Human Resources Policies

VII-9.11(B)

PROCEDURES ON PAY ADMINISTRATION FOR EXEMPT POSITIONS

Human Resources   |   Approved January 2, 2000


Responsible VP/AVP

Roger J. Ward, EdD, JD, MPA


Revision History

Revised October 1, 2011 and July 1, 2010


Policy Statement

The Human Resource Services (HRS) Compensation Department (HRS-Compensation) supports the University by developing job descriptions, salary structures and procedures that encourage the recruitment and retention of a highly skilled work force. HRS-Compensation regularly reviews market data and adjusts pay structures or placement of jobs in pay ranges in order to maintain University compensation competitive with the external market.

These Procedures fulfill the requirement in USM Policy VII-9.11 (Policy on Pay Administration for Exempt Positions) that the University adopt procedures to implement that policy. These Procedures are subject to change based on approved State law and/or guidelines from USM or the University . Such guidelines are posted on the HRS website.

I. Purpose and Applicability
The purpose of these Procedures is to establish pay administration criteria and procedures for compensation actions which result in a change of pay for exempt employees. These Procedures apply to full-time and part-time employees in both the regular and Contingent II categories.

II. General

  1. Exempt employees should be compensated appropriately for their individual performance and contribution to the University mission.
  2. Starting salaries for new hires and promotions must be within the range of the pay level of the employee's position. Salaries must meet the FLSA minimum standard of $23,660 annually (or $455 per week) regardless of the employee's percentage of effort; if the minimum is not satisfied, the employee will not be in the exempt employee category.(The $23,660 minimum does not apply to employees teaching or practicing medicine or law.) All compensation decisions are made after consideration of the Four Factorsof equity, competency, market data salaries for comparable jobs, and Department budget.
    1. EquitySalary approvals for pay actions are made by establishing that pay differences for employees are equitable. If an inequitable situation is identified, the affected school or administration representative consults with HRS-Compensation or HRS-Staffing prior to making a pay decision. In support of an equitable compensation program, equity adjustments may be authorized at any time. HRS-Compensation can revise how equity is determined for any School or Administration unit if continuation of its current practices does not support an equitable compensation program. An inequity exists when there are pay differences in similar jobs that cannot be explained by:
      1. differences in amount of time in the job;
      2. differences in responsibilities;
      3. differences based on subordinate-supervisor relationship;
      4. differences in skills, abilities, and education;
      5. differences in requirements for increasingly responsible experience in the job family;
      6. differences in performance evaluations;
      7. other lawful criteria; and/or
      8. unique circumstances related to University service.
    2. Competency - Pay actions are based on employees meeting the competencies outlined in the job description. Minimum qualifications for all positions within the Exempt Pay Plan are based on industry standards and University practice. Job descriptions state educational and experience requirements, and indicate whether substitution of experience for education is allowed. All job descriptions are reviewed by HRS in a systematic way to ensure compliance with these Procedures. Revised job descriptions are posted as they become available. (If an exempt job description requires that the employee in the position be exempt from notice as outlined in the Policy on Separation for Regular Exempt Employees VII-1.22 and/or requires that the employee have State Ethics Law training and file an annual financial disclosure as required by the State Ethics Law, this is indicated on the job description and the job posting.)
    3. Salaries in Relevant Market The relevant market is defined as a broad mix of industries in the regional market place and public doctoral institutions of similar size to the University. The University seeks to maintain a salary structure mid-point that is the market salary for an experienced employee performing the full function of the job description.
    4. Department Budget Approved fiscal year budget for a Department.
  3. Managers are responsible for complying with any budgetary, decision-making or approval requirements prior to submitting salary action requests to HRS.

III. Pay Administration for a New Hire, a Competitive Promotion, or a Lateral Move

  1. HRS-Staffing has authority to approve salary actions reflected in offers for new hires, competitive promotions, or lateral moves. Salary Offers are based on the Four Factors criteria (Section II.B). If business reasons suggest an offer not consistent with a determination made using the Four Factors criteria, a written explanation must be submitted by the Department with the referral/selection report.
  2. Guidelines for Establishing New Positions/Refills that Result in a New Hire, Promotion or Lateral Move
    1. Job Descriptions: A job description is required for all regular and Contingent Category II exempt positions. HRS-Compensation assists requesting Departments with job description development.
    2. New Hires: Starting salary must be within the range of the assigned pay level, meet FLSA requirements, and be determined based on the Four Factors Criteria (Section II.B). A position requisition (http://www.hr.umaryland.edu/main/ hrforms.htm - Position Requisition) is required to initiate a new hire for all regular and Contingent Category II exempt positions.
    3. Promotion: Promotion is an employee’s selection, through a competitive process, to fill a position at a higher pay level. A salary change resulting from promotion must be made with consideration of the Four Factors Criteria (Section II.B).
      1. There is no pay adjustment required except that the promoted employee must be paid at least the minimum of the pay level for the new position.
      2. HRS reports total promotional increases to the President and the Chancellor, with salary details if required.
    4. Lateral Move A lateral move is selection of an employee, through a competitive process, to fill a position at the same level as his/her current position.
  3. Procedure for Competitive Recruitment See USM Policy VII-1.01 (A ) USM Policy on Recruitment and Selection. The Department:
    1. completes a Position Requisition available at http://www.hr.umaryland.edu/main/hrforms.htm - Position Requisition.HRS-Staffing can assist in posting and advertising any position. (Note: This step is not required for positions in the A/AVPD group. For those positions, a job description approved by the President is required.)
    2. submits the Position Requisition and job description (or job description approved by the President, for position in the A/AVPD group) to HRS-Compensation for review.
  4. HRS-Compensation reviews the Position Requisition form and the job description and recommends a salary range based upon the Four Factors Criteria (Section II.B). HRS-Compensation then forwards the information to HRS-Staffing for the recruitment process.

IV. Other Pay Administration Actions

  1. Some salary actions do not require competitive recruitment and can be done at the discretion of the Department with supporting documents. These salary actions include a Within Pay Level Adjustment, Position Reevaluation, Reassignment, or Acting Capacity Appointment. These actions may or may not result in a base pay increase; salary decisions are based upon the Four Factors Criteria (Section II.B).
  2. Within Pay Level Adjustment
    1. A Within Pay Level Adjustment is an adjustment to base salary without changing position or pay level. Equity adjustments are the primary type of Within Pay Level Adjustments. Only one adjustment per twelve months for one employee is allowed.
    2. Guidelines for Within Pay Level Adjustment
      1. Within Pay Level Adjustments are made in order to assure that any pay differences for employees are equitable.
      2. If an inequitable situation is identified within a Department, a Within Pay Level Adjustment can be used to attain pay equity. Equity and inequity are determined under the criteria of Section II.B.1.
      3. A Within Pay Level Adjustment also may be justified if an employee has assumed additional responsibilities based upon having undertaken a supervisory role not anticipated at the time of hire, has gained increasing experience in the job family, or has assumed a lead role in an area of responsibility.
    3. Procedure for Within Pay Level Adjustment. A Department seeking a Within Pay Level Adjustment:
      1. completes a Within Pay Level Adjustment form outlining the proposed increase amount, effective date, and written decision making rationale. Within Pay Level Adjustment Form is available at http://www.hr.umaryland.edu/main/hrforms.htm;
      2. attaches supporting written documentation describing the reason for the within pay level adjustment, e.g., correction of inequity, significant addition of responsibilities, assumed lead role, etc.;
      3. attaches the employee's resume; and
      4. forwards the form, resume, and justification to HRS-Compensation.
    4. If a within Pay Level Adjustment is approved by HRS-Compensation, it advises the Department, which then generates an Employee Action Form to reflect the employee's new salary.
  3. Position Reevaluation
    1. Position reevaluation is a decision that an employee's position has changed to a different position, typically as the result of assumption of new responsibilities, addition of new roles as a result of educational achievements, or addition of a supervisory role.
    2. Guidelines for Position Reevaluation
      1. Reevaluation may or may not result in a base salary increase.
      2. The Department or the concerned employee may request reevaluation.
    3. Procedure for Department to Request Position Reevaluation. The Department:
      1. completes the Reevaluation Request form, available at http://www.hr.umaryland.edu/main/hrforms.htm;
      2. identifies the job description which most closely matches the new duties and responsibilities (job descriptions are available at http://www.hr.umaryland.edu/compensation/);
      3. on a copy of the job description, circles the primary duties, adding any essential job duties not listed on the job description;
      4. if no existing job description is a close match, completes the New Job Title/Description Questionnaire form available at http://www.hr.umaryland.edu/main/hrforms.htm and submits it to HRS-Compensation for analysis;
      5. attaches supporting written documentation describing the rationale for the reevaluation, and:
        1. includes the new significant and substantive duties that have evolved in the position that are being performed;
        2. indicates the length of time the current incumbent has been performing the new duties listed;
        3. lists any other individuals in the Department performing the same or similar duties and explain why none of them qualify for the new position. (The experience of one individual performing the duties for a period of time does not guarantee a reevaluation's approval by HRS. If other individuals in the Department qualify for the position, a unit specific competitive recruitment is required.)
        4. for a supervisory position, lists the employees being supervised/evaluated and their titles;
        5. to address collective bargaining requirements, submits a Statement of Facts as required for any reevaluated position that has a managerial or supervisory role, or involves access to confidential employee data (forms for submitting the required information are available at http://www.hr.umaryland.edu/main/hrforms.htm.);
        6. attaches the employee's resume;
        7. submits a completed Reevaluation Request form, resume, and documentation to HRS-Compensation; and
        8. proposes an effective date, which must be no earlier than the date the form is received at HRS Compensation.
      6. If reevaluation is approved by HRS-Compensation, it advises the Department, which then generates an Employee Action Form to reflect the employee's new salary and title.
      7. An evaluation that results in an exempt employee moving to a position on the officially approved list of leadership positions identified to be Exempt from Notice requires a letter from the Department to the employee clearly stating that in this new position the person is Exempt from Notice as outlined in Policy VII 1.22 Policy on Separation for Regular Exempt Employees. HRS-Compensation can verify the positions included on this list.
      8. A request to reevaluate to a position in the A/AVPD group requires the President's approval.
      9. HRS reports total reevaluation increases to the President and the Chancellor, with salary details if required.
    4. Procedure for Employee to Request Position Reevaluation
      1. An employee wishing to initiate a reevaluation of his or her position should:
        1. print a copy of his or her current job description available at http://www.hr.umaryland.edu/compensation/, and circle the primary duties, indicating percentages of time each duty is performed, and adding any essential job duties not listed on the job description;
        2. attach supporting written documentation describing the basis for the reevaluation;
        3. state the length of time new duties have been performed;
        4. list any other individuals in the Department performing duties that are the same or similar to the new duties;
        5. if supervision is involved in the new duties, list employees being supervised/evaluated and their titles;
        6. attach the employee's resume; and
        7. send the materials described to HRS-Compensation.
      2. HRS-Compensation:
        1. verifies that the documentation is complete;
        2. validates the information with the supervisor;
        3. analyzes the duties, and determines if the reevaluation is supported;
        4. issues its recommendation to the employee and supervisor; and
        5. provides a memo to the employee stating the outcome of the review and next steps related to the request.
  4. Reassignment
    1. Reassignment is the transfer of a University employee from a position to another similar or comparable position. Reassignments are at the discretion of the President or designee and are subject to a separate UMB Policy on Reassignments of Exempt Staff (policy pending), which specifies guidelines and procedures for reassignments.
    2. Reassignments do not result in a salary action. A change in assigned workplace is not a sufficient basis for a salary adjustment, regardless of impact on commuting costs or other personal matters. If a Department requests a salary adjustment due to reassignment resulting in a change in responsibilities, the procedure for a salary increase upon reevaluation of position should be followed. (See IV.C above.)
  5. Acting Capacity Appointments
    1. A current employee may be appointed in an acting capacity to fill a current vacancy due to another employee’s absence, resignation, or unavailability for an extended time for any reason.
    2. Guidelines
      1. An employee assigned to a position in an acting capacity must meet the minimum qualifications for the assigned job or an intermediate position between the employee’s job and the assigned job.
      2. A temporarily increased salary may be offered. ; It should be based on the Four Factors Criteria (Section II.B) and be within the pay range for the job being filled on an acting basis.
      3. Any merit increase or COLA awarded during the time period that the employee is in an acting capacity appointment is based on the employee's salary in the acting capacity appointment. When the acting capacity appointment ends, the employee's salary reverts to the salary before the acting capacity appointment, plus any merit or COLA percentage increases given during that appointment, with those increases being applied only to the salary prior to the acting capacity appointment.
      4. Acting capacity appointments are generally limited to one year. Written requests for extensions beyond one year are considered by HRS-Compensation.
      5. When considering assignment of a nonexempt bargaining unit employee to an exempt position in an acting capacity, a Department may not discuss the possible action with the employee, or implement the temporary assignment, unless and until the supervisor contacts HRS-Employee/Labor Relations, reviews the situation with HRS, and obtains HRS approval to offer the temporary position to the bargaining unit employee.
      6. A request for acting capacity appointment to a position in the A/AVPD group requires the approval of the President.
    3. Procedure. To request an acting capacity appointment, the Department:
      1. completes an acting capacity form available at http://www.hr.umaryland.edu/main/hrforms.htm Acting Capacity;
      2. identifies the job description which most closely matches the new duties and responsibilities. Job descriptions are available at http://www.hr.umaryland.edu/compensation/;
      3. specifies any additional essential job duties not listed on the job description;
      4. attaches supporting written documentation describing the rationale for the acting capacity;
      5. attaches the employee's resume; and
      6. submits the completed forms, resume, and documentation to HRS-Compensation.
    4. If the acting capacity appointment is approved by HRS-Compensation, it advises the Department, which then generates an Employee Action Form to reflect the employee's new salary and acting capacity title.
    5. If the acting capacity appointment involves a managerial or supervisory role, or access to confidential employee data, submits a Collective Bargaining Statement of Facts, using a form available at http://www.hr.umaryland.edu/main/hrforms.htm
    6. If the acting capacity appointment is to a position that requires State Ethics Law training and annual financial disclosure, HRS-Compensation advises the Department and the appointee.
    7. HRS reports total acting capacity increases to the President and the Chancellor, with salary details if required.

V. Annual Pay Adjustments

  1. Cost of Living Adjustments (COLA)

    Cost of Living Adjustments are set by State Law and USM budget action and salary directives.

    1. Guidelines
      1. All regular exempt employees receive COLA as allocated by the State. When an employee's salary is at or above the maximum of salary range, the employee nevertheless receives the COLA increase.
      2. COLA for a Contingent II employee is at the discretion of the Department. The Department should make a choice concerning COLA and indicate it on the contract form at the time of hire.
    2. Procedure
      1. COLA is automatically added to salary for most regular employees through the payroll system.
      2. For Contingent II employees receiving COLA, an Employee Action Form with a copy of the contract is generated by the Department and forwarded to HRSC.
  2. Merit Adjustments

    The merit budget is determined by USM and administered by each USM institution.

    1. Guidelines
      1. Generally, decisions regarding the distribution of merit adjustments are based on performance and budget.
      2. Managers are responsible for complying with any budgetary or other guidelines established in their individual school or administrative divisions.
      3. Salary guidelines/directives are developed annually based on consideration of individual performance, available funds and other relevant criteria.
      4. When an employee's salary is at or above the maximum of salary range, the employee may be eligible for a lump sum merit payment. This amount is not attached to base pay.
      5. An off cycle merit adjustment is available to those employees hired after January 1 upon completion of at least six months of employment. Salary adjustments must follow merit pay guidelines of the current fiscal year.
    2. Procedure
      1. An automated process is in place to process merit adjustments, and procedures are developed annually if merit adjustments are available.
      2. If a merit adjustment is not handled by the automated process (e.g., off cycle adjustment), the Department forwards an Employee Action Form authorizing the merit adjustment in accordance with the University's guidelines.

VI. Other Change in Position Actions

See VII- 9.20(A) UMB Policy on Bonuses for Exempt Staff, and VII- 9.20 (B) UMB Policy on Bonuses for Non-Exempt Staff. Bonuses are not calculated in retirement programs or any other benefits programs.Bonuses are discretionary.

VIII. Other Compensation Payments:Additional compensation payments not covered above or by any other USM/UMB policy or MOU must be reviewed and authorized by the President or his designee. Review of requests must include an evaluation by University Counsel that payment of the compensation is allowed by State law and relevant policies. This requirement applies to compensation, no matter how it may be described.

  1. Exceptions: Exceptions to these Procedures require the prior written approval of the President/designee. Exceptions will be made only to address extraordinary circumstances, and only upon presentation of documentation establishing strong business justification for a requested action.
  2. Construction: These Procedures shall be construed to be consistent with, and their application may be limited by, relevant provisions of State or Federal law and relevant policies and directives of USM.

State law, USM policy, or USM or UMB salary guidelines may limit implementation of these Procedures. For current information, see the HRS website at http://hr.umaryland.edu/compensation/index.htm.

COLA and Merit adjustments are available only as permitted by law, USM policy and guidelines, and UMB policy and guidelines. For current information, see the HRS website at http://hr.umaryland.edu/compensation/index.htm.

These Procedures apply to all regular exempt employees, including those appointed as Associate Vice President, Assistant Vice President, Associate Dean, or Assistant Dean (collectively, in these Procedures, the A/AVPD group). These Procedures do not apply to Associate and Assistant Deans who are employed as faculty and have a secondary administrative appointment. These Procedures do not apply to exempt employees appointed to positions as Deans, Vice Presidents, or other executive roles designated by the President as exempt from these Procedures.

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