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You will use the Excel file titled “Pay Equity Audit.” (BELOW). This file contains employee data in a fictitious manufacturing company that you will use to conduct a pay equity audit, as would typically be done for a small-to-medium size company without enough employees and data to conduct statistical analyses. In the Excel file, you will see two tabs (sheets), one for Active Employees, and one for Job Descriptions. Here is information to help you understand this file:

1. The Active Employee sheet, lists all the full-time employees with their sex, age, race, tenure at the company (years of service), job title, current department, salary, and exempt status (FLSA) of the position. You will be using sex, job title, FLSA status, and salary to do this analysis. You will also find it helpful to refer to their department and length of service.
2. The employees are currently grouped by Department, the nonexempt workers in each department are listed first, followed by the exempt managers/supervisors for that department.
3. The Job Description sheet provides short descriptions of each of the job titles. This may be helpful for deciding which jobs are similar enough to be of “comparable worth.”

What you need to do for this assignment:

1. First conduct a basic “gender pay-gap” analysis, which is the difference between the average compensation of males and females, regardless of position. This is the type of analysis that is typically done at the national level to determine the “pay gap” between men and women. It can be useful for identifying a general trend over time, but it is not the best method to identify potential unlawful disparities between men and women (or any other protected classes).

To do this analysis, you need to average the salaries for all women and average the salaries for all men. Although you do not need to take the job title into consideration, you should calculate the averages separately for nonexempt versus exempt jobs. That is, compare the salaries for women in exempt positions with men in exempt positions, and then compare the two salaries for nonexempt positions. I recommend you “sort” the data file first by FLSA (exempt status) and then by Sex. You can enter the required data in the table below (on the next page).

	Number of employees; exempt status	Average salary; exempt status	Number of employees; Nonexempt	Average salary; Nonexempt
Women
Men
Salary Difference ($ and %)

Based on the data, is there a pay gap between men and women at this company? How much is the pay gap? Is it large enough that you think further investigation and efforts to address the gap are advised and what would that investigation include?

ANSWER:

1. Now conduct a “comparable work” pay equity analysis for the EXEMPT workers only. For this analysis, you will need to:

1. First group jobs that require similar levels of skill, effort, responsibilities, and working conditions (i.e., the criteria under the Equal Pay Act). The job description tab can help you here. Among the exempt positions, you should identify 3 groups of jobs of comparable worth. You may have one or two jobs that do not fit in any group and thus you may decide not to include them in this analysis. You do not need to include nonexempt positions.

Which jobs did you group together?

Which jobs are excluded from this analysis due to having no logical grouping?

ANSWER:

1. Next, within each job group, compare the average salary for women with the average salary for men. Use the table below to report this data, record the average salary (and # of employees) for women and men in each group (per your 3 groups above).

	Group 1 Avg Salary (# employees)	Group 2 Avg Salary (#employees)	Group 3 Avg Salary (#employees)
Women
Men
Salary Difference ($ and %)

1. For any pay gaps found in the data, can length of service (tenure) or years of work experience (using “age” as a proxy) potentially explain the gap? That is, does it appear that the gender with higher salaries also have more work experience? What other data would have been helpful to determine if there is a legally justified explanation for the pay gap?

ANSWER:

1. In looking closely at the salaries for the exempt workers, are there any other concerns you noted that may not be reflected in the salary averages? If so, explain which employees are a concern and what you would suggest the HR manager do to address this issue.