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EEOC PROPOSES NEW DEADLINE FOR EEO-1, COMPONENT 2-PAY DATA

EEOC

When the EEOC’s online reporting portal opened on March 18, it was still unclear whether the new reporting requirements would be included for the 2018 report and if so, when this data would be due.

As a reminder, the new reporting requirements center around submitting information about employee pay data so that trends concerning gender pay inequity can be spotted and addressed. As most employers should be aware, this has become a hot topic in employment law (gender pay equity issues) and many laws are either being proposed or passed to address this concern:  The House recently passed the Paycheck Fairness Act, numerous states have enacted equal pay and salary history laws, and the EEOC has included pay equity as a strategic enforcement priority since 2013.

What the EEOC proposed on April 3rd is that employers have until September 30, 2019, to submit employee pay data as part of their annual 2018 EEO-1 report (otherwise known as Component 2 of the EEO-1 report).  The US District Court still needs to “bless” this with a court order, but it is looking as though the dates that employers should be aware for the 2018 EEO-1 report are as follows:

The deadline for Component 1 of the EEO-1 report remains May 31, 2019.

The proposed deadline for Component 2 of the EEO-1 report is September 30, 2019 (pending court approval).

The guest editor for 4/11/19 blog:  Spognardi Baiocchi LLP, Legal Advisors; www.psb-attorneys.com.

WageWatch offers accurate, up-to-date HR metrics, benefit survey data, market compensation data and salary reports that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. The PeerMark™ Wage Survey is the only Web-based custom survey tool that allows individual survey participants to select their competitive set for comparison purposes.  Our experienced compensation consultants can assist with your organization’s compensation needs.  We can help you ensure internal equity and compliance with regulations as well as help you structure your compensation programs to support your company’s business strategy and objectives.   For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

Posted in Regulatory & Legal Updates on April 10th, 2019 · Comments Off on EEOC PROPOSES NEW DEADLINE FOR EEO-1, COMPONENT 2-PAY DATA

PAY COMPRESSION: CAUSES AND SOLUTIONS

Pay Compress-B

Pay compression is when either a subordinate’s base pay is very close to or more than their supervisor’s or when a less tenured employee is equal to or paid more than a senior employee in the same position.  One of the most common causes of pay compression is when pay increases for current employees are low, but new employees are paid a higher salary to attract them.  This problem becomes more severe in economic downturns when pay increases are limited but it occurs even in better economic times.  Pay compression is most evident in pay systems where lower level jobs, either through union contracts or other market forces, create a situation where first-line supervisors are paid less, on an hourly basis, than their subordinates.

When the job market is weak, many organizations hire people who had already done the same work for another organization, eliminating the need for training.  Rather than hiring people with high potential and developing them for the long term, they have opted for people who can “hit the ground running,” regardless of their potential.

When salary compression and the policies that enable it are sustained over several years, it can be demoralizing and lead to widespread employee dissatisfaction.  Employers should be concerned because salary compression can transform compensation from a motivator into a de-motivator.

Salary compression may be accompanied by pay inequities which could violate equal pay regulations.  In situations where newer staff earn more than experienced staff, it could create a pay equity problem if the experienced staff are a protected class.

There are steps that can limit the detrimental effects of salary compression.  For instance, when a new job opens, organizations should try to promote someone from within, rather than hiring from the outside.  Many organizations have policies that limit how high within a range, new hires can be paid.  When new hires are brought in at higher salaries or when across the board increases are given due to market movement or minimum wage increase, have a policy that requires internal equity analysis and adjustments.

Institute a policy of transparency and calibration across units.  Disparate actions between different organizational units can create salary compression and other inequities.  Transparency can take the form of a simple scorecard showing the rates of increases and promotions in each unit.  Calibration can involve managers sharing planned compensation actions with their peer managers.  It can also include several levels of approval for any actions before they take place so that a senior leader can spot any actions that appear suspect and will cause inequities, including compression.  This tends to create a norm and, over time, leads to decisions that are more consistent and responsible.

Salary compression can be a serious problem that eventually causes an organization to lose some of its most talented employees.  Although many organizations have unintentionally allowed salary compression to take root, there are actions they can take now and in the future to keep it from reoccurring.

At WageWatch our compensation consultants are focused on your organization’s compensation needs and ready to help you ensure that your compensation programs are supporting your company’s business strategy and objectives.  WageWatch also offers accurate, up-to-date benefit surveys, salary surveys and pay practices data that will allow you to stay current with the times.  This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards.  For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

MOTIVATING EMPLOYEES THROUGH JOB DESIGN

Job Design-B

With changing demographics and a more competitive job market, human resources are more challenged than ever before to hire, engage, maintain and keep employees happy and motivated.  Workers want more choice and flexibility in how they approach tasks.  They look for more opportunities to change duties, for exploration, to learn and to advance in their career in a less linear way.  It is not only desirable but essential for businesses to have motivated employees.  Today many human resource professionals are looking at how to design jobs, work environments, and cultures that motivate employees.

Job design is a deliberate attempt to structure the tasks and social relationships of a job to create optimal levels of variety, responsibility, autonomy, and interaction.  The primary objective of job design is to ensure a fit between the job and its performer so that the job is performed well and the job performer gains satisfaction from doing it.

There are multiple strategies for job design:

Job rotation involves moving employees from job to job at regular intervals. When employees periodically move to different jobs, the monotonous aspects of job specialization can be relieved.

Job enlargement consists of making a job larger in scope by combining additional task activities into each job through expansion.  It focuses on enlarging jobs by increasing tasks and responsibilities.

Job enrichment is focused on designing jobs that include a greater variety of work content, a higher level of knowledge and skill, provide the worker more autonomy and responsibility, and provide an opportunity for personal growth.

Research shows that there are five job components that increase the motivating potential of a job: skill variety, task identity, task significance, autonomy, and feedback.

  • Skills
    • People will be more motivated if they are using a variety of skills in their positions, rather than one thing repeatedly.
  • Task Identity
    • Employees are motivated to complete tasks if they identify with them and have seen them through from start to finish.
  • Task Significance
    • When employees feel that their work is significant to their organization, they are motivated to do well.
  • Autonomy
    • Employees like to be able to make decisions and have flexibility in their roles. Most employees will have lowered motivation if they feel they have no freedom or are being micromanaged.
  • Feedback
    • Employees need feedback (both positive and negative) in order to stay motivated.

Quality of life in a total job and work environment is also an important part of a positive and motivating experience for employees.  The elements included in ‘quality of life’ include open communication equitable reward system, employees’ job security, and satisfaction, participative management, development of employee skill, etc.  Since a significant amount of one’s life is spent at work, jobs need to provide satisfaction for sustained interest.  Jobs provide employees not only a living but also help in achieving other goals such as economic, social, political and cultural.

The concept of empowerment extends the idea of autonomy.  The idea behind empowerment is that employees have the ability to make decisions and perform their jobs effectively.  Instead of dictating roles, companies create an environment where employees thrive, feel motivated, and have the discretion to make decisions about the content and context of their jobs.  Empowerment is a contemporary way of motivating employees through job design.

A growing body of research on the relational structures of jobs suggests that interpersonal relationships play a key role in making the work experience important and meaningful to employees.  Interpersonal relationships can often enhance employees’ motivations, opportunities, and resources at work.

Though employees need to have some intrinsic motivation (internal motivation) to complete the tasks assigned to them in their roles, they also need to be motivated by their employers. By designing jobs that encompass all of the core characteristics, you can help increase employee motivation, in turn improving performance.

WageWatch offers accurate, up-to-date benefit survey data, market compensation data. and salary reports that will allow you to stay current. This information is beneficial in creating the best salary, incentive, and benefit packages that meet or rival industry standards.  The PeerMark™ Wage Survey allows individual survey participants to select their competitive set for comparison purposes.  Our experienced compensation consultants can assist with your organization’s compensation needs.  We can help you ensure internal equity and compliance with regulations as well as help you structure your compensation programs to support your company’s business strategy and objectives.   For more information on our services, including consulting, salary survey data, benefit survey data, and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

MINIMUM WAGE UPDATE – JANUARY 2019

The current federal minimum wage, under the Fair Labor Standards Act (FLSA), is $7.25 per hour which has been in effect since July 2009.  States have the ability to set a rate that is higher than the federal minimum rate and employers are obligated to pay the higher rate.  Currently, there are 29 states that have laws at the state or local level mandating higher pay than the federal rate.

On September 4, 2018, the Department of Labor published a Notice in the Federal Register to announce that, beginning January 1, 2019, the Executive Order 13658 minimum wage rate is increased to $10.60 per hour.  This Executive Order minimum wage rate generally must be paid to workers performing work on or in connection with covered contracts.  Additionally, beginning January 1, 2019, tipped employees performing work on or in connection with covered contracts generally must be paid a minimum cash wage of $7.40 per hour.

Voters across many states approved ballot measures to raise their state minimum rates over time, with increases occurring through 2020 and beyond.  There are 19 states which have an increase that takes effect on December 31, 2018 or January 1, 2019, including:  1) Alaska, 2) Arizona, 3) Arkansas, 4) California, 5) Colorado, 6) Delaware, 7) Florida, 8) Maine, 9) Massachusetts, 10) Minnesota, 11) Missouri, 12) Montana, 13) New Jersey, 14) New York, 15) Ohio, 16) Rhode Island, 17) South Dakota, 18) Vermont, 19) Washington.

For more details, click on the following link to view the WageWatch Minimum Wage Chart with details of federal, state and local minimum wage increases:  WageWatch – U.S. Minimum Wage Increases.  In addition to the statewide minimum wage increase, multiple states have approved minimum wage increases that are higher than the statewide average.  (The increases are referenced in the attached Excel spreadsheet).  There is one state, Oregon, and the District of Columbia that have scheduled their wage increase to begin on July 1, 2019.

Although there are no statewide minimum wage increases, there are several states in which specific cities and/or counties which have wage increases scheduled to occur on 1/1/2019; these states include:  Illinois, Maryland, and New Mexico.

At WageWatch our compensation consultants are focused on your organization’s compensation needs and ready to help you ensure that your compensation programs are supporting your company’s business strategy and objectives. WageWatch offers accurate, up-to-date benefit surveys, salary surveys and pay practices data that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

PLANNING AN OFFICE HOLIDAY PARTY?

Office Party

Hosting a holiday party has been a tradition among many companies as a way to reward employees, boost morale, and encourage team spirit.  This year, fewer employers are planning to host a party.  Based on a recent study, only two-thirds of companies intend to host a holiday party, the lowest percentage since 2009.  Economic factors do not seem to be a reason as companies report tax savings and a thriving economy.

Among companies sponsoring a party, nearly 60 percent have real concerns about sexual harassment and inappropriate behavior, especially in light of the #MeToo movement.  More than half of these companies have addressed the #MeToo issue this year and if not, one-third indicated that they will do so prior to the party.

If you are planning a holiday party, there are some proactive steps that can be taken to lessen your company’s liability:

  • Establish written anti-harassment policies and publish in employee handbooks; reference the policies prior to the holiday party
  • Send a memo to remind employees to act responsibly and professionally (address company’s stance on pictures being posted to social media as well as the dress/attire for the party)
  • Ensure employees understand attendance is voluntary (especially when held outside of normal work hours)
  • The focus for the holiday decorations, music, and gifts should be seasonal in nature and not religious
  • Emphasize to management that they should lead by example
  • Consider having a holiday party in which no alcohol is served
  • Hold the party offsite; it limits the company’s liability
  • Set-up a cash bar—guests will drink less if they are required to pay
  • If alcohol is served, set a tone of moderation. Consider providing a limited number of drink tickets per guest, restrict the types of alcohol served, and/or only serve alcohol for a limited time
  • Consider featuring activities/games at the party, it encourages team-building and diverts attention away from cell-phones (also limits focus on drinking)
  • When alcohol is present, offer non-alcoholic beverages and always serve food
  • Stop serving alcohol toward the end of the evening and switch to coffee, tea, and soft drinks
  • Arrange for alternative transportation; encourage employees and guests to use it if they consume any alcohol

While these tips are not a guarantee against holiday party problems, they can be a good foundation for an effective defense against liability if problems should come to pass.

At WageWatch our compensation consultants are focused on your organization’s compensation needs and ready to help you ensure that your compensation programs are supporting your company’s business strategy and objectives. WageWatch also offers accurate, up-to-date benefit surveys, salary surveys and pay practices data that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

WHAT’S NEXT…JOINT EMPLOYMENT REDEFINED?

Joint EmploymentHave you noticed the flip-flop on Joint Employer Standards from the National Labor Relations Board (NLRB)?  Currently, the standards are in flux.  In 2015, the definition of a joint employer was modified and expanded based on the Browning-Ferris Industries case.  This case changed over 30 years of precedent that had required “direct” and “immediate” control over an employee’s working conditions to “indirect” and “potential” control as the new definition of joint employment.

Under the Browning-Ferris standard, even if two entities never exercised joint control over the essential terms and conditions of employment, and any joint control was not direct and immediate, there could still be joint employers based on: (1) the existence of reserved joint control, (2) indirect control, or (3) control that was limited and routine.  Browning-Ferris was considered controversial and criticized by many employers and business groups.

In December 2017, in an attempt to rein in what was perceived as a broad and vague standard, the NLRB re-established the pre-Browning-Ferris standard in the Hy-Brand Industrial Contractors case which returned the former joint employer test requiring “direct” and “immediate” control.

To the dismay of many in the business community, in February 2018, due to an alleged conflict of interest, the NLRB vacated the Hy-Brand case, leaving Browning-Ferris as the law of the land once again.  Prior to Browning-Ferris, the NLRB relied on decades of legal precedent to set the joint employment standard.

In May 2018, the NLRB announced its intention to clarify the joint employer standard by issuing a new rule to reinstate the pre-Browning-Ferris joint employer standard.  On September 14, 2018, the NLRB published a Notice of Proposed Rulemaking (NPRM) in the Federal Register regarding its joint-employment standard (allowing 60 days for public comments).  The proposed rule reflects a return to the previously longstanding standard that an employer may be found to be a joint-employer when the following condition exists:

    • A joint-employer of another employer’s employees exists only if it possesses AND exercises substantial, direct and immediate control over the essential terms and conditions of employment and has done so in a manner that is not limited and routine. 

 The 60-day period for public comments continues through November 13.  After the NLRB reviews the public comments and replies, it will issue a final rule regarding the joint employer standard.  If issued without substantial changes, this rule will provide employers with a more clear and consistent standard and reduce the likelihood of an employer inadvertently becoming a joint employer.

WageWatch offers accurate, up-to-date HR metrics, benefit survey data, market compensation data and salary reports that will allow you to stay current with the times.  This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards.  The PeerMark™ Wage Survey is the only Web-based custom survey tool that allows individual survey participants to select their competitive set for comparison purposes.  Our experienced compensation consultants can assist with your organization’s compensation needs.  We can help you ensure internal equity and compliance with regulations as well as help you structure your compensation programs to support your company’s business strategy and objectives.   For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

WHAT SHOULD AN EMPLOYER DO WHEN AN OTHERWISE QUALIFIED APPLICANT FAILS A DRUG TEST WHILE USING MARIJUANA FOR MEDICAL PURPOSES?

First and foremost, CHECK STATE LAW!  This remains a troubling issue for employers in states that have enacted medical marijuana laws and/or laws allowing for recreational marijuana laws.  We have written on this perplexing issue in the past focusing on the Colorado Supreme Court’s decision which held that state’s protection of employees who are engaging in “lawful activities” did not shield an employee using state-law protected medical marijuana from termination.

Last week a Connecticut federal court judge issued a decision for employers concerning Connecticut’s Palliative Use of Marijuana Act (PUMA). The federal judge granted summary judgment in the employee’s favor in connection with her PUMA claim.  The court concluded that the Company violated PUMA by rescinding the job offer based on a positive pre-employment drug test because was a “qualifying patient” under Connecticut law.

In so doing, the court rejected the Company’s argument that its zero-tolerance policy complied with the Drug-Free Workplace Act (DFWA), which requires federal contractors to make a “good faith effort” to maintain a drug-free workplace.  The federal judge concluded that the DFWA does not prohibit federal contractors from employing someone who uses medical marijuana outside of the workplace.  The emphasized that PUMA does nothing to limit an employer’s ability to prohibit the use of intoxicating substances during work hours, but it does protect a “qualifying patient” from an adverse employment action for using marijuana “outside of work hours and in the absence of any influence during work hours.”

PLEASE NOTE: this is an area of the law that is not yet settled.  And that there will be different results in each state as state laws on marijuana use vary greatly—-and judicial interpretations of these laws will also greatly vary.  Before proceeding to enforce your drug-testing policy against individuals purportedly using marijuana for medicinal purposes, you are well-advised to review all applicable state laws.  Of course, feel free to contact PSB if you have any questions on this at www.psb-attorneys.com.

Change can be challenging and demanding.  At WageWatch our compensation consultants can assist with your organization’s compensation needs and help ensure your wages and salaries are supporting your company’s business strategy and objectives.  In addition to our PeerMark Salary Survey for over 100 local lodging markets in the U.S. and Canada, we offer a National Benchmark Salary Survey.  With over 9,000 hotels and 200 casinos in our database, WageWatch’s hotel and gaming salary surveys are the most comprehensive surveys available to Human Resource professionals. For more information on our services, including consulting, salary surveys, benefit surveys, and custom compensation reports, please call WageWatch at 888-330-9243 or contact us online.

SALARY STRUCTURES: WHAT ARE THEY GOOD FOR?

Established salary structures aren’t mandatory.  There is no law that requires them, but they serve many useful purposes.  Having salary ranges in place can ensure that salary decisions, from new hires to promotions, are made with objective and consistent rules and parameters.  They provide at least a first line of defense against salary discrimination, intentional or otherwise, by ensuring that employees performing the same job are granted the same salary opportunity.  And, formal salary ranges provide you with a tool for proactively managing and budgeting your salary dollars.

Salary structures help ensure that pay levels for groups of jobs are competitive externally and equitable internally.  A well-designed salary structure allows management to reward performance and skills development and control overall base salary cost by providing a cap on the range paid.

A salary structure enables employers to pay employees in a given position, consistently, for the work they do.  Salary ranges also offer flexibility enabling a company to pay higher in the range for an employee based on a greater level of education, experience or performance.  In the same way, it can potentially save on labor costs when hiring employees with limited backgrounds.

Having well documented and communicated salary ranges can minimize employees’ pay equity concerns and grievances.

A well-designed salary structure will help organizations:

  • Attract and retain suitable, qualified, and experienced employees
  • Build high morale with internal equity
  • Create more satisfied employees and thus reduce turnover
  • Minimize favoritism and bias
  • Provide a structure for career progression
  • Serve as a sound basis for collective bargaining and employee relations management

If the salary structure gets out of sync with the overall labor market, a company may find itself paying employees too much and needlessly increasing operating costs, or paying employees too little and having difficulty attracting and retaining talent.

A study of the current labor market will provide new information to determine whether the organization’s pay structure, policies and practices, job classifications and job titles are appropriate or needing adjustment.

WageWatch offers accurate, up-to-date HR metrics, benefit survey data, market compensation data and salary reports that will allow you to stay current with the times.  This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards.  The PeerMark™ Wage Survey is the only Web-based custom survey tool that allows individual survey participants to select their competitive set for comparison purposes.  Our experienced compensation consultants can assist with your organization’s compensation needs.  We can help you ensure internal equity and compliance with regulations as well as help you structure your compensation programs to support your company’s business strategy and objectives.   For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

ALIGNING COMPENSATION WITH COMPANY CULTURE

Many organizations today are focusing on their company’s culture including determining their culture, deciding what it should be, aligning it with strategic goals, and transitioning to the desired culture.  Culture is important because it reinforces the values of the organization, which in turn shapes team members’ behavior.  There are many success stories of companies with cultures that are aligned to their business goals including Google, Zappos, and Patagonia.  These companies have developed a culture that supports their business as well as their culture.

Organizational culture is the collective behavior of the people who are part of the organization and has important effects on the morale and motivation of the organizational members.  It includes the values, norms, systems, beliefs, attitudes, and habits of the organization which impacts the interactions of the employees with each other, and with customers.  Even before you define it, you know it is there and that it has an impact on your business. This is why it is so important to internalize the culture and understanding when company activities are in sync or not in sync with the culture.

Once the company values and desired culture are defined, compensation can support and help drive the values and corporate culture.  It is important that the role of compensation in an organization and the compensation strategy are also defined.  For example, where does the organization want to set pay levels in comparison to the competitive market?  Perhaps the organization’s culture is strong in training and developing its employees, acknowledging their successes and offering advancement opportunities. This, in turn, may allow the organization to set lower pay levels than what is paid in the market.  Of course, when recruiting it is important to align the compensation strategy to support the values of the culture through highlighting performance management, performance appraisals, and the goal-setting process for each team member.

Once values, business objectives, and desired behaviors are determined then compensation plans can be put in place to support the culture.  For example, if the business objective is innovation and the desired behavior is risk-taking, then short-term incentives may be the compensation strategy.  If the goal is for a highly trained workforce and the behavior is learning and upgrading skills, then skill or competency-based pay may be the compensation strategy.

Corporate culture is about people’s behaviors – how goals are accomplished – so as to establish a culture that drives company success, organizations should link a significant component of their compensation systems to behaviors.

At WageWatch our compensation consultants can assist with your organization’s compensation needs and help you ensure that your compensation programs are supporting your company’s business strategy and objectives.  WageWatch also offers accurate, up-to-date benefit survey data, market compensation data and salary reports that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

 

 

ADVANCED COMPENSATION ANALYSIS

In order to stay in line with industry trends and economic ups and downs, salary ranges should be compared to market each year.  Adjustments to salary ranges may not be needed every year.  Depending upon how fast or how slow the market is moving, adjustments normally are needed every two to three years.  During your annual salary range review relative to the market analysis process, make notes and keep a record of any changes or movement that you see with jobs and departments from year to year.  It is prudent to avoid making changes to your salary ranges for temporary fluctuations or anomalies.  Look for trends that are long-lasting.

In addition to an external compensation analysis to market, an analysis should be performed to identify internal pay inequities that could potentially become the focus of an OFCCP audit.  Pay inequities should include women statistically paid less than men and/or minorities statistically paid less than non-minorities.  Records should consistently be kept regarding all pay decisions to determine whether there are legitimate business reasons to support the pay patterns that exist in those areas. The results of this analysis will not necessarily be used to adjust individual employee compensation.  Rather, the analysis results should be used to target areas where suspicious statistical pay patterns exist.

Since the purpose of the analysis is to anticipate areas potentially of concern to OFCCP, start the analysis with the salary grades or levels as these are most often used as the units of analysis by the OFCCP.  You will need to determine which unit or units of analysis most appropriately reflect how compensation is administered.  The objective is to find potential problem areas by targeting employees who would reasonably be expected to be paid on the same basis due to factors such as job grade, market location, and business unit.

Though the OFCCP will typically use median to perform analysis and determine pay inequities within pay grades or other units.  A thorough compensation analysis should include:

  1. Median and mean analyses (to identify areas of OFCCP concern):  In each pay grade compare the median and the mean of women and men and of minorities and non-minorities.
  2. t-Test analysis:  This test will determine whether the observed differences in pay within the grade levels are statistically significant.  Results of the t-statistic (t-Stat) in the t-Test are considered to be statistically significant if they are 2.00 or greater, representing differences of two or more standard deviations.
  3. Regression analysis:  Any unit in which the differences in pay are statistically significant, a regression analysis should be performed.  Factors that influence grade levels such as time in service, time in the level, time in the job, department, education, and performance can be incorporated into the regression.
  4. Cohort analysis:  Perform this analysis where it has been determined that the differentials are statistically significant, and where the regression analysis has not accounted for the differentials.  A primary cohort analysis would normally be completed on job titles within grades, across department designations and within departmental designations.  Each of the various job titles within the database would be sorted by grade, job title, and base salary from highest to lowest.
  5. Outlier report:  The average salary of a protected class of employees is compared to the average salary of the non-protected group within a salary grade and/or job title.  When a protected employees’ average salary falls below a set percentage of the non-protected, this should be flagged for further review.  This analysis identifies protected employees who are at the lower extremes of the salary range.

At WageWatch our experienced compensation consultants can assist with your organization’s compensation needs.  We can help you ensure internal equity and compliance with regulations as well as help you structure your compensation programs to support your company’s business strategy and objectives.  WageWatch also offers accurate, up-to-date benefit survey data, market compensation data and salary reports that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards.  For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.