Compensation Administration

Revision date of this archived policy: July 11, 2002

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30.1	Policy The University of Kentucky intends to attract and retain qualified employees by maintaining a compensation system that is externally competitive and internally consistent.
	30.1.1	Compensation Structure
		30.1.1.1	Job Grades The University utilizes a salary structure that consists of twenty-four (24) job grades and establishes a salary range for the salary of each regular staff position within the salary structure. Each position receives a job grade based on factors such as job requirements and knowledge, communications and people skills, thinking and reasoning, work environment, policy and planning, and management and fiscal responsibilities. Each job grade has a salary range with a minimum, a midpoint, and top of the range.
		30.1.1.2	Definitions
			30.1.1.2.1	The minimum of the range is the pay level determined to be competitive for employees who meet the minimum qualifications for the job.
			30.1.1.2.2	The midpoint of the range is the mathematical midpoint of the salary range.
			30.1.1.2.3	The top of the range is the highest pay rate in a job grade. An employee whose salary has reached or exceeded the top of the range may receive an annual adjustment in salary based on merit up to the average percentage available to all staff employees on a university-wide basis.
30.2	Delegation
	30.2.1	The University’s entire administrative and management team is responsible for the implementation and administration of the compensation program including salary administration and job evaluation.
		30.2.1.1	Human Resource Services is responsible from a university-wide perspective for developing, managing and communicating the guidelines, structure and overall equity of the compensation program.
		30.2.1.2	The Provost, each vice president and community college president are responsible for implementing and effectively informing employees about the compensation program policy.
	30.2.2	Human Resource Services is responsible for making recommendations to the Vice President for Fiscal Affairs and Information Technology who is responsible for making recommendations to the President regarding the competitiveness of salaries within the University.
		30.2.2.1	These salaries shall be compared to the external market place applying published market data surveys used to establish rates for specific types of work.
		30.2.2.2	Market analysis, using a sample of University jobs, normally occurs at least every other fiscal year, or as often as needed.
		30.2.2.3	The review shall consider factors such as pay for similar kinds of work in the appropriate area of market, pay for comparable benchmark universities, salary surveys, and availability of funds.
30.3	Procedure
	30.3.1	New Position and Existing Position Evaluation
		30.3.1.1	New Positions Newly established regular positions shall be evaluated by the Compensation Office of Human Resource Services (hereafter referred to as the Compensation Office) for the appropriate job grade and title.
		30.3.1.2	Evaluation for Existing Positions The University recognizes that staff positions may change in work content or responsibilities. Therefore, a position may be evaluated when there has been a significant change in required job skills or responsibilities.
		30.3.1.3	Procedure for Position Evaluation A request to establish a new staff position or to evaluate an existing position shall be initiated by the department or division head or unit administrator and submitted to the Compensation Office.
			30.3.1.3.1	The request shall include the job analysis questionnaire and appropriate supporting documentation justifying the need for the evaluation.
			30.3.1.3.2	All requests for new positions from state funded dollars shall be approved by the Provost or the appropriate senior vice president.
			30.3.1.3.3	Other evaluation requests shall be sent to the appropriate designee in the unit for review and approval or disapproval.
			30.3.1.3.4	After approval by the appropriate official in the Provost’s or vice presidents’ area, the Compensation Office shall evaluate the position. The evaluation may include interviewing the appropriate supervisor in the unit.
			30.3.1.3.5	Positions shall be classified as exempt or non-exempt in accordance with the Fair Labor Standards Act (FLSA) (see HRP&P. 5.0).
		30.3.1.4	Promotion Action A promotion which results from an evaluation shall be effective at the beginning of the first pay period following action by the Compensation Office.
	30.3.2	Salary Administration
		30.3.2.1	New Hires Starting salary for new hires shall be determined as follows:
			30.3.2.1.1	The hiring official shall review the new employee’s relevant education and length of related experience, as well as knowledge and skills. If the new employee possesses only the minimum requirements for the position, the hiring official shall set the salary at the minimum.
			30.3.2.1.2	If the employee possesses relevant education, skills, or experience beyond the minimum required, the hiring official shall propose a starting salary from minimum to first quartile and provide justification for the proposal to the Employment Office of Human Resource Services, hereafter referred to as the Employment Office.
			30.3.2.1.3	For salaries above the first quartile, the hiring official shall propose a salary and provide justification to the Provost, the appropriate vice president, or community college president for approval prior to submission to the Employment Office for final approval. No salary shall be approved above the top of the range without approval of the President.
			30.3.2.1.4	If an employee in a position that is not in the staff job grade classification structure applies for and is hired into a regular staff position, the salary shall be based on new hire guidelines for regular staff employees.
			30.3.2.1.5	The Employment Office shall review the proposed salary for compliance with University policy prior to final approval of an offer.
	30.3.3	Promotion
		30.3.3.1	Promotion is advancement to a position with a higher job grade.
			30.3.3.1.1	Salaries for employees who are promoted, or whose positions have been evaluated resulting in a promotion, shall be proposed and approved in the same manner as with new hires except that Human Resource Services may approve an increase of up to 20% of the prior salary not to exceed the midpoint of the new salary range.
			30.3.3.1.2	Promotional increases greater than 20%, or exceeding midpoint of salary range, require approval of Human Resource Services and approval of the Provost, the appropriate vice president, or community college president.
			30.3.3.1.3	The Compensation Office receives requests and gives approval for evaluation of new positions. The Compensation Office also gives approval for evaluation of existing positions as well as salaries for employees in evaluated existing positions.
			30.3.3.1.4	The Employment Office receives requests and approves salaries for promotions.
		30.3.3.2	Career Ladder Promotional Opportunities Promotional opportunities also exist in certain job classifications where career ladder positions have been established and approved. Salaries for employees who advance in career ladder positions shall be determined using the process described under promotion (see 30.3.3.1).
	30.3.4.	Mandatory Credentials Some positions in the University require that an employee obtain additional certifications, registrations, licensures or relevant academic degrees as an ongoing requirement for the position.
		30.3.4.1	Additional education, certification, registration or licensure for a position shall be related to the job duties of the position. Requests for a position requiring mandatory credentials shall be approved by the Provost or the appropriate vice president and forwarded to the Compensation Office for approval.
		30.3.4.2	When additional education, certification, registration or licensure has been obtained, an employee’s supervisor may propose that the employee’s salary be increased by eight percent (8%), not to exceed the maximum salary of the job grade.
		30.3.4.3	The Provost or the appropriate senior vice president shall forward a copy of the additional credential(s) for final approval to the Compensation Office.
	30.3.5	Rehire - Reinstatement
		30.3.5.1	The salary of a "reinstated" or "reemployed" (see HRP&P 15.0) employee shall be determined by the procedures established for new hires (see 30.3.2.1). However, if an employee returns to the same or similar position within one year, the employee’s previous salary shall be reinstated.
		30.3.5.2	One who leaves University employment and then returns to University employment for the sole purpose of circumventing the provisions of HRP&P 30.0 shall not be entitled to any HRP&P 30.0 provisions that would enhance the employee’s salary.
	30.3.6	Lateral Transfer
		30.3.6.1	A lateral transfer is the movement by an employee to another staff position with the same assigned grade within the job classification system.
		30.3.6.2	In case of a lateral transfer, the employee usually receives no increase in pay.
		30.3.6.3	If an employee transfers before the effective date of a merit or general scale adjustment increase, the department to which the employee transfers should consult with the Employment Office to determine the proper salary.
	30.3.7	Demotion
		30.3.7.1	A demotion is the movement of a regular full-time or half-time staff employee from one regular full-time or half-time staff position to a lower grade position within the job classification system.
		30.3.7.2	The rate of pay for a demoted employee shall be determined by the Employment Office when an employee has applied for and has been hired for a position at a lower grade.
		30.3.7.3	The employee's salary in the new position shall normally be adjusted to the same relative percentage of the grade from which the employee was demoted.
		30.3.7.4	The salary of a person demoted for unsatisfactory work performance shall normally be the starting rate of the lower grade.
	30.3.8	Trainee
		30.3.8.1	In the unusual case where no applicant meets the minimum qualifications for a regular position, the Employment Office may recommend that a department accept a trainee.
			30.3.8.1.1	To qualify as a trainee, an employee shall be capable of meeting the minimum qualifications within one (1) year from the date of employment. Compensation rates for a trainee employee shall be established by the Employment Office at five percent (5%) below the minimum of the assigned grade for that position.
			30.3.8.1.2	A trainee is eligible for a merit increase, provided the trainee meets normal merit guidelines.
			30.3.8.1.3	At the time a trainee meets the minimum qualifications of the position, the employee shall receive an increase to the normal start rate of the grade for which the employee qualifies.
	30.3.9	Acting Assignments
		30.3.9.1	An employee may receive a salary increase for assuming a position on an “acting” basis.
			30.3.9.1.1	The employee who assumes an acting role shall normally receive a ten percent (10%) increase over the employee’s current salary, unless ten percent (10%) is less than the minimum of the grade of the acting position or would exceed the salary for which the employee would be eligible if the employee were hired for the position on a regular basis.
			30.3.9.1.2	If ten percent (10%) is less than the minimum of the new range, the employee shall either (a) receive an increase to the minimum of the new range, provided the employee meets the minimum qualifications, or (b) receive an increase to the trainee rate for the new position, provided the employee is within one year of meeting the minimum qualifications.
			30.3.9.1.3	Upon completion of the acting assignment, the employee’s salary shall return to the employee’s regular salary in addition to any merit increases earned during the acting assignment.
	30.3.10	Compensation for Overtime
		30.3.10.1	A staff position may be exempt from overtime compensation based on job duties, responsibilities, salary, and in some cases, minimum education required.
			30.3.10.1.1	This exempt determination is made under the provisions of the Fair Labor Standards Act (FLSA) and is administered by the Compensation Office.
				30.3.10.1.1.1	The FLSA requires that positions which are determined to be non-exempt (i.e. not exempt from overtime compensation) will be compensated for all hours worked over forty (40) in a work week.
			30.3.10.1.2	Overtime pay is earned for hours in excess of forty (40) in the standard work week and compensated at a wage rate of one and one half (1.5) times the hourly wage rate of that staff employee. A non-exempt employee may not receive overtime pay unless the employee works more than forty (40) hours per week.
			30.3.10.1.3	In computing eligibility for overtime pay, all paid leaves except temporary disability leave are counted as hours worked and added to the actual number of hours worked in a work week. Overtime hours shall be authorized in accordance with procedures established by each vice president, as appropriate.
			30.3.10.1.4	Overtime hours shall be compensated in one of two (2) ways, as follows: 1.) Each hour of work in excess of forty (40) hours is compensated by one and one half (1.5) hours of time off in the same pay period; or One and one half (1.5) times the rate of pay is given for hours worked in excess of forty (40) hours in the same week.
		30.3.10.2	For a non-exempt staff employee assigned to two (2) or more departments of the University, thus creating a multiple or dual employment situation, the Compensation Office shall review and either approve or deny such an employment situation, if total hours worked would exceed forty (40) hours per work week.
	30.3.11	Definition of Hours Worked
		30.3.11.1	State law defines hours worked as any time a non-exempt employee is suffered or permitted to work, all time spent by the employee in physical or mental exertion, whether burdensome or not, that is controlled, required, or permitted (although perhaps not requested) by the employer, and pursued necessarily and primarily for the benefit of the employer.
		30.3.11.2	Examples of activities and their classification as hours worked or hours not worked are as follows:
			30.3.11.2.1	Work permitted away from the premises, for example in the employee's home, is working time. However, on-call time at home is not working time. Prior to the actual beginning date of such work, the appropriate supervisor shall approve any employee working away from the premises.
			30.3.11.2.2	Breaks of ten or fifteen (10-15) minutes are working time (see HRP&P 70.0).
			30.3.11.2.3	Meal periods when an employee is completely relieved from duty and performs no job-related duties (including answering the phone) are not working time.
			30.3.11.2.4	Time traveling between home and work is not working time, although travel as part of the duties of the work day is working time.
			30.3.11.2.5	Time when the employee is available but not working is working time if the employee is required to be on the premises and thus not free to use time as the employee pleases.
	30.3.12	Supplemental Pay The University also recognizes the need for supplemental pay for employees in some designated positions and/or for hours of work which may be in periods of time or in circumstances other than those considered normal. The Compensation Office is responsible for establishing and administering supplemental pay policies.
		30.3.12.1	One type of supplemental pay is shift differential, which is a premium pay amount in addition to the normal hourly rate of pay.
			30.3.12.1.1	A differential rate of pay shall be added to the regularly established rate of pay for employees working on recognized second and third shift operations.
			30.3.12.1.2	A department head, or other appropriately designated official, shall determine the exact hours of the second and third shift operations.
			30.3.12.1.3	The Compensation Office shall coordinate and insure that all employees within the University in similar job classifications shall or shall not receive a shift differential.
			30.3.12.1.4	An employee who works hour(s) immediately prior to or immediately following the employee's regularly scheduled work shift shall receive a rate of pay appropriate to each shift for the hours worked in the shift.
	Note: Shift differential pay is added to the normal hourly wage rate as a basis for computing the overtime rate, but it is not added to the normal hourly wage rate for computing annual increments.
		30.3.12.2	Another supplemental pay is on-call pay, which is a premium pay amount when an employee is scheduled to remain available to be called to work during a scheduled period of time.
			30.3.12.2.1	The employee who is not called to work during the scheduled on-call period shall receive the appropriate on-call pay although no hours were worked.
			30.3.12.2.2	The employee who is called to work during the scheduled on-call period shall also receive the appropriate wages for the actual hours worked in addition to the on-call pay.
			30.3.12.2.3	An employee who is called to work during the scheduled on-call period shall receive pay for the actual time worked or a minimum of two (2) hours, whichever is greater.
	Note: For overtime purposes, on-call pay time is not considered hours worked.
		30.3.12.3	The Compensation Office may authorize other differential rates for specific jobs, as warranted.
	30.3.13	Special Assignment (Overload)
		30.3.13.1	Overload assignments must be in accordance with the Administrative Regulation Policy on Consulting and Other Overload Employment (AR II-1.1-1).
		30.3.13.2	Qualifications In an instance where additional compensation is requested for such a specialized assignment, the following criteria must be strictly satisfied, except where otherwise noted (see AR II-1.1-1, Section IV).
			30.3.13.2.1	The assignment is outside the organizational unit(s) in which the exempt staff employee is regularly assigned, except with approvals as outlined below:
				30.3.13.2.1.1	Organizational unit in the Provost or/vice president areas in the University System is defined as the department level in academic units and the division level in non-academic units. For the Community College System, organizational unit is defined as the employing college.
				30.3.13.2.1.2	Teaching a night or extension class does not have to be outside the organizational unit to qualify for overload eligibility whenever all other criteria are met.
				30.3.13.2.1.3	Only with prior approval of the Provost or the appropriate vice president may an exempt employee teach a University of Kentucky course for academic credit within the organizational unit to which the employee is regularly assigned.
			30.3.13.2.2	The assignment is clearly beyond the scope of the specified duties, as set forth in the written job description of the staff employee’s regular position, that is performed during normal and usual working hours.
			30.3.13.2.3	Except when an exempt employee teaches a University of Kentucky course for academic credit, and the assignment to be performed is totally separate and apart from normal and usual working hours.
				30.3.13.2.3.1	Vacation leave shall not be authorized for the purpose of performing an assignment which also will be paid on an overload basis; this would constitute double payment to the staff employee by the University.
				30.3.13.2.3.2	The period normally excluded is 8:00 a.m. to 5:00 p.m. A staff employee who teaches during normal working hours shall make up the time. A staff employee may not teach more than one (1) course during the normal working hours.
			30.3.13.2.4	Except when a staff employee teaches a University of Kentucky course for academic credit, the assignment is of special and infrequent nature thereby making it unfeasible to hire a temporary employee to perform the assignment.
				30.3.13.2.4.1	Teaching a night or extension class does not have to be of special or infrequent nature in this way to qualify for overload eligibility whenever all other criteria are met.
			30.3.13.2.5	The assignment clearly serves the best interests of the University.
			30.3.13.2.6	In no case is any such assignment to be undertaken without the prior express approval of the dean/president of the college or the head of the administrative/operating division under whom the employee is regularly administratively responsible and the dean/president of the college or the head of the administrative/operating division who will be administratively responsible for the employee’s overload assignment and the Compensation Office of Human Resource Services.
		30.3.13.3	Overload Compensation Refer to the Administrative Regulation (AR II-1.1-1).
		30.3.13.4	Procedure
			30.3.13.4.1	The unit in which the employee is regularly assigned shall complete the first block of Form S (the Internal Overload Form for Exempt Staff Employees) and forward Form S to the unit in which the overload assignment will be performed.
			30.3.13.4.2	The unit in which the overload assignment will be performed shall complete the second block of page 1 of Form S, secure the signature of the immediate administrative supervisor of the employee in the overload assignment in block 3 of page 2 of Form S, and return the form to the unit in which the employee is regularly assigned.
			30.3.13.4.3	After securing the signature of the employee (first block of page 2 of Form S) and that of the immediate administrative supervisor for the employee in the regular assignment (second block of page 2 of Form S), the unit in which the employee is regularly assigned shall forward Form S to the Compensation Office. If the overload assignment is within the unit in which the employee is regularly assigned, that unit shall secure authorization for the overload assignment from the appropriate vice president and attach such authorization to the Form S.
			30.3.13.4.4	The Director of Human Resource Services or a designee shall sign Form S if all conditions of AR II-1.1-1/Human Resources Policy - Compensation for Additional Work - Special Assignments (see qualifications above) have been verified and shall forward the form to the dean or president of the college where the employee is regularly assigned.
				30.3.13.4.4.1	Form S is then sent to the dean or president of the college where the overload assignment will be performed.
				30.3.13.4.4.2	That unit shall return Form S to the Compensation Office where it will be processed and copies distributed as appropriate.
	Note: A non-exempt staff employee on an overload basis in excess of forty (40) hours in a specific week will be paid one and one half (1.5) the employee’s normal hourly rate or by the established fee schedule whichever, is greater (see 30.1.9).
	30.3.14	Any compensation for such services will be at an hourly rate unless otherwise covered by a fee schedule which has been approved by the Provost or the appropriate vice president of the affected area. An exempt employee working under the overload policy shall be compensated for such services at an hourly rate unless otherwise covered by a fee schedule which has been approved by the Provost or the appropriate vice president of the affected area. No hourly rate compensation shall exceed that derived by dividing the employee's basic annual salary by 2080. The employee's fringe benefits shall not be affected by monies paid for overload assignments. The total annual amount paid to an employee on overload(s) shall not exceed twenty percent (20%) of the employee’s annual salary.
	30.3.15	An employee shall not be permitted to perform any overload activities until the completed overload form with all approval signatures has been returned to the department to which the employee is regularly assigned.
30.4	Forms
	30.4.1	Internal Overload Form (Form S)

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