Compensating Your Employees Fairly: A Guide to Internal Pay Equity

Regression Models of Equal Pay

Since 1975 multiple regression analysis has been the preferred statistical technique for identifying compensation discrimination based on protected class status.¹ This technique is used by plaintiffs and defendants to demonstrate discrimination (or lack thereof), and was approved by the U.S. Supreme Court for analysis of pay discrimination in 1986.²

Traditional models for examining equal pay generally fall into the two forms suggested in the Harvard Law Review.³

1. The classic model: Regressing the dependent variable (some measure of compensation) on legitimate, nondiscriminatory factors and a dummy variable for ...