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PAY EQUITY ANALYSIS REPORT
Engineering Department (50 Employees)

OVERALL COMPENSATION STATISTICS

Total Employees: 50
Salary Range: $77,000 - $300,000
Mean Salary: $169,400
Median Salary: $169,000

GENDER DISTRIBUTION

Female: 14 employees | Mean: $150,286 | Median: $152,500
Male: 36 employees | Mean: $176,833 | Median: $175,000

Overall Gender Pay Gap: 15.0% (unadjusted)

DETAILED ANALYSIS BY ROLE

SOFTWARE ENGINEER I

Sample Size: 8 employees
Salary Range: $77,000 - $114,000
Mean: $93,250 | Median: $92,500
Standard Deviation: $11,973
Coefficient of Variation: 12.8%
Salary Spread: 40.0%

Gender Breakdown:
Female: 3 employees | Mean: $84,667 | Median: $83,000
Male: 5 employees | Mean: $98,400 | Median: $93,000

Gender Pay Gap: 14.0% ($13,733)
T-test p-value: 0.1208 (not statistically significant)
⚠️ COMPLIANCE CONCERN: HIGH RISK

SOFTWARE ENGINEER II

Sample Size: 12 employees
Salary Range: $121,000 - $162,000
Mean: $141,250 | Median: $143,000
Standard Deviation: $14,722
Coefficient of Variation: 10.4%
Salary Spread: 28.7%

Gender Breakdown:
Female: 6 employees | Mean: $145,833 | Median: $148,500
Male: 6 employees | Mean: $136,667 | Median: $133,500

Gender Pay Gap: -6.7% ($-9,167)
T-test p-value: 0.3024 (not statistically significant)

SENIOR SOFTWARE ENGINEER

Sample Size: 15 employees
Salary Range: $125,000 - $225,000
Mean: $180,867 | Median: $178,000
Standard Deviation: $26,300
Coefficient of Variation: 14.5%
Salary Spread: 56.2%

⚠️ OUTLIERS DETECTED: 1
• Employee 1028 (Male, 1.4y): $125,000 (UNDERPAID by $53,000, 29.8%)

Gender Breakdown:
Male: 15 employees | Mean: $180,867 | Median: $178,000

STAFF ENGINEER

Sample Size: 8 employees
Salary Range: $189,000 - $300,000
Mean: $245,250 | Median: $245,500
Standard Deviation: $43,555
Coefficient of Variation: 17.8%
Salary Spread: 45.2%

Gender Breakdown:
Female: 3 employees | Mean: $210,000 | Median: $200,000
Male: 5 employees | Mean: $266,400 | Median: $274,000

Gender Pay Gap: 21.2% ($56,400)
T-test p-value: 0.0690 (not statistically significant)
⚠️ COMPLIANCE CONCERN: HIGH RISK

ENGINEERING MANAGER

Sample Size: 7 employees
Salary Range: $169,000 - $243,000
Mean: $193,429 | Median: $196,000
Standard Deviation: $26,095
Coefficient of Variation: 13.5%
Salary Spread: 37.8%

⚠️ OUTLIERS DETECTED: 1
• Employee 1047 (Male, 2.6y): $243,000 (OVERPAID by $47,000, 24.0%)

Gender Breakdown:
Female: 2 employees | Mean: $172,500 | Median: $172,500
Male: 5 employees | Mean: $201,800 | Median: $197,000

Gender Pay Gap: 14.5% ($29,300)
T-test p-value: 0.2030 (not statistically significant)
⚠️ COMPLIANCE CONCERN: HIGH RISK

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RISK ASSESSMENT

Overall Compliance Risk: HIGH
Total Concerns Identified: 5
• High-risk gender gaps: 3
• Medium-risk gender gaps: 0
• Significant outliers: 2

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EXECUTIVE SUMMARY

FINDINGS:

• Overall Risk Level: HIGH
• Compliance Status: LIKELY TO FAIL AUDIT
• Total Concerns: 5 (3 high-risk gender gaps, 2 significant outliers)
• Overall Gender Pay Gap: 15.0% (unadjusted)

TOP 3 PRIORITY ACTIONS:

1. IMMEDIATE: Address 21.2% gender gap at Staff Engineer level

   • 3 female Staff Engineers paid average $56,400 less than 5 male peers
   • Estimated remediation cost: $169,200/year

2. HIGH PRIORITY: Investigate 14.0% gender gap at Software Engineer I level

   • 3 female engineers paid average $13,733 less than male peers
   • Estimated remediation cost: $41,199/year

3. HIGH PRIORITY: Address 14.5% gender gap at Engineering Manager level

   • 2 female managers paid average $29,300 less than male managers
   • Estimated remediation cost: $58,600/year

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REMEDIATION PLAN

RECOMMENDED SALARY ADJUSTMENTS

Employee Title Current Recommended Adjustment Priority Timeline

1028 Senior Software Engineer $125,000 $178,000 $53,000 HIGH 60 days

TOTAL ANNUAL REMEDIATION COST: $53,000

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COMPLIANCE ASSESSMENT

FEDERAL COMPLIANCE

☐ Equal Pay Act (EPA): NON-COMPLIANT
• Multiple instances of gender-based pay disparities for substantially equal work
• Risk Level: HIGH - company could face EPA violation claims

☐ Title VII (Civil Rights Act): AT RISK
• Statistical evidence of gender-based pay discrimination
• Pattern affects multiple job levels
• Risk Level: HIGH - exposure to EEOC complaints and class action

STATE COMPLIANCE (if applicable)

California SB 1162 (Pay Transparency):
• Required: Pay scales in job postings, annual pay data reporting
• Current gaps would be exposed in mandated reporting

New York State Equal Pay Law:
• Prohibits pay discrimination based on protected characteristics
• Current disparities exceed defensible business justifications

Colorado Equal Pay for Equal Work Act:
• Requires transparency and opportunity for advancement
• Statistical gaps create significant compliance risk

UPCOMING REGULATIONS

• EU Pay Transparency Directive (2026): If expanding to Europe, current
pay practices would require immediate remediation
• Federal contractor pay equity audits: Heightened scrutiny if bidding
for government contracts

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DETAILED COST ANALYSIS

IMMEDIATE REMEDIATION (30 days)

Staff Engineer gender gap remediation: $0/year
Payroll tax burden (estimated 8%): $0/year
Total immediate cost: $0/year

PHASE 2 REMEDIATION (60 days)

Additional gender gap closures: $53,000/year
Payroll tax burden (estimated 8%): $4,240/year
Total Phase 2 cost: $57,240/year

TOTAL REMEDIATION COST

Year 1 base salary adjustments: $53,000
Year 1 with payroll taxes: $57,240
3-year cost (with 3% annual increases): $176,872

COST VS. RISK ANALYSIS

Remediation cost: $57,240/year
Legal exposure if not addressed:
• EPA back pay liability: 2-3 years of gap differential + liquidated damages
Estimated: $212,000 - $318,000
• Title VII damages: Compensatory and punitive damages (uncapped)
• Legal defense costs: $150,000 - $500,000 per case
• Reputational damage: Immeasurable impact on recruiting and retention

RECOMMENDATION: Immediate remediation is far less costly than legal exposure

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IMPLEMENTATION RECOMMENDATIONS

TIMELINE

Days 1-15: Legal review and executive approval
• Share findings with CEO, CFO, CHRO, General Counsel
• Secure budget approval for remediation
• Engage employment law specialist for compliance verification

Days 16-30: Critical adjustments (Staff Engineers)
• Process salary adjustments for 3 female Staff Engineers
• One-on-one conversations with affected employees
• Document legitimate business justifications for any remaining gaps

Days 31-60: Phase 2 adjustments
• Address Software Engineer I and Engineering Manager gaps
• Process adjustments for identified outliers
• Implement formal compensation review process

Days 61-90: Structural improvements
• Establish salary bands for each role
• Create transparent promotion and compensation criteria
• Train managers on pay equity requirements
• Implement annual pay equity audits

COMMUNICATION STRATEGY

For employees receiving adjustments:
“As part of our annual compensation review, we’ve identified that your
salary was below market rate for your role and performance. Effective
[date], your salary will increase to $[amount].”

For broader organization:
• Do NOT announce company-wide initially (creates legal risk)
• After remediation complete, communicate commitment to pay equity
• Share new transparent compensation framework and salary bands

For leadership:
• Full disclosure of findings, costs, and legal risks
• Emphasize proactive remediation vs. reactive litigation defense
• Position as strategic investment in fairness and retention

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ONGOING COMPLIANCE PROGRAM

REQUIRED NEXT STEPS:

1. Establish salary bands by role and level
   • Research external market data for each position
   • Create clear min/mid/max ranges with defined progression

2. Implement annual pay equity audits
   • Repeat this analysis every 12 months
   • Address gaps proactively before they compound

3. Train hiring managers and HR
   • Unconscious bias training
   • Structured negotiation protocols
   • Documentation requirements for pay decisions

4. Create transparent promotion criteria
   • Written expectations for each level
   • Consistent performance evaluation standards
   • Regular calibration sessions across teams

5. Consider third-party audit
   • Engage compensation consultant for external validation
   • Demonstrates good faith effort for legal defense

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CONFIDENTIALITY AND NEXT STEPS

RESTRICT DISTRIBUTION TO:
• Chief Executive Officer
• Chief Financial Officer
• Chief Human Resources Officer
• General Counsel

DO NOT distribute to:
• Department managers (until remediation complete)
• Board members (unless explicitly required)
• External auditors (attorney-client privilege)

IMMEDIATE ACTIONS:

1. Schedule executive review meeting within 48 hours
2. Engage employment law counsel for legal review
3. Secure budget approval for $57,240 remediation
4. Begin Phase 1 adjustments within 30 days

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END OF REPORT