5.2. ERMUSR 06-10-2008~j
Elk River -~
Municipal Utilities
13069 Orono Parkway • P.O. Box 430
Elk River, MN 55330-0430
June 2, 2008
To: Elk River Municipal Utilities Commission
Jerry Takle
John Dietz
Jerry Gumphrey
From: Bryan Adams
Subject: Comparable Worth
Phone: 763.441.2020
Fax: 763.441.8099
At the April 2008 Elk River Municipal Utilities Commission meeting, John Dietz requested a
presentation on State of Minnesota Comparable Worth legislation. I contacted Faith Zwemke of
Department of Employee Relations concerning a presentation to this commission. Due to being
a one person office she does not do presentations but felt the instruction to the compliance
software provides adequate explanation. Enclosed is the following for your information:
1) Paper titled "Pay Equity in Minnesota Public Employment" that I wrote in 1995 while at
University of St. Thomas in the MBA program.
2) "Guide to Understanding Pay Equity Compliance and Computer Reports" by Minnesota
Department of Employee Relations.
3) Notice of Compliance dated 10-6-06. We will need to file again in 5 years or in 2011.
At our meeting I will do a short presentation on how the comparable worth software works and
interpreting the results.
John Dietz also requested a survey of the following seven organizations to determine how they
determine administrative salary increases. The results of this survey are reflected below.
Chaska -Market surveys. They also use a pay per performance system for non-union.
Increase was 3.5% area -same as craft people.
Great River Energy -Market surveys.
North St. Paul -Start with union contract increase and evaluate from there.
Shakopee -Cost of living in 3% - 4% range plus merit. Each department gets a fixed
dollar amount that is awarded on merit.
City of Anoka - No response.
Wright Hennepin -Market survey plus merit increases. This year administrative
received 3.5% where craft people received 3.25%.
Connexus -Market survey.
Elk River -Market survey.
There is a perception that Elk River Municipal Utilities pay scale far exceeds the City of Elk
River pay scale for comparable administrative positions. I will present at our meeting, salary
comparisons that show quite the contrary.
There are two remaining compensation areas that need to be addressed. They are compensation
for Vance Zehringer, our consultant for CIP and special projects, and our meter readers' contract
thru McBrady Meter Reading. Staff will make recommendation at our meeting for we are now
just meeting with McBrady meter reading.
Date: July 30, 1995
Course: MBHR 601
Course Titte: Human Resource Management
Instructor: Pete Connor
Student: Bryan Adams
Subject: Major project
PAY EQUITY IN MINNESOTA
PUBLIC EMPLOYMENT
0
The Austin Utilities is a municipal gas, water, and electric utility, We are
governed by a five person elected commission, and also a very traditional
governmental service organization. The Austin Utilities has approximately 105
employees. Approximately 90 are male and are the construction and operations
people while being predominately union. Approximately 15 are female and are
generally the office personnel and non-union.
In 1984, the State of Minnesota passed a local government pay equity law
(MS 471.991-471.999) establishing a pay equity policy and procedure. The intent of
this equity law is to eliminate sex based wage disparities in Minnesota public
employment circles. Although this legislation has eliminated sex-based wage
disparities, it has created a financial burden to public employers and has caused
considerable conflict inside and outside Minnesota public employers. The
employees of the Austin Utilities along with the Austin Utilities Board of
Commissioners have had particular difficulty understanding and accepting this
legislation. The intent of this paper is to briefly describe the history of this equitable
pay issue from both a federal and state legislature standpoint and set forth an
Austin Utilities procedure to reevaluate job positioning to stay in compliance with
this Minnesota legislation.
The policy section of this Minnesota Pay Equity Act in local government
states "...every political subdivision of this state shall establish equitable
compensation relationships between female-dominated, male-dominated, and
balanced classes of employees in order to eliminate sex-based wage disparities in
public employment in this state. A primary consideration in negotiating,
establishing, recommending, and approving compensation is comparable work value
in relationship to other employee positions within the political subdivision."
The following four definitions will help us better understand this pay equity
issue.
1. Equal pay for equal work. (Equal Work)
Two jobs are determined equal if they are significantly the same in skill,
effort, responsibility, and working conditions, and must be paid the same
regardless of gender.
2. Equal pay for similar work. (Similar Work)
Refers to jobs that could be similar with respect to skill, effort,
responsibility, and working conditions, but not substantially equal.
3. Equal pay for equal worth. (Comparable Worth)
This means jobs that are dissimilar, but equal in value or worth to the
employer should be paid the same. Various methods of job evaluations
can be applied to determine job worth as long as the methods measure
skill, effort, responsibility, and working conditions.
4. Equitable compensation relationships
This means that the compensation for female-dominated classes is not
consistently below the compensation for male-dominated classes of
comparable value or worth.
Equitable pay between employees has been a long standing issue. The first
written account is in our Bible, Book of Matthew, Chapter 20, dealing with fair pay
for laborers in a vineyard. The question was; should employees who worked all day
receive the same as employees who work only a couple of hours. During the 18th
and 19th centuries, few women were employed. Men worked primarily in
agriculture. The Industrial Revolution created the need for female workers
beginning particularly in the textile industry. Between 1850 and 1900, as the
Industrial Revolution matured, women began to move into other areas such as the
tobacco and shoe industry. By 1910, the clerical jobs were dominated by women.
Dnring the Civil War, World War 1, and World War 2, women worked in
traditionally male jobs out of necessity, but after these wars, fell back into more
traditional female roles. From approximately 1830 through 1950, the relative wage
of a woman compared to a man was in the 37% to 67% range.
'Various explanations for the differences in pay between male and females
have been suggested as follows.
• Supervisors subconsciously and consciously undermine female
subordinates
• "Networking" is less available to females
• Females are more likely to choose occupations that pay less
• Females tend to have more discontinuous work experience due to family
responsibility
• Women are more likely to bear the brunt of family duties if married
• Females are more likely to turn down critical transfers and job relocation
for the sake of the family
• Females tend to work in industries and occupations that are less heavily
unionized - a condition often accompanied by reduced compensation.
Labor unions supported legislation protectionism for women starting as early
as 1858 when the Knights of Labor openly declared equal pay for equal work The
National Labor Union followed suit in 1868. These union concerns were not
centered on the earnings gap between men and women. The unions viewed such
legislation as a way to protect male jobs and wages from low-wage female
competition. The first account of protective legislation affecting women was a 1867
Massachusetts statute. This statute limited the number of hours women and
children could work.
4
Comparable worth really got its start during World War II when the labor
force was dominated by women. At that time, the National War Labor Board
(NWLB) developed job evaluations and mandated equal pay for comparable worth.
After the war, women were again segregated into traditional sex rotes. Since 1945,
many bills have been introduced into Congress which would adopt the NWLB
approach to equal pay for comparable worth, but Congress has repeatedly rejected
these bills because of the realities of supply and demand. Many states directly after
World War II did adopt equal pay for equal worth legislation,
Many labor unions perpetuated sex segregation in the 1940 time frame. A
1944 clause in the United Auto Workers (UAW) contract stated that "...men and
women shall be divided into separate non-interchangeable occupational groups
unless negotiated locally." The UAW currently represents the majority of the
Austin Utility employees. Motivated to protect returning soldiers salary scales,
unions supported pay equity only in situations where a woman replaced a man in a
male-dominated job during the war.
Finally, in 1963 Congress passed the Equal Pay Act (EPA) which was an
amendment to the Fair Labor Standards Act of 1938. This act prohibits wage
discrimination on the basis of gender in jobs that are equal in skill, effort,
responsibility, and working conditions. Unequal pay is authorized if pay is based on
a seniority system, merit system, incentive wage system or any other system based
on factors other than gender. The Supreme Court has upheld that jobs of men and
women need only be substantially equal and not identical, but does not extend to
comparable jobs, Equal pay and similar work, but not comparable worth.
The Civil Rights Act of 1964 Title VII and subsequent amendments prohibit
discrimination in employment on the basis of race, color, religion, sex, and national
origin. The very ambiguous and controversial Bennett Amendment was added to
this bill which states that sex differences in pay can occur if such differentiation is
authorized by the provision of Equal Pay Act. (Equal pay, Similar work, but not
Comparable worth.)
The Equal Employment Opportunity Commission (EEOC) enforces Title VII
and has issued guidelines regarding sex discrimination. These guidelines ban,
among other discriminating acts, hiring based on stereotype characterization of the
sexes, classification on labeling of men's jobs and women's jobs, and advertising
under male or female headings.
Executive Orders 11246 and 11375, effective 1965 and 1968 respectively,
require contractors securing federal contracts of more than $10,000 to contain
language adhering to Title VII (Equal pay, Similar work) and participate in
affirmative action programs.
6
Other federal legislation prohibiting sex-based discrimination in employment
includes the Pregnancy Discrimination Act of 1978, the Sexual Harassment
Amendment of 1980, and the Civil Rights Restoration Act of 1987. These federal
statutes opened male jobs to women, reduced segregation, and increased earnings
for women, but do not address comparable worth.
There has been a tremendous amount of federal litigation concerning equal
pay and similar work issues, but very Tittle on comparable worth issues. The federal
courts have been reluctant to directly address comparable worth issues because of
the four following reasons.
• Minimal Congressional legislation
• Conflic#s from the Bennett Amendment
• Reluctance to interfere with the market
• Fear of economic repercussions
A strong case can be made that the market itself is discriminatory toward
females. Prevailing wages for many female dominated job classes in the private
sector tend to pay low. (Secretary, bank .teller, nurses, health aids, etc.)
Comparable worth issues are very important to the public sectors for a
number of reasons. Public sectors only include local and state government activity.
Federal government has not initiated any pay equity schemes to date. The majority
(51%) of working women are employed by some form of public employer compared
to approximately 43,3% in the private sector. Productivity in some public jobs are,
in many cases, extremely difficult to measure and the dominance of government in
some industries basically dictates the prevailing wage. Being it good or bad, public
sector wage setting is inherently political, that is, wages are public information and
often reflect political priorities. Pay equity adjustments up to 1990, although not
necessarily comparable worth, have totaled approximately $450 million in the public
sector.
In 1984, Minnesota was the first state to adopt pay equity legislation that
directly addressed comparable worth. This legislation became fully implemented in
1991. It was suggested that Minnesota was the first state to enact such legislation
because of the three following reasons occurring at the same time.
• Strong public sector collective bargaining
~ Democratic control of state government
• Very active commission on the status of women
The policy section of Minnesota's Pay Equity Act is cited earlier in this
paper. The law does not require all jobs with the same value be paid the same. The
law only requires that female classes not be paid consistently below male classes of
comparable value.
This law applies to all political subdivisions which fall under the Public
Employees Labor Relations Act (PELRA) and which have final budgetary approval
authority over wages for a group of employees. This includes cities, counties, school
districts, and the Austin Utilities, to name just a few. Minnesota Department of
Employees Relations (DOER) has the authority to administer this law and has the
responsibility to determine if a political sub-division is in compliance with this
legislation.
This law requires each local government must choose or develop any job
evaluation system as long as that job evaluation system measures skill, effort,
responsibility, and working conditions. Job evaluation is not based on the
performance or qualifications of the person doing the job. Evaluations should
consider the amount of education the job requires, not the amount of education a
current employee brings to the job. In evaluating the job, they should not consider
longevity, seniority, or performance of current employees.
In order to provide the job evaluator with all the information necessary to
rank the job in the Austin Utilities case, the employee describes their position
through the Position Description Questionnaire (PDQ) which is attached. This
PDQ, among other things, addresses skill, effort, responsibility, and working
conditions required of the job. The questionnaire is submitted to the evaluator,
which in the Austin Utilities case is Hay Management Consultants, which assigns
evaluation points to each job.
The law requires local governments to identify classes for which a
compensation inequity exist between male dominated, female dominated, and
balanced classes of employees based on the comparable work value. Pay equity
refers only to relationships within a jurisdiction. In our case, the Austin Utilities is a
jurisdiction. If pay equities are identified, the law requires the employer to examine
the current pay system and correct any gender-based disparities in pay between
female job classes and male job classes. The law does not prescribe methods to be
used to achieve pay equity. The three options to achieve gender based equity are to
lower the salary of the male dominated job, raise the salary of the female dominated
job classes, or subcontract work to contractors to achieve compliance, for contracted
employees are not covered by pay equity. The Austin Utilities chose the second.
Once pay equity has been achieved, each local government must maintain its
job evaluation system in order to evaluate new job classes and address any changes
in existing classes. The purpose of maintaining the job evaluation system is to
maintain equitable compensation relationships.
In order for the Austin Utilities to stay in compliance with the intent of the
Comparable Worth legislation, attached is a proposed job evaluation policy. This
10
policy describes the criteria and procedure to be followed to re-evaluate Austin
Utilities jobs on an ongoing basis. The Austin Utilities has had a number of union
grievances in the last couple of months concerning job evaluations. The employees
desire is to increase the number of Hay points which will in turn reflect higher
compensation even though the union contract establishes the salary schedule
through 1997. This job evaluation policy which should be adopted shortly should
solve this issue.
11
References
Mary Moore, Yohannon Abraham, "Comparable Worth, It is a Moot Issue?"
Public Personnel Management, Vol. 21, Winter 1992
Mary Moore, Yohannon Abraham, "Comparable Worth, Is is a Moot Issue? Part2",
Public Personnel Management, Vol. 23 Summer 1994
Department of Employee Relations -State of Minnesota. "A Guide to Implementing
Pay Equity in Local Government", Sept. 1990.
12
POSITION DESCRIPTION
QUESTIONNAIRE
Position title:
Department:
Incumbent's name:
Work hours: Start: AM/PM -
Supervisor's name:
1. Position Purpose
Date:
Location:
Phone number:
Fnish: AM/PM
Phone number:
In a brief, specific one-or-#wo sentence statement, answer the questions, "Why
does this position exist?" and "What is it expected to accomplish?"
2. Mayor Challenges
What is the major challenge in your job? Give same examples of the nature and
variety of the problems you typically have to solve.
3. Jab Activities
List a series of brief statements describing major areas of activity in your position.
Generally, activities requiring less than 5% of your time need not be mentioned
separately.
Percarii of Major Y
total job
. .~
TOTAL: 100%
4. Qualifications
Please state the knowledge, skills, abilities and experience necessary for Effective
jab performance (forma! educational credentials may not necessarily be signifiicant).
5. Decision MakinglFreedom to Act
What types of problems are referred to your supervisor or to other authorities for
solution? What is the extent of your decision making authorit~f? What regulations,
rules, or precederns limit your activities and authority?
6. WoriCing Conditions .
Please describe any unpleasant conditions, extreme temperatures, hazardous
substances or devices, or unusual physicial or mental effort required by your job.
Indicate the approximate percent of your year spent in the conditions described.
7. Equipment Opesativ~
What percent of your time do you operate equipment? _ °la
Please Iis< represznt<tive equipment items and whetfier you adjust and repair the
item in addition to oper-~ing ii.
Item Operated p~,d-u~
l Repair
~- ~. Quantitative Data - - ..
Supervisors and Managers only:
Number of ernp(oyea„s supervised:
Annual payro(1(excluding ~benerits): $
Annual operating budget- $
ether Employees:
Do you provide work direction to other employees? Yes No
(f yes, please indiczte number and title of employees to whom work dire-coon is
given and the nature of the direction.
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y0. Additional Comments
Are there any additional camments you would like to make to be sure you have
described your job adequately?
THANK YOU FOR COMPLETING THIS QUESTiONNA1RE.
Please pass it on to your supervisor for his/her review and comments.
SUPERVIHOR REVIEW
AND COMMENTS
It is important that you, the supervisor, review this questionnaire, since you may
have a different perspective of the job described. Do not change the incumbent's
description of the jab in the questionnaire Itself. Please remember that this
questionnaire is intended solely for the purpose of describing the job in question
accurately. !t is not to be used for evaluating the incumbent's performance, nor
should your comments address this~subjecf. It is particularly important that you
review Section 3, Job Activities. If this section is not complete, please fill in the blanks
when you review the questionnaire with the incumbent If you d'isagnse wish any
information provided or believe some information is missing, indicate below the
question number and your comments.
Please check the appropriate statement:
I agree with the incumbent's position questionnaire as written.
I have the following modifications to the questionnaire as written.. -
Question # Comments
Supervisor's Signature Date
Guide to Understanding
Pay Equity Compliance
and Computer Reports
October 2001
Pay Equity Office
Minnesota Department of Employee Relations
200 Centennial Office Building
658 Cedar Street
St. Paul, MN 55155-1603
(651) 296-2653 (Voice)
(651) 297-2003 (TTY)
Leadership and partnership in human resource management
Table of Contents
Page
I. Introduction 1
II. Tests for Compliance 2
III. Determining Whether the Alternative or Statistical 2
Analysis Will Be Used
IV. Explanation of Computer Reports 2
A. Compliance Report 3-5
B. Job List Report 5
C. Optional Graph Sample ~
D. Data Entry Listing Report ~
V. Alternative Analysis Test 8-11
VI. Salary Range Test 12
VII. Exceptional Service Pay Test 13
VIII. Method Used for Pay Line Calculation in the Statistical Analysis 14-17
Guide to Understanding Pay Equity Compliance and Computer Reports - 10/01
Guide to Understanding Pay Equity Compliance
In 1984, the Minnesota Legislature passed the Local Government Pay Equity Act (LGPEA) (M.S.
471.991-.999). Local governments were given until December 31, 1991 to comply with the law and were
required to file reports with the Department of Employee Relations (DOER) by January 31, 1992. All
jurisdictions were then placed on a three year reporting cycle with a third of them reporting each year
beginning in January of 1994. This booklet gives a general overview of how data from the local
government reports is analyzed and how the tests for compliance are conducted. Complete details of
compliance requirements are in Minnesota Rules Chapter 3920.
This booklet also describes the computer software developed by DOER. This software calculates several
of the tests for compliance and the reports produced by the software are explained on pages three through
seven.
Page 1 Guide to Understanding Pay Equity Compliance and Computer Reports - 10/01
Tests for Compliance
1. Completeness and Accuracy Test -
determineswhether jurisdictions have filed
reports on time, included correct data and
supplied all required information.
2. Statistical Analysis Test -described on
pages three through five, compares salary data
to determine if female classes are paid consis-
tently below male classes of comparable work
value (job points). DOER has developed
software that calculates the results for this test.
This test is generally applied to larger jurisdic-
tions. For smaller jurisdictions, the alternative
analysis is used.
3. Alternative Analysis Test -described on
pages eight through 11, compares salary data to
determine if female classes are paid below
male classes even though the female classes
have similar or greater work value (job points).
The software is not used for this test.
4. Salary Range Test -described on page 12,
compares the average number of years it takes
for individuals to move through salary ranges
established for female classes compared to
male classes. This test only applies to jurisdic-
tions that have a system where there is an
established number of years to move through
salary ranges.
5. Exceptional Service Pay Test -described on
page 13, compares how often individuals in
male classes receive longevity or performance
pay above the normal salary range compared to
how often individuals in female classes receive
this type of pay. This test applies only to
jurisdictions that have a system that includes
exceptional service pay.
Determining Whether the
Alternative or Statistical
Analysis Will Be Used
1. Alternative analysis -jurisdiction has:
• Three or fewer male classes.
NOTE: Jurisdictions with three or fewer
male classes may want to skip over the
information on pages two through seven
describing the statistical analysis and
computer reports.
2. Statistical analysis -jurisdiction has:
• Six or more male classes and at least one
class with an established salary range, or
• Four or five male classes and an underpay-
ment ratio of 80% or more. May or may not
have classes with an established salary
range.
3. Start in statistical analysis but go to
alternative analysis -jurisdiction has:
• Four or five male classes and an underpay-
ment ratio below 80%, or
• An underpayment ratio below 80%, six or
more male classes, but no classes with a
salary range.
Explanation of Computer
Reports
Information contained in the next few pages is
intended to explain the three reports produced by
the Pay Equity Analysis System Software. Look
at the sample reports as you read the following
explanations. Each numbered explanation
corresponds to a shaded number on the examples
on pages three, five and six. For informational
purposes, a sample of an optional graph produced
with Quattro Pro software is shown on page
seven.
Guide to Understanding Pay Equity Compliance and Computer Reports - 10/01 Page 2
Compliance Report
The statistical analysis, salary range and excep-
tional service pay test results are shown below.
Part I is general information from the Pay Equity
Implementation Report data. Parts II, III and IV
of the Compliance Report give test results. For
more detail on each test, refer to Minnesota Rules
Chapter 3920.
I. GENERAL JOB CLASS INFORMATION
Male
Classes
Female
Classes
Balanced All Job
Classes Classes
2 14
24 42
1,656.86 '3'
# Job Classes 8 4
# Employees 14 4
Avg. Max Monthly
Pay Per Employee 1,537.22 1,796.87
II. STATISTICAL ANALYSIS TEST
A. Underpayment Ratio = 150.0* 4'' Male Female
Classes Classes
a. # At or above Predicted Pay 5 3
b. # Below Predicted Pay 3 1
c. TOTAL g 4
d. % Below Predicted Pay 37.50 5- 25.00 6
(b divided by c = d)
*(Result is % of male classes below predicted pay divided by % of female classes below
predicted pay.)
B. T-test Results
Degrees of Freedom (DF) = 16 Value of T = -3.732 ;'7
a. Avg. diff. in pay from predicted pay for male jobs = $ 2 -8
b. Avg. diff. in pay from predicted pay for female jobs = $ 75 9
10
III. SALARY RANGE TEST 105.71% (Result is A divided by B)
A. Avg. # of years to max salary for male jobs = 5.29
B. Avg. # of years to max salary for female jobs = 5.00
11
IV. EXCEPTIONAL SERVICE PAY TEST = 50.00% (Result is B divided by A)
A. % of male classes receiving ESP 50.00*
B. % of female classes receiving ESP 25.00
*(If 20% or less, test result will be 0.00.)
Page 3 Guide to Understanding Pay Equity Compliance and Computer Reports - 10/01
Explanation of Compliance Report
Explanations below correspond to shaded numbers
on page three.
2
3.
4
Average Maximum Monthly Salary for
Employees in Male Classes
Average Maximum Monthly Salary for
Employees in Female Classes
Overall Average Maximum Monthly
Salary for an Employee
Underpayment Ratio
The minimum requirement to pass the
statistical analysis test is an underpayment
ratio of 80%. The underpayment ratio is
calculated by dividing the percentage of male
classes below predicted pay (item five) by
the percentage of female classes below
predicted pay (item six). In the example on
page three, 37.5 _ 25 = 150%. Jurisdictions
with an underpayment ratio below 80% can
improve their score by increasing salaries for
female classes to at or above predicted pay.
More details regarding predicted pay are on
pages six, and 14 through 17.
If the underpayment ratio is less than 80%, a
jurisdiction may still pass the statistical analysis
test if the t-test results (explained in item 7) are
not statistically significant. The t-test mea-
sures the average dollar difference from
predicted pay for male and female classes.
5. Percentage of Male Classes Below
Predicted Pay
This percentage is calculated by dividing the
number of male classes below predicted pay by
the overall total of male classes. In the ex-
ample on page three, the total of male classes
is eight, and three fall below predicted pay.
Therefore, 3 _ 8 = 37.50%.
6. Percentage of Female Classes Below
Predicted Pay
This percentage is calculated by dividing the
number of female classes below predicted pay
by the overall total of female classes. In the
example on page three, the total of female
classes is four and one of those falls below
predicted pay. Therefore, l _ 4 = 25%.
7. T-Test & Degrees of Freedom
These numbers are used only for jurisdictions
with an underpayment ratio below 80%, at least
six male classes and at least one class with a
salary range. If the underpayment ratio is
80% or more, these numbers are not used
nor are they used for jurisdictions in the
alternative analysis.
These numbers show the average dollar
amount that males and females are from
predicted pay and answer the question: Are
females paid less than males on average and, is
the underpayment of females statistically
significant?
To determine if these numbers show statistical
significance, they must be checked against the
table on page five. Find the DF number in the
"Degrees of Freedom" column and then look
across for the "Value of T." If the "value of t"
on the compliance report is less than the "value
of t" on the table, it means that either there is
no underpayment of female classes or that the
underpayment is not statistically significant. If
the t-test number is the same or more than the
"value oft" on the table, the underpayment for
female classes is statistically significant and the
jurisdiction would not pass the test.
Salary increases for female classes sufficient
to eliminate statistical significance would allow
a jurisdiction to pass the statistical analysis test
even with an underpayment ratio below 80%.
Guide to Understanding Pay Equity Compliance and Computer Reports - 10/01 Page 4
In the example on page three, t-test results
would not be used because the
underpayment ratio is above 80%, but let's
assume we needed to check these results.
First, we would find 16 in the DF column and
then look across to find the value of t at
1.746. Since our t-test number is -3.732, well
below the value of t on the table, these results
would show that females are not underpaid
compared to males.
10. Salary Range Test
This number must be either 0% or 80% or
more to pass this test. In the example on page
three, 105.71 % is passing. Jurisdictions not
passing this test can pass it by reducing the
number of years it takes for female classes to
reach maximum salaries, increasing the
number of years for males to reach maximum
salaries, or some combination of both. A result
T-Test Table
(5 % Significance)
DF Value oft DF Value oft DF Value of t
1 6.314 12 1.782 23 1.7]4
2 2.920 13 1.771 24 1.711
3 2.353 14 1.761 25 1.708
4 2.132 15 1.753 26 1.706
5 2.015 16 1.746 27 1.703
6 1.943 17 1.740 28 1.701
7 1.895 18 1.734 29 1.699
8 l .860 19 1.729 30 1.697
9 1.833 20 1.725 40 1.684
10 1.812 21 1.721 60 1.671
11 1.796 22 1.717 120 1.658
Infmity 1.645
While the entire method for calculating t-test
results cannot be explained here, it is a
commonly accepted mathematical technique
for measuring statistical significance. The
formula is fairly complex, but basically it
factors in predicted pay, the dollar difference
from predicted pay and the number of employ-
ees. The DF number is the total number of
employees in male or female dominated
classes only, minus two.
8
Average Dollar Amount Male Classes
are Above or Below Predicted Pay
In the example on page three, the maximum
monthly salary for male classes, on average, is
$2 above predicted pay.
9
Average Dollar Amount Female Classes
are Above or Below Predicted Pay
In the example on page three, the maximum
monthly salary for female classes, on average,
is $75 above predicted pay.
of 0% would mean that either there are no
male classes with an established number of
years to move through a salary range, no
female classes with an established number of
years to move through a salary range, or both.
A description of how the salary range test is
calculated is on page 12.
] 1. Exceptional Service Pay Test
This number must be either 0% or 80% or
more to pass this test. In the example on page
three, 50% is not passing. Jurisdictions not
passing this test can pass it by either
increasing the number of female classes that
receive exceptional service pay, decreasing
the number of male classes that receive
exceptional service pay, or some combination
of both. A result of 0% could mean that fewer
than 20% of male classes receive exceptional
service pay or that no female classes receive
exceptional service pay. A description of how
the exceptional service pay test is calculated is
on page 13.
Page 5 Guide to Understanding Pay Equity Compliance and Computer Reports - 10/01
Job List Report
Explanations correspond to shaded numbers
below.
This report can be printed after the results are
computed. The predicted pay and pay difference
columns are helpful in analyzing the cost of
adjusting the salary for any given class.
any particular point level. Specific details of
the method used to calculate predicted pay is
explained in pages 14 through 17. The graph
on page seven shows a "predicted pay line"
and how male and female classes scatter
around that line.
Predicted Pay
The most simplistic definition of predicted
pay is that it is the average pay of male
classes at any given point value. Predicted
pay is calculated by averaging the maximum
monthly salaries for male classes in the
jurisdiction. It is the standard for comparing
how males and females are compensated.
Predicted pay is a mirror, or reflection, of the
current compensation practice within a
jurisdiction for male classes, but is not
necessarily the salary that "should" be paid at
2. Pay Difference
Shows the dollar amount that maximum
monthly salaries fall above or below
predicted pay. If a jurisdiction does not pass
the statistical test and needs to increase
salaries for female classes, either to reach an
underpayment ratio of 80% or eliminate the
statistical significance of the t-test, this
information is useful in calculating the cost.
For example, the cost to increase the female
class of "stage manager" to predicted pay
would be $6.20 per month.
Job List Report
2
04/20/92
Page 1
Job
Number
Class Title Male
Empl Female
Empl Total
Em
l
Sex Work
P
i Max Mo. Predicted pay
p o
nts Salary Pay Difference
2 Box Office 1 I 2 B 110 1,400.41 1344.82 55.59
3 Stage Crew
P 6 1 7 M 130 1,450.26 1447.15 3.11
4 rops Chief
Costume Designer 1
0 0
1 1
1 M 140 1,460.94 1495.59 - 34.65
5
Set Tech.
1
0
1 F 142 1,575.89 1505.17 70.72
6
Lighting Tech
1
0
I M 150 1,560.75 1540.12 20.63
7 .
Effects Eng
1
0
1 M 164 1,625.50 1598.54 26.96
8 .
Stage Manager
0
1
1 M 179 1,645.22 1617.17 28.05
9
Writer F 180 1,610.30 1616.50 -620
10
Marketing Director 1
1 0
0 1 M 180 1,590.19 1616.50 -26.31
11
Actor/Actress
10
12 1
22 M 200 1,690.85 1689.43 1.42
12
Director
1
0
1 B 217 1,730.85 1714.27 16.48
13
Producer
0
1 M 248 1,795.76 1799.79 .-4.03
14
General Manager
0
I 1
1 F 260 1,900.60 1830.73 .69.87
F 300 2,100.67 1933.91 166.76
Guide to Understanding Pay Equity Compliance and Computer Reports - 10/01 Page 6
Optional -Graph Sample
Stageville Theatre
2100 ---------------------------------------------------------------------------------------------- --
2000 --------------------------------=--------------------------------------------------------------------- --------------------------
~, 1800 ---- - -------------------------------------------------------- ----------------- -------
-------------- -----------------------------------
c~
a 1700 ~------------ ------------------------------------------------------- --
--------------------------o--+------- -----
1600 - +
1500 -- ----------------------- ----------------------------------------------------------------------------------------------------------------
1400 ----~----- ------------------------------------------------------ -
1300
100 120 140 160 180 200 220 240 260 280 300
Points
- Pred Pay + Male Jobs o Fem Jobs ® Bal Jobs
Data Entry Listing Report
Shows the data that has been entered for computa- found, they should be corrected using the "modify
tion. This report should be carefully reviewed jobs" function in the software.
before computing the results. If any errors are
Data Entry Listing Report
04/20/92
Page 1
Male Female Work Min Mo. Max Mo. Years Nbr Yrs Exceptional
Job Nbr Class Title Employees Employees Points Salary ala to Max Service Service Pav
1 Box Office 1 1 110 1,200.00 1,400.41 4
2 Stage Crew 6 1 130 1,250.00 1,450.26 5 Longevity
3 Props Chief 1 0 140 1,260.00 1,460.94 5 Longevity
4 Costume Designer 0 1 142 1,375.00 1,575.89 5
5 Set Tech. I 0 150 1,360.00 1,560.75 5 Longevity
6 Lighting Tech. 1 0 164 1,400.00 1,625.50 6 Longevity
7 Effects Eng. 1 0 179 1,425.00 1,645.22 6
8 Stage Manager 0 1 180 1,425.00 1,610.30 5 Longevity
9 Writer 1 0 180 1,400.00 1,590.19 6
10 Marketing Director 1 0 200 1,490.00 1,690.85 4
ll Actor/Actress 10 12 217 1,500.00 1,730.85 4 Performance
12 Director 1 0 248 1,600.00 1,795.76
13 Producer 0 1 260 1,700.00 1,900.60
14 General Manager 0 I 300 1,800.00 2,100.67
Page 7 Guide to Understanding Pay Equity Compliance and Computer Reports - 10/01
Alternative Analysis
The minimum requirement to pass this test is that:
a) there is no compensation disadvantage for at least 80% of female classes compared to male
classes; or,
b) compensation differences can be accounted for by years of service or performance.
On the next few pages the four possibilities that exist for inequities or a compensation disadvantage are
described.
1. A female class with higher points has less compensation than a male class with lower points.
Example: In this case, the female job class of city clerk has more points but less pay than the male
job class of maintenance supervisor.
Max.
Class Monthly
Job Title Tvoe Points Salary
City Clerk F 275 $1665
Maint. Sup. M 171 $1925
The minimum requirement to correct this inequity is that the female class must have a salary at least
equal to that of the male class.
Graph illustrating inequity for female job class.
1
1900 ........................................ ......................... -.................................................
18501- ......_....._ ....................... . ..._......._.........__-...____._......_.............. .
........................
a 1800_.. _ __...._....__ .................... ........
1750
1700
female class with higher points
than male class
1650 ~
160 180 200 220 240 260 280
Points
+ Male Jobs ~ Fem Jobs
Guide to Understanding Pay Equity Compliance and Computer Reports - 10/01 Page 8
2. A female class has the same points as a male class but less compensation.
Example: In this case, the female job class of secretary and the male job class of maintenance have
the same points but the secretary receives less pay.
Max.
Class Monthly
Job Title Tvne Points Salary
City Clerk F 275 $2265
Maintenance M 171 $1900
Secretary F 171 $1630
The minimum requirement to correct this inequity is that the female class must have a salary at least
equal to the male class.
Graph illustrating inequity for female job class.
a
2100-1......_......_ .................................._................................ _._.....
* Male Jobs ~ Fem Jobs
Page 9 Guide to Understanding Pay Equity Compliance and Computer Reports -10/01
3. A female class has points between two male classes but compensation is not between or above the
two male classes.
Example: In this case, the female job class of receptionist has points between two male classes but
receives less pay than either of them.
Max.
Class Monthly
JobTitle Tvge Points Salary
City Clerk F 275 $2370
Maintenance M 171 $1900
Receptionist F 141 $1250
Custodian M 111 $1500
The minimum requirement to correct this inequity is that the female class must have a salary
somewhere between the two male classes.
Graph illustrating inequity for female job class.
2400
cwu _ .. _ ............._....
~,
c° 1800 _.. -
1600
1400 .................. .............. - ..........-......
female class between
two male classes
1200
100 120 140 160 180 200 220 240 260 280
Points
~ Male Jobs o Fem J~
Guide to Understanding Pay Equity Compliance and Computer Reports - 10/01 Page 10
4. A female class(es) rated lower than all male classes is not compensated as reasonably proportionate
to points as other classes.
Example: In this case, the retail clerk has a salary of $700 per month below the custodian but only
six fewer points. For all other job classes where there is a salary difference, there is a larger differ-
ence in points. For example, the maintenance supervisor's salary is $300/month less than the police
officer and there is a difference of 23 points.
Max.
Class Monthly
Job Title Tvoe Points Salary
City Clerk/Admin F 275 $3800
Police Officer M 236 $3200
Maintenance Sup M 213 $2900
Admin. Sec. F 173 $2400
Custodian M 111 $1800
Retail Clerk F 105 $1100
While some difference in salary is acceptable due to the point difference, the salary for the retail
clerk with 105 points must be much closer to the salary for the custodian with 11 l points. When
there is a question regarding the salary for female class or classes rated lower than all male classes,
the judgment is made on a case-by-case basis, and the main consideration is the relationship of points
and pay between other classes in the jurisdiction. In this case, the minimum requirement to correct
this inequity would be that the salary for the retail clerk would be approximately $1,650/month.
Graph illustrating inequity for female class.
3000 ..........__._ ............._._ ___......................................
~ 2500 _ ............. ..................
0
LIIIJV ......_ ...............................
t
1500 -...._....__ - ....
female class rated lower
than all male classes
1000
100 120 140 160 180 200 220 240 260 280
Points
+ Male Jobs ~ Fem Jobs
Page 11 Guide to Understanding Pay Equity Compliance and Computer Reports -10/01
Salary Range Test
This is an example to show how the salary range test is calculated. It is not necessary to calculate this
test manually if the software is being used. If the software is not being used, the following steps will
produce a result for this test. Information is recorded for male or female classes only, not balanced
classes. The information for this example is taken from the Data Entry Listing Report on page seven.
JURISDICTION: Stageville Theatre
Step 1
Look at the "years to max" column and identify male classes with an established number of years to
move through a salary range.
Title
Stage Crew
Props Chief
Set Tech
Lighting Tech
Effects Tech
Writer
Marketing Director
7 total classes
Years to Max
5
5
5
6
6
6
4
37 total years
Step 2
Calculate the average years to reach maximum salary for male classes:
A. Total years from Step 1
B. Total classes from Step 1
C. Divide 2A by ZB
37
7
37 _ 7 = 5.28 average years to max
Step 3
Look at the "years to max" column and identify female classes with an established number of years to
move through a salary range.
Title
Costume Designer
Stage Manager
2 total classes
Years to Max
5
_5
I D total years
Steu 4
Calculate the average years to reach maximum salary for female classes:
A. Total years from Step 3 10
B. Total classes from Step 3 2
C. Divide 4A by 4B 10 _ 2 = S
Stea 5
Divide 2C by 4C and multiply by 100. 5.28 _ 5 = 1.05 x 100 = IOS%
Enter this result in Part C of the Pay Equity Implementation Report.
average years to max
Guide to Understanding Pay Equity Compliance and Computer Reports - 10/01 Page 12
Exceptional Service Pay Test
This is an example to show how the exceptional service pay test is calculated. It is not necessary to calculate
this test manually if the software is being used. If the software is not being used, the following steps will
produce a result for this test. The information for this example is taken from the Data Entry Listing Report on
page seven. Information is recorded for male or female classes only, not balanced classes.
Step 1
Look at the "exceptional service pay" column and calculate the percentage of male classes
receiving exceptional service pay.
A. Total number of male classes where an employee 4
receives exceptional service pay.
B. Total number of male classes in the jurisdiction. g
C. Divide 1 A by 1 B and multiply by 100. 4 - 8 = .50 x 100 = 50%
If result of IC is 20% or less, stop here and check appropriate box in Part D of report form.
If result is more than 20%, go on to Step 2.
Step 2
Look at the "exceptional service pay" column and calculate the percentage of female classes
receiving exceptional service pay.
A. Total number of female classes where an employee I
receives exceptional service pay.
B. Total number of female classes. 4
C. Divide 2A by 2B and multiply by 100. 1 - 4 = .25 x 100 = 25%
Step 3
Calculate the ratio of female/male classes receiving exceptional service pay.
Divide 2C by 1 C and multiply by 100.
25 _ 50 = .50 x l 00 = 50%
Enter result in Part D of the Pay Equity Implementation Report.
Page 13 Guide to Understanding Pay Equity Compliance and Computer Reports -10/01
Method Used for Pay Line Calculation in the
Statistical Analysis
The following explanation is a general description
of how predicted pay is calculated but does not
include all details of the formula in Minnesota
Rules Chapter 3920.
Basis of the Statistical Analysis
A. The definition in the Local Government Pay
Equity Act for equitable compensation
relationship says "...compensation for female-
dominated classes is not consistently below
the compensation for male-dominated classes
of comparable value..."
B. The formula for the statistical analysis is
based on three concepts found in the above
definition: comparable value, male
compensation and consistently below.
Except for classes in the lower and upper ] 0%
of the point range, comparable value is
defined by drawing a 20% window around the
job class being analyzed. Each window
extends ] 0% of the range of points on each
side of the class. In the example, there is a
range of 200 points from lowest to highest, so
10% would be 20 points. Each window must
have at least three male classes (two of which
have different points) and must include at
least 20% of all male classes in the jurisdc
tion. If this criteria is not met, the window
will expand at 5% increments on either side
until the required number of male classes are
included. The drawing below shows one
window for one class.
...........................Q...... ~..................
a.
+ T
~-~o~. lo'b ~
---~ -
2rN .-~ --...... t ..---•-•-~--------- •-~-~---...
I ~
I ~, ~ l class being analyzed
N~ --........ -1
O I
I 1
~ I
1500 ~
00 120 140 160 180 200 220 240 260 280 300
Points
* Male Jobs o Fem Jobs
1. Defining "Comparable Value"
Guide to Understanding Pay Equity Compliance and Computer Reports - 10/01 Page 14
II. Defining "Male Compensation" or "Predicted Pay"
A. The first step in defining male compensation is to draw a "mini" regression line through the male
classes in the window.
.............................................. ...........................................Q--.... ~..--------....-...-
3000 ....................................... ............ ............................ ......... ..................................... ....
~, +
a class being analyzed + t
__ ~
2~N .............~ --
~ I
I I
~ ~ 1
" ---°-----°I
~ ~ I
I I
I ~
1500
100 120 140 160 180 200 220 240 260 280 300
Points
+ Male Jobs ~ Fem Jobs
B. The second step in defining male compensation is to look at the class being analyzed and the same
point on the mini regression line. This point is called predicted pay.
3000 ..............:...... ..... ...........
~,
~ class being analyzed + +
d ~ ~ O
2500 --.........~ - p~~ ~ ............................_...........----..........._- ........._..._...... .-........
I /" ~~predicled pay
l + I
X00 .............I ................ - -.....:. .
----
O _.._.._ .................
I l
I ~
1500 ~ l
100 120 140 160 180 200 220 240 260 280 300
Points
+ Male Jobs ~ Fem Jobs
Page 15 Guide to Understanding Pay Equity Compliance and Computer Reports - 10/01
111. Defining "Consistently Below"
A. A determination is made as to whether the B. Anew window is drawn when the next class is
class being analyzed falls above or below analyzed. This continues until all classes have
predicted pay. In the example, the female been analyzed.
class being analyzed is above predicted pay.
nsw wrrwow
*
a ola wlrwow ~ ' *
~ ~ ~ +
a disappears ~ l ~
,- __..
2500 .__. ..~_ . ~. l
~ ~lnext cuss anal zed
• I I
*~ * I
l ~---••----•-----'--
^ i 1
1500 ' l
100 120 140 160 180 200 220 240 260 280 300
Points
r + -Male Jobs o Fem Jobs
C. When all the classes have been analyzed, a predicted pay line is drawn.
predicted
pay Tine
ctt
a
- Pred Pay * Male Jobs o Fem Jobs
Guide to Understanding Pay Equity Compliance and Computer Reports - 10/01 Page 16
•, , ~•, , -+., t w l au LUUl,.jU Z40 260 280 300
Pants
D. The tabulation of the number of male and
female classes above and below the predicted
pay line is made.
Forexample:
F above = 3 M above = 6
F below = 1 M below = 4
Total = 4 Total = 10
E. The percentage of male and female classes
below predicted pay is calculated by dividing
the number of classes below by the total
number of classes in each group.
Female classes: 1 _ 4 = 25%
Male classes: 4= 10 = ^^^'
YV /'O
F. The percentage of male classes below pre-
dicted pay is divided by the percentage of
female classes below predicted pay. This
produces the "underpayment ratio."
40% = 25% = 160%
G. An underpayment ratio below 80% shows that
female classes are compensated "consistently
below" male classes of comparable value. If
the underpayment ratio is below 80%, further
analysis is done to determine ifthe
underpayment of females is statistically
significant. Using the t-test, a determination is
made whether or not the dollar difference is
statistically significant. Details ofthe t-test
can be found on page four.
Page 17 Guide to Understanding Pay Equity Compliance and Computer Reports - 10/01
~ Department
p of Employee
Q Relations ~
October 6, 2006
Bryan C. Adams
General Manager
Elk River Municipal Utilities
13069 Orono Parkway
Elk River, MN 55330
Dear Mr. Adams:
200 Centennial Office Building
658 Cedar Street
St. Paul, MN 55155
651.259.3637
TTY 651.282.2699
www.doer. state.mn.us
Congratulations! I am very pleased to send you the enclosed notification of compliance with the
Local Government Pay Equity Act. Since the law was passed in 1984, jurisdictions have worked
diligently to meet compliance requirements and your work is to be commended.
As you know, Minnesota Rules Chapter 3920 specifies the procedure and criteria for measuring
compliance and information about your situation is enclosed. In an effort to conserve resources,
we are no longer enclosing the "Guide to Understanding Pay Equity Compliance and Computer
Reports." Instead, we are directing you to our web site www.doer.state.mn.us for this
publication or we will send you a copy in the mail upon request. If you have any questions about
the materials or about pay equity in general, please contact me at (651) 259-3761. Also, this
notice and results of the compliance review are public information and must be supplied upon
request to any interested party.
Again, congratulations on your achievement!
Sincerely,
Faith Zwemke
Pay Equity Coordinator
Attachments
Equal Opportunity Employer
Minnesota Department of Employee Relations
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