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Pay Equity Audit Checklist Template
A comprehensive, step-by-step checklist for conducting pay equity audits to identify and address compensation disparities. Covers data collection, statistical analysis, gap investigation, and remediation planning.
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Complete pay equity audit checklist with data requirements, analysis methodology, and remediation framework
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Pay Equity Audit Checklist
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Phase 1: Planning and Preparation
Establish the scope, team, and legal framework for the audit.
Define audit scope (entire organization, specific departments, or job families)
Assemble audit team (HR, Legal, Finance, Data Analytics)
Determine whether to conduct under attorney-client privilege
Engage outside legal counsel if needed
Review applicable federal, state, and local pay equity laws
Establish timeline and milestones for completion
Secure budget for analysis tools and potential remediation
Communicate audit plan to senior leadership and obtain sponsorship
Identify data sources and system access requirements
Document audit methodology for consistency and defensibility
Phase 2: Data Collection
Gather comprehensive employee data for analysis. Ensure data accuracy and completeness.
Compensation Data
Base salary or hourly rate for all employees
Total cash compensation (base + bonus + commission)
Equity compensation (stock options, RSUs, grants)
Sign-on bonuses and retention bonuses
Salary range or pay grade for each position
Compa-ratio (salary vs. range midpoint)
Demographic Data
Gender identity
Race and ethnicity
Age (for age discrimination analysis)
Disability status (where legally permissible to collect)
Veteran status
Job-Related Data
Job title and job family or function
Job level or grade
Department and business unit
Work location (city, state, country)
Years of relevant experience
Tenure with the organization
Education level and relevant certifications
Performance ratings (last 2-3 years)
FLSA status (exempt vs. non-exempt)
Full-time or part-time status
Phase 3: Statistical Analysis
Conduct rigorous statistical analysis to identify unexplained pay gaps.
Define comparable employee groups (job families, levels, locations)
Calculate descriptive statistics (mean, median, range) by demographic group
Run multiple regression analysis controlling for legitimate pay factors
Conduct intersectional analysis (e.g., women of color, older women)
Analyze compa-ratios by demographic group
Review starting salary differences for recent hires
Examine promotion rates and pay increases by demographic group
Assess bonus and equity distribution patterns
Identify outliers requiring individual investigation
Document all analytical methods and assumptions
Phase 4: Gap Investigation and Root Cause Analysis
Investigate identified gaps to determine root causes and appropriate remediation.
Review each statistically significant gap for legitimate business explanations
Interview hiring managers about compensation decision processes
Examine whether pay policies are applied consistently across groups
Check for bias in starting salary negotiations
Investigate differences in access to high-paying roles and promotions
Assess whether performance-based pay is distributed equitably
Review historical pay decisions that may have compounded over time
Determine whether gaps stem from policy, practice, or individual decisions
Phase 5: Remediation and Action Plan
Develop and implement corrective actions to close identified pay gaps.
Immediate Actions:
Calculate total budget needed for salary adjustments
Prioritize adjustments by severity of disparity
Implement salary adjustments for affected employees
Communicate adjustments to affected employees transparently
Policy and Process Changes:
Update compensation policies to prevent future disparities
Implement salary range transparency and structured pay decisions
Train hiring managers on equitable compensation practices
Establish ongoing monitoring and reporting cadence
Audit Findings Summary
Key Findings:
1. ____________________________________________________________
2. ____________________________________________________________
3. ____________________________________________________________
Total Remediation Budget Required: $___________
Number of Employees Affected: ___________
Average Adjustment Amount: $___________
Timeline for Implementation: ____________________________
Next Audit Scheduled: ____________________________
1. ____________________________________________________________
2. ____________________________________________________________
3. ____________________________________________________________
Total Remediation Budget Required: $___________
Number of Employees Affected: ___________
Average Adjustment Amount: $___________
Timeline for Implementation: ____________________________
Next Audit Scheduled: ____________________________
Audit Sign-Off
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How to Use This Checklist Effectively
Before Starting
- Secure executive sponsorship and budget
- Engage legal counsel early in the process
- Ensure data systems can provide needed reports
- Set clear expectations with stakeholders
During the Audit
- Maintain strict data confidentiality
- Document every step for defensibility
- Use consistent methodology across groups
- Involve cross-functional team members
After Completion
- Act promptly on identified disparities
- Communicate changes transparently
- Update policies to prevent recurrence
- Schedule the next audit cycle
Common Pitfalls
- Using incomplete or inaccurate data
- Not controlling for legitimate pay factors
- Ignoring intersectional disparities
- Conducting audits without follow-through
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