How Are Pay Structures Analyzed?

One simple way to analyze your pay structure is to:

1. Average the pay (on a weekly, biweekly, monthly, or hourly basis) for all men and women in particular job class).
2. Compare the salaries of the men and women in that job class. Do all the women fall below the average while all the men fall above it? Unless you have another explanation for those kinds of differences (such as seniority, education, experience, etc.), you may need to consider taking some steps to rectify the situation.

In analyzing your pay structure and making sure that you're in compliance, you have to know:

If you have job descriptions for your employees' positions, this is a perfect time to use them.

What kinds of things should you look for? In analyzing your pay structure, look for instances where a female employee and a male employee do the same work and one employee's pay is much higher. Figure out why that's the case. Some common --and lawful --explanations could be:

• Seniority
• shift differentials
• quantity or quality of work
• experience
• training
• additional job duties
• working conditions
• additional skills required

Violations aren't always easy to spot. Sometimes a problem will be simple to spot, such as when you pay Max $6.00 per hour and you pay Mabel $5.50 an hour for the same work, and there are no other explanations for the disparity. There are other types of violations that aren't so easy to see.

For example, are there situations where males predominantly occupy a certain kind of job that pays more than other jobs? While this situation may say something about your recruiting and hiring practices, it may also lead to problems with Equal Pay Act claims.

You employ three salespeople and five customer service representatives. Salespeople get paid an average of $20,000 annually, and customer service representatives get paid an average of $15,000 annually. All of your salespeople are males, while four out of five of your customer services representatives are female.

While this situation in and of itself does not put you in violation of the Equal Pay Act, it should raise a red flag. If men are in most or all of your highest paying jobs while women are in most or all of your lower paying positions, you'll want to look into this problem and make sure that the differences in pay and in gender/job distribution are motivated by factors other than gender.

If you are sued and found in violation of the Equal Pay Act, you may have to pay any wages owed to the suing parties plus other penalties.