Performance Audit
of Citywide Pay
Equity
December 17, 2024
Table of Contents
Audit Team
Audit Objective & Scope
Background
Audit Finding & Recommendations
Questions
Audit Team
CITY AUDITOR
Michael C. Houston
ASSISTANT CITY AUDITOR
Eduardo Luna
PERFORMANCE AUDIT MANAGER
Stephanie Noble
Audit Objectives & Scope
Review pay among employees Citywide by race and gender
to identify significant differences in pay, and
identify potential drivers of significant differences in pay. • Reviewed Citywide pay data from FY 2022-23
• Reviewed base pay, overtime pay, premium pay, and buybacks • Excluded employees that did not work the whole year
• Captured 2,889 fulltime employees and 1,182 part-time employees (79 percent of the number of individuals that received a paycheck at some point during the year) and $471 million in total pay (88 percent of all pay disbursed during FY 2022-23)
Audit Scope
Background
● The City Council requested the Office conduct “an independent investigation into allegations of recurrent pay inequities and mistreatment of women of color by the City Administration” after a former employee alleged pay inequities affecting women of color in the City.
● Based on the City Council’s initial request, former City Auditor Courtney Ruby proposed our Office conduct two separate audits to: (1) review pay equity in the City’s workforce by race and gender, and (2) review the City’s process for investigating claims of harassment, discrimination, and retaliation. This report is the first of the two audits.
Background
● Like its residents, the City of
Oakland’s workforce is racially
diverse
● There were 1,182 part-time
seasonal employees in FY 2022-
23 ● Part-time seasonal employees
had a similar demographic
composition as City employees
overall
● In 2022, nearly 60 percent of
Oakland employees were men
Background
Background
● Research shows persistent pay gaps are based
in differences in salaries in the overall
population (unadjusted wage gaps), and
differences in salaries among people who hold
the same jobs (adjusted wage gaps).
● Nationally, women and people of color tend to
earn less than their male and White
counterparts, even when they have similar
education levels and years of experience.
Occupational Sorting is a term
used in labor economics to
describe how people may “sort”
into fields and industries based
on their experience, exposure,
and opportunities within their
education and career, as well as
widespread norms about work
and society. Occupational
sorting is shaped by society and
is the result of historical and
societal discrimination.
Background
● State and Federal laws require equal opportunity and equal pay by race and gender ● Wage differentials based on systems of seniority or merit, or systems that base earnings on quantity or quality of production, or for factors such as an individual’s education, training, or experience are permitted under the law ● Pay within the City of Oakland is regulated through salary studies, job classifications, union negotiations, and the City Council
Demographic Differences in City
Occupations and Job
Classifications Drive Differences in
Pay
FINDING #1
Overall, Women Earned Less on Average than
Men and People of Color Earned Less than
White Employees
● Reviewing Citywide pay data
for FY 2022-23, women earned
less on average, when not
adjusting for classification or
other factors.
● The regulated pay of each job
classification suggests that the
wage gap occurred as women
tended to occupy lower-paid
classifications than men.
Men and Women of Different Races Tended to
Work in Different Occupations
● Men and women of different
races tended to work in
different occupations, which
resulted in aggregate
(unadjusted) pay
differences, but not
differences in base pay
within classifications.
● We did not see differences
in base pay within
classifications.
The City Could Benefit from Ongoing Systemic
Equity Analysis and Recommendations
● Various departments have initiated
approaches intended to improve employee
representation and pay equity.
● Departments reported access to data as a
roadblock to pay equity analysis.
● Granting the Department of Race and Equity
access to hiring data will facilitate its role to
advise departments on equitable practices
and enhance equity considerations within
the city’s current process for class studies.
Identifying focus areas and
supporting the development of
policies and actions that improve
fairness and opportunity in City
government organizational
practices, including all employment
practices such as hiring, training,
retention, and promotion…
– Oakland Municipal Code Section 2.29.170,
establishing the Department of Race & Equity
The City Administrator’s Office should coordinate with the departments of Human Resources Management, Race and Equity, and Information Technology as needed to set up a system for ongoing access to data from the City’s hiring platform, to enable the Department of Race and Equity to evaluate trends in hiring, retention, and promotion.
Recommendation 2
Recommendation 1
Based on pay and demographic data, the Department of Race and Equity should identify classifications with pay disparities based on gender and race for further investigation of root causes, and make appropriate recommendations to the relevant department directors and the Department of Human Resources Management to address barriers to achieving pay equity.
The Department of Human Resources Management should include bias and perceptions awareness relating to salary negotiation in its supervisory academy training on hiring.
Recommendation 4
Recommendation 3
The City Administrator’s Office should include standard language in job postings for unrepresented management employees to indicate that it is permissible to negotiate salary within the stated range for the position.
Underrepresentation of Women in
High-Paying Sworn Positions and
Overtime Assignments Drove the
Gender Pay Gap in the Police and
Fire Departments
FINDING #2
Women were underrepresented within the
Police and Fire departments, particularly within
higher-paying sworn positions
● The Police and Fire
Departments both have racially
diverse employees; however,
these departments have a
notable gender imbalance, with
a low representation of women.
● In FY 2022-23, just 14 percent of
Fire Department employees
were women and 31 percent of
Police Department employees
were women (based on pay
data reviewed for the entire
fiscal year).
Few Women are in Higher-Paying Sworn
Positions
● Low representation of women within sworn positions drove pay differences in public safety departments; within job classifications, there were no significant differences in base pay.
The Department of Race and Equity should work with the Fire Department and Police Department to enhance outreach, recruitment, and retention strategies to increase the number of successful female recruits.
Recommendation 6
Recommendation 5
The Department of Race and Equity, in coordination with the Fire and Police departments, should track and periodically review the effectiveness of outreach, hiring, retention, and promotion strategies to increase the gender diversity of sworn staff.
Women Received Less Overtime Pay than Men
● While there were no differences in base pay, women in the Police Department made, on average, 12.7 percent less total pay compared to men within the same roles. ● While there were no statistically significant differences in base pay within the same job classifications, differences in overtime drove statistically significant differences in total pay between women and men, but not among people of different races.
The Department of Race and Equity and Police and Fire departments should analyze the equity impacts of the Police and Fire departments’ overtime policies and make recommendations to improve them.
Recommendation 7
Questions?
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