Pay Grade Law and Legal Definition

Pay grade is a system used to group jobs together that have approximately the same relative internal worth and are paid at the same rate or rate range. It is also referred to as "job grade". The process of assigning a job to an appropriate pay grade involves job information, job evaluation, and market considerations. Pay grades may be established by private employer policies, or by federal state laws, which vary by state, for public employees.

Some of the factors that are relevant to a job evaluation include:

  • Experience
  • Education
  • Complexity of Duties
  • Communication with Others
  • Budgetary Responsibility
  • Freedom of Action (level of independence)
  • Direction of Others (supervisory responsibility)
  • Working Conditions/Physical Effort