors (for example, range penetration targets) and external market midpoints.
Prioritize adjustments based on size of shortfall, time in role, and performance signals, applying guardrails to avoid leapfrogging peers.
Decide on one-time immediate adjustments versus phased adjustments across <Number> cycles, balancing budget and urgency.
Obtain approvals from Legal, Finance, and HR leadership as required by thresholds.

Adjustment Mechanics

Individual adjustments:
- Bring pay to at least the defined fairness band (for example, +/- <Percentage> of modeled fair pay).
- Cap single-cycle increases at <Percentage> unless CHRO and Legal approve exceptions.
- Address range minimum violations immediately.
Structural adjustments:
- Update ranges if market has moved more than <Percentage> since last refresh.
- Correct mis-leveled roles and harmonize titles post-acquisition.
Compression management:
- After raising impacted employees, evaluate manager and peer relationships to mitigate compression risks.
- Offer small compression adjustments where warranted, within budget limits.

Budgeting and Financial Impact

Target annual remediation budget of <Percentage> to <Percentage> of base payroll, adjusted for company performance and severity of findings.
Finance to set a reserve of <Amount> for off-cycle remediation and to track actuals versus plan.
Provide scenario modeling at low/medium/high funding levels with estimated risk reduction.
Coordinate with annual merit cycle to leverage planned spend and reduce incremental cost.

Timing and Pay Vehicle

Preferred timing is aligned to the annual compensation cycle to simplify communication and payroll processing.
Off-cycle adjustments may be used for urgent cases or legal risk mitigation.
Document effective dates as <Date> and communicate to affected employees no later than <Date>.

Documentation and Approvals

Case-level file: employee ID, current pay, proposed pay, rationale, approvers, effective date.
Aggregated summary for executives and boards: total spend, number of employees adjusted, average percentage increase, and gap reduction metrics.
Required approvals vary by spend threshold:
- Up to <Amount> per employee: HRBP and Compensation Partner
- <Amount> to <Amount> per employee: Total Rewards Director and Legal
- Above <Amount> or total program spend above <Amount>: CHRO and CFO

Implementation Guidelines

Project Plan and Milestones

Prepare and approve methodology, scope, and timeline by <Date>
Execute data extraction, validation, and privacy checks by <Date>
Run baseline and regression analyses by <Date>
Review findings and draft remediation plan by <Date>
Secure approvals and finalize budget by <Date>
Execute adjustments in payroll by <Date>
Communicate outcomes and manager guidance by <Date>
Conduct post-implementation audit and lessons learned by <Date>

Systems and Tools

HRIS and payroll for data and execution of changes.
People analytics platform or statistical software for modeling.
Secure collaboration tools complying with <Company Name> InfoSec standards.

Manager and HRBP Guidance

Provide clear summaries of the methodology and rules to managers.
Equip HRBPs with scripts and FAQs to address expected questions.
Keep individual-level decisions confidential and on a need-to-know basis.

Change Control

All methodology or threshold changes must be documented, reviewed by Legal, and approved by the CHRO or designee.
Versioning: Increment version with each change and record rationale.

Reporting and Metrics

Key Performance Indicators

Reduction in unexplained pay gaps by <Percentage> or more vs. prior year.
Share of employees within fairness band after remediation.
Percent of offers and promotions passing equity checks pre-approval.
Budget variance versus plan.
Time to implement remediation from approval to payroll.

Reporting Cadence

Quarterly dashboards to CHRO, CFO, and Legal summarizing equity metrics and prevention control effectiveness.
Annual report to the Board or relevant committee with findings, actions, and outlook.
Country-specific reporting as required by local law or works council agreements.

Risk Assessment and Mitigation

Legal risk: Use privileged analyses where appropriate and tailor by jurisdiction. Maintain robust documentation and counsel oversight.
Data privacy risk: Apply data minimization, pseudonymization, and access controls. Avoid unnecessary sensitive data.
Statistical risk: Validate model assumptions and sample sizes; use alternative methods when needed.
Cultural risk: Poor communication can erode trust. Align messaging with values and provide manager training.
Financial risk: Budget constraints can delay remediation. Phase adjustments and prioritize severity.

Vendor Engagement (If Applicable)

Vendor Selection Criteria

Demonstrated expertise in pay equity and compliance in <Country/Region List>.
Strong data security posture and references.
Transparent, auditable statistical methods with reproducible code or detailed methodology documentation.
Service level agreements and clear division of responsibilities.

Vendor Scope of Work

Data ingestion, cleaning, modeling, and result interpretation.
Quality assurance and sensitivity testing.
Findings readout with clear remediation recommendations and cost modeling.

Country and Local Considerations

Local definitions of comparable work vary. Align comparator groups with local statutes in <Country>.
Some jurisdictions limit use of certain data (for example, performance ratings). Use alternate validated measures or separate models.
Transparency obligations, including public reporting, may exist in <Country> and <Country>. Prepare compliant summaries.

Example Analysis Outputs (Illustrative)

Comparator Group	Sample Size	Modeled Unexplained Gap	Significance (p-value)	Priority Score
Engineering L3, <Country>	124	-<Percentage> for <Protected Group>	0.018	High
Sales L2, <Country>	87	-<Percentage> for <Protected Group>	0.064	Medium
Operations L1, <Country>	59	-<Percentage> for <Protected Group>	0.132	Monitor

Remediation Category	Employees Adjusted	Avg Increase	Total Spend	Notes
Immediate adjustments	42	<Percentage>	<Amount>	Range min violations and high-risk groups
Phased adjustments	71	<Percentage>	<Amount>	Two-cycle plan with compression review
Structural fixes	N/A	N/A	<Amount>	Range refresh, title harmonization

Documentation Standards and Audit Trail

Maintain methodology document, data dictionary, and versioned model code or parameter sets.
Keep a change log with dates, approvers, and rationales.
Retain anonymized summary outputs used in decision-making.
Record all exceptions with written Legal approval.

Review and Approval Process

Total Rewards drafts methodology and project plan; Legal and Finance review
CHRO approves scope, thresholds, and budget
People Analytics executes analysis; Legal oversees privilege and compliance
Total Rewards proposes remediation; HRBPs validate context; Finance validates cost
Legal, CHRO, and CFO approve final remediation plan
Payroll implements approved changes; Total Rewards confirms accuracy
Post-implementation review conducted; lessons and control updates captured

Prevention and Sustainment Controls

Offer and Promotion Controls

All offers must include equity checks against peers at the same level and location, plus range position validation.
Promotions require justification aligned to career framework and salary placement guidance.

Pay Structure Maintenance

Annual market review with range updates when movement exceeds <Percentage>.
Location differentials reviewed semi-annually for <Locations>.

Monitoring and Early Warning

Monthly analytics to flag any re-emerging gaps or out-of-guidance increases.
Exception reporting to HR leadership and Legal when thresholds are exceeded.

Training and Enablement

Manager training on pay equity concepts, fair placement in range, and compression management.
HRBP and Compensation Partner enablement with FAQs, scripts, and scenario examples.
Analyst training on statistical methods, privacy practices, and documentation.

Change Log

Version	Date	Description of Change	Author	Approver
v<Version Number>	<Date>	Initial release	<Name>	<Name>
v<Version Number>	<Date>	Updated thresholds and added intersectional analysis	<Name>	<Name>

Glossary (Terms and Definitions)

Comparator Group: A set of roles considered substantially similar for pay comparison, usually aligned to job family, function, and level, and segmented by location as appropriate.
Compa-Ratio: An employee’s base pay divided by the market midpoint or internal range midpoint for the role and location.
Compression: When pay for more experienced or higher-leveled employees is too close to that of less experienced or lower-leveled employees.
Fairness Band: A target pay interval (for example, +/- <Percentage> of modeled fair pay) used to guide remediation and prevent overcorrection.
Intersectionality: The combined effect of multiple protected characteristics on outcomes.
Practical Significance: A threshold at which a difference is meaningful for decision-making, even beyond statistical significance.
Protected Class: Characteristics safeguarded by law (for example, gender/sex, race/ethnicity) that cannot lawfully be used to justify pay differences.
Range Penetration: The position of an employee’s pay within the defined salary range, often expressed as a percentage from minimum to maximum.
Regression Model: A statistical method to estimate the relationship between pay and explanatory variables, isolating the effect of protected class membership.
Statistical Significance: The likelihood that an observed difference is not due to chance, typically measured by a p-value with thresholds like 0.05.

Communication to Employees and Managers

Audience: All employees and people managers at <Company Name>

Purpose: Explain what pay equity means at <Company Name>, what we are doing, and what you can expect.

At <Company Name>, fair pay is a core part of how we live our values. Fair pay means that employees performing substantially similar work are paid equitably, accounting for job-related factors such as role, level, location, experience, and performance. We regularly review our pay to make sure we live up to that commitment.

Each year, we conduct a pay equity analysis to check for unexplained differences in pay. This analysis looks at groups of employees doing similar work, and it considers legitimate factors like level, time in role, and performance. If we find differences that cannot be explained by those factors, we take action to correct them. If your pay is adjusted as part of this process, you will be notified individually.

Your privacy matters. We analyze pay using carefully protected data and in compliance with applicable privacy laws. Only a small group of authorized experts work with this information. We report trends to leaders without sharing personal details unless needed to make an individual pay change.

What you can expect this year:

We will complete our analysis by <Date>.
If we identify a needed change to your pay, adjustments will be effective on <Date> and will be shown on your pay statement.
Managers will receive guidance on how salary ranges work and how to maintain fair pay on their teams.
No one’s pay will be reduced as a result of this process.

What we ask of managers:

Place new hires and promotions thoughtfully within the salary range, considering experience and internal equity.
Use the tools provided to review pay placement before submitting offers or changes.
Partner with HR to discuss any questions about pay or fairness on your team.

For employees, here is how to interpret your pay placement:

Your base pay is set within a salary range for your job and location. People with more experience or sustained performance may be higher in the range.
When you take on greater scope, move locations, or change roles, your salary range may change.
If you have questions about your pay or the range for your role, talk to your manager or HR partner. We are here to help you understand how it works.

We know conversations about pay are important and sometimes sensitive. Our goal is to provide clear information, listen to your feedback, and make fair, timely decisions. If you have concerns, please reach out to your manager, HR partner, or use <Company Name>’s employee support channels.

Thank you for your commitment to our values and for helping us make <Company Name> a place where everyone can do their best work and be rewarded fairly.

Additional Information

Timing of the next review: <Date>
Where to learn more: <Intranet Link or Policy Name>
Who to contact: <HR Contact Email> and <HRBP Name>

Document Information:

Document Type: Pay Equity Analysis & Remediation Plan
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.