03/22/2013 Policies & Procedures (Rev: 11/14/13)

Transcription

1 03/22/2013 Policies & Procedures (Rev: 11/14/13) Policy Name: Approved by: Funding Personnel Actions Date Approved: Purpose: All employees hired by the University have a budget assigned to their position number which matches their wages and benefits. Various funding actions are identified and matched with their appropriate funding sources in the budget. Procedures: The University s budget process identifies a few funding sources that cover various personnel actions. 1. President s discretionary fund: The President s discretionary fund is used at the President s discretion and requires her/his approval. Refer to the forms tab on the University Budget website for the relevant approval form which will guide you through the process of requesting use of the President s discretionary fund. 2. Preliminary commitments: Preliminary commitments are a subset of the President s discretionary budget. There is no budget allocated for these commitments. Preliminary commitments are used to fund interim and working out of class assignments as well as hiring an employee above the budgeted salary for a specific position. As the need for such commitments is identified and approved, they are reduced from the total budget of the President s discretionary funding. These commitments are tracked through the fiscal year, by division and reviewed regularly by the CFO/President. Prior to any written or verbal offer, new hires or replacements of eisting positions over the base budget of more than $7,500 require CFO approval; of more than $12,500 require the President s approval. Working out of class pay is funded through preliminary commitments. As such, all out of class pay actions require the President s approval.

2 3. Contractual: This fund is a central account and is used to fund contractual increases such as longevity, part-time lecturer longevity, step increases, band increases, contractual bonuses, lateral bumping, faculty promotions and across the board increases. 4. Severance: Is funded from the severance account. (fund code G00005, organization code , account code 1695) 5. Growth fund: The Growth fund is used at the Provost s discretion to support academic program growth. 6. Reorganizations: (Please use the reorganization template located in the forms tab) Departments may decide to reorganize their position structure to better reflect their needs. This would include eamples such as reclassifying positions, eliminating positions, replacing vacant positions with newly created positions, etc. The President s approval is required before any of these actions are implemented. If the reorganization results in savings to what is currently budgeted, the difference will become part of the University s contingency fund. If the reorganization proposes more costs than are currently in the budget for positions, the department needs to go through the normal approval path for new funding requests. Wage increases cannot circumvent preliminary commitments, discretionary or re-class approval process by combining it with a reorganization. Supervisors may not use reorganizations to justify discretionary increases to employees. Reclassifications due to substantive changes in job requirements are processed through the Director of Compensation. 7. Annual budget: The budget process can fund position actions for the upcoming year. 8. Supplies, services and maintenance (SS&M): Departments may use their SS&M dollars to fund an increase of less or equal to.25 FTE. The increase should not eceed a total amount of $30,000, inclusive of fringe benefit costs. Under no circumstances will the use of these funds take a position from a non-benefit status to a benefit earning status. Note: Salary savings are defined as unpaid wages calculated when there is an interruption of pay in a permanent, budgeted position. This occurs whenever there is a vacant or unfilled position, an employee goes on a leave without pay, or during an interim assignment when the employee is getting paid less than the salary budget for the interim position.

3 Salary savings are included in the University budget as a negative estimate to budgeted wages. Salary savings cannot be used twice in the budget process. As salary savings occur, they are not to be viewed as additional available resources for use in operations (eceeding controllable budgets). Refer to Funding Sources for Personnel Actions for viable funding sources. All permanent base budget adjustments must be funded on an annual basis regardless of the effective date. {Eample, Position A s salary is $49,000 a year. If a $1,000 increase to its base is approved effective 01/01/2013, the FY13 additional budget funded will be $1,000, not $500. The full amount of $50,000 is the base budget that will roll from year to year. It reflects the actual revenue commitment to this position; the University will need to commit the full $1,000 of its revenues to cover these wages for a fiscal year.} The funding source will also bear the cost of fringe benefits associated with any salary adjustments for any new positions added to the total general fund budget after the Regents have approved it. The total budget for fringe benefits was not built to include fringes for these new positions. (Note: there is no budget for Preliminary Commitments. It is tracked through the President s Discretionary account.) Eastern Michigan University Funding Sources for Personnel Actions ********** Funding Sources ********** Personnel Actions Compensation Adjustments President's Fund Preliminary Commitments ATB Growth Severance Reorganization Annual Budget Faculty Part time lecturer longevity Faculty/promotions Staff Longevity (CP, PS, CC, FM, LL non base) FTE increase Discretionary increases Interim/working out of class Bonuses New hire above/below budgeted salary New positions Gender / race equity increases Healthcare (flat amount) Market adjustment contractual Market adjustment noncontractual Lateral transfers (union) Reclasses (contractual, IT) Reclasses (non contractual) Promotions (contractual) Severances Bumping Step increases Reorganization

4 Supervisor/subordinate inequity Pay compression Definitions: Bonuses (coaches and academic APs): Hiring bonuses are used rarely. A new hire may receive a recruitment bonus as part of the offer letter. The bonus amount is paid in two increments, si months and then one year after employment. A current employee may receive a retention bonus as part of a special salary adjustment or as a lump sum payment. Bumping: Certain bargaining units have bumping rights where a union member has the right to get into a job held by another union member with a lower seniority level. Discretionary increases: Discretionary increases are permanent base salary adjustments for certain employment classifications. FTE increases: FTE increases are permanent increases to base salary associated with an appointment percentage change. Gender/race equity increases: Compensation analyses are conducted periodically to ensure that pay is market competitive (eternal equity) and paid consistently across similar positions, regardless of gender and race differences (internal equity). The analysis may result in gender/race equity increases. Healthcare: Union contracts may dictate an increase (flat amount) in base salaries of its members to help offset the cost of healthcare. In addition, the union may also dictate a flat rate increase that is not added to their members base salaries, to help offset healthcare costs. Interim appointments: Interim assignments should generally last for less than one-year while the replacement candidate search is underway. Salary may increase to the minimum of the learning, competitive, or epert broadband range based on market considerations, candidate qualifications, eperience, and internal equity factors. The employee will move to the position related to the interim assignment. When the interim assignment is concluding, the employee will return to his/her old position and rate of pay when they left the previous position plus any adjustments they would have received had they not been performing in that interim role. Lateral transfer: There may be times when an employee voluntarily moves from one job to another; both of which are in the same range. This is considered a lateral transfer and no adjustment to base pay shall be granted. Longevity (part time lecturers non base, PTs base, FM s non base): Longevity payment criteria, amount, and pay practice are outlined in the respective collective bargaining agreement. Longevity payments can either be applied directly to the base salary or lump-sum payment not applied to base. Market adjustment (contractual): Market adjustments are designed to address positional market alignment, recruitment ability, and retention issues due to the growth of the market. A market reference point is assigned annually to each position based on benchmarked comparable positions. An employee s salary within the market salary range is dependent on individual pay factors including qualifications and years of eperience.

5 Pay compression: Pay compression can be defined as pay differentials that are too small to be considered equitable. The term may apply to differences between the pay of a supervisor and subordinates. Promotions (includes faculty promotions): Promotions include competitive recruitment hiring processes and non-competitive contractual increases. Promotional increases, criteria, and pay practice are outlined in the Compensation Philosophy and in respective collective bargaining agreement. Promotional amounts are applied directly to the base salary. Re-classifications: When an employee s duties and responsibilities change substantially over time, the job can be reclassified so that the position accurately reflects the changed performance requirements. Severances: Non-bargained for employees who are terminated by the University without cause may be provided severance pay (and/or working notice in lieu of severance pay) subject to the University s terms and conditions. Step increases: Contractual increases agreed upon in the union negotiations. Supervisor/subordinate inequity: When a subordinate is paid more than or equal to his/her supervisor Working out of class pay: Working out of class are temporary base salary adjustments. When an employee is working out of class, they remain in their home position. Criteria, amount, and pay practice are outlined in the respective collective bargaining agreement.