HR Policy and Procedure #30 Compensation Administration Revised August 01, 2019

Purpose
The University strives to attract and retain qualified employees by maintaining a compensation system that is externally competitive and internally consistent.
Policy
Compensation Structure

Job Grades
1. The University utilizes a salary structure for regular Campus and UK HealthCare (UKHC) jobs that of job grades and establishes a salary range for each regular staff position within the salary structure. Each position receives a job grade which is based on many factors, which may include the following:
  1. Job requirements and knowledge,
  2. Communication and people skills,
  3. Thinking and reasoning,
  4. Work environment,
  5. Policy and planning, and
  6. Management and fiscal responsibilities;
  7. Organizational structure;
  8. Prevailing market forces.
2. Each job grade has a salary range with a minimum, a midpoint and top of the range.
Definitions
1. For the purposes of this policy, the following definitions apply:
  1. The minimum of the range of pay level is determined to be competitive for employees who meet the minimum qualifications for the job;
  2. The midpoint of the range is the mathematical midpoint of the salaryrange; and
  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 a merit or pool increase, for those years which the University offers a pay increase opportunity, with acceptable performance and approval.

Process
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.

Human Resources is responsible from a University-wide perspective for developing, managing and communicating the guidelines, structure, and overall equity of the compensation program.
The Provost and each Executive Vice President are responsible for implementing and informing employees about the compensation program policy.
Human Resources is responsible for making recommendations regarding the competitiveness of salaries within the University
1. Salaries shall be compared to external market place applying published market data surveys used to establish rates for specific types of work.
2. Market analysis normally occurs at least every fiscal year, or as often as needed.
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 analysis and availability of funds.

New Position and Existing Position Evaluation
New Positions
Newly established regular positions shall be evaluated by the Human Resources Office of Compensation (HR Compensation) for the appropriate job grade and title.
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. If the job has changed but not significantly, then it should be submitted as an update.
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 HR Compensation.

The request shall include the position description (also known as the job analysis questionnaire (JAQ)) and appropriate supporting documentation justifying the need for the evaluation.
All requests for new positions from state-funded dollars shall be approved by the Provost or appropriate Executive Vice President as determined by their internal procedures.
Other evaluation requests shall be sent to the designee in the unit for review and approval or disapproval.
After approval, HR Compensation shall evaluate the position. The evaluation may include interviewing the supervisor and/or other leaders, reviewing comparator positions, etc.
Positions shall be classified as exempt (salaried) or non-exempt (hourly) in accordance with the Fair Labor Standards Act (FLSA).

Promotion Action
A promotion which results from a reevaluation/reclassification shall be effective at the beginning of the first pay period following action by HR Compensation.
Salary Administration
New Hires/Rehires
Starting salary for new hires shall be determined as follows:

The hiring official shall review the pay range and budget for the position as well as the new hire’s related education and experience. or Time in Position (TIP) for UK HealthCare hires.
If there are comparators to the position (or individuals with the same job title within the hire’s area) their related education and experience or TIP will need to be reviewed for pay equity.
If the new hire possesses only the minimum requirements for the position, the hiring official may propose the salary at the minimum.
If the new hire possesses related education and experience beyond the minimum required, the hiring official may propose a starting salary above the minimum.
All proposed pay shall be approved through the department’s budget office or UKHC Workforce Management (for UKHC hires).
For salaries above the midpoint, the hiring official must include a justification letter to HR Employment.
HR Employment will obtain necessary approvals from the Provost or appropriate Executive Vice President.
No salary shall be approved above the maximum of the range without approval of the President.
HR Employment shall review the proposed salary for compliance with University policy as well as pay equity prior to final approval of an offer.

Promotion
Promotion is the advancement to a position with a higher job grade. Promotions may occur as an outcome of a re-evaluation/reclassification (managed by HR Compensation) or a current employee applying and being selected for a posted position (managed by HR Employment).

All steps to determine starting pay will be the same as listed for New Hires/Rehires.
If proposed pay exceeds 20% of the employee’s current pay, the hiring official must include a justification letter to HR Employment. HR Employment will obtain necessary approvals from the Provost or appropriate Executive Vice President.
If an employee transfers before the effective date of a merit, pool, or a general pay scale increase, the department to which the employee transfers should consult with HR Employment at the time of the transfer to determine the appropriate pay.
HR Employment shall review the proposed pay for compliance with University policy as well as pay equity prior to final approval of an offer.

Additional Credentials
Some positions require that an employee obtain additional certifications, registrations, licensures or relevant academic degrees as an ongoing requirement for the position.

Additional credentials shall be related to the job duties of the position, and the additional credentials will reflect significant value added to the role. Requests for a position to receive additional credentials incentive pay shall be approved by the Provost or appropriate Executive Vice President and forwarded to HR Compensation for approval.
When additional credentials are obtained, an employee’s supervisor may propose that the employee’s salary be increased by up to eight percent, not to exceed the maximum salary of the job grade.
The additional pay shall not be included in equity reviews.
The Provost or appropriate Executive Vice President shall forward a copy of the additional credential(s) for final approval to HR Compensation.

Reinstatement
The salary of a reinstated employee shall be determined by the procedures established for new hires. However, if an employee returns to the same position number within one year, the employee’s previous salary shall be reinstated.
Note: An employee who leaves the University and then returns to University employment for the sole purpose of circumventing this policy shall not be entitled to any provisions of this policy that would enhance the employee’s salary.
Lateral Transfer
A lateral transfer is the movement by an employee to another staff position with the same grade level. Lateral transfers commonly occur when a current employee applies and is selected for a posted position.

The employee usually receives no increase in pay for lateral transfers. However, the steps listed for New Hires/Rehires shall be reviewed in determining starting pay.
If proposed pay is an increase of the employee’s current pay, the hiring official must include a justification letter to HR Employment. HR Employment will obtain necessary approvals from the Provost or appropriate Executive Vice President.
If an employee transfers before the effective date of a merit, pool, or a general salary scale adjustment increase, the department to which the employee transfers should consult with the HR Employment at the time of the transfer to determine the appropriate salary.
HR Employment shall review the proposed salary for compliance with University policy and equity procedures prior to final approval of an offer.

Demotion
A demotion is the movement of an employee to another staff position with a lower grade level. Demotions commonly occur when a current employee applies and is selected for a posted position.

Employees usually receive lower pay when accepting positions in lower grade levels from their current positions.
The pay ina voluntary demotion is determined by HR Employment.
A demotion calculation is applied and the employee’s pay is adjusted to same pay range penetration for the lower graded position as they are currently located.
HR Employment shall review the proposed pay for compliance with University policy as well as pay equity prior to final approval of an offer.
The salary of an employee demoted for unsatisfactory work performance shall normally be the starting pay (minimum) of the lower grade.

Trainee
In the case where no applicant meets the minimum qualifications for a regular position, the department may accept a trainee. To qualify as a trainee, an employee shall be capable of meeting the minimum qualifications within one year from the date of employment. HR Compensation rates for a trainee shall be established by HR Employment at five percent below the minimum of the assigned position grade.
Acting Assignments
A regular employee may receive a salary increase for assuming a higher-level position (as defined by grade) on an “acting” or “interim” basis. For an active, vacant position, one employee may generally be designated and compensated as "acting".

The job for which the employee is acting must be at least one grade higher than the employee’s current pay grade.
An employee in an acting role shall normally receive an acting rate up to a ten percent increase over their current salary
If ten percent is less than the minimum, the employee could either
1. Receive an increase to the minimum of the new range provided the employee meets the minimum qualifications and the department agrees, or
2. Receive an increase to the trainee rate for the new position provided the employee is within one year of meeting the minimum qualifications.
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.
A non-exempt (hourly)_ employee who performs an “acting” assignment shall be eligible for overtime pay for hours worked over 40 during the work week.

Compensation for Overtime
A staff position may classified as non-exempt (hourly) or exempt (salaried). An exempt position is exempt from overtime compensation based on job duties, responsibilities, salary and in some cases, with minimum education required.Full-time exempt employees are required to work at least 40 hours per week. With the demands of the job, they may be required to work evenings and/or weekends.

The exempt determination is made under the provisions of the FLSA and is administered by HR Compensation.
The FLSA requires that positions which are determined to be non-exempt (i.e., not exempt from overtime compensation) will be compensated at one and one-half times the rate of pay for all hours worked over 40 in a work week.
1. Actual hours worked must be entered into the timekeeping system.
2. Overtime pay is earned for hours worked in excess of 40 in the regular work week and compensated at a wage rate of one and one-half times the hourly wage rate.
3. Only actual hours worked are counted in computing eligibility for overtime pay. Leaves and other absence codes will not be counted or added to the number of "hours worked" in a work week and will therefore not be calculated in the overtime rate of pay. Leave hours will be at the regular rate of pay.
4. For a non-exempt staff employee assigned to two or more departments of the University, thus creating a multiple or concurrent employment situation, both departmental managers must approve the concurrent employment.
  1. the HR Compensation should be included in conversations about the employment situation, especially if total hours worked would exceed 40 hours per work week.
  2. The department in which the overtime occurs will be fiscally responsible for the expense.

Definition of Hours Worked
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.
Examples of activities and their classification as hours worked or hours not worked are as follows:

Work permitted away from the premises, for example, the employee’s home, is working time. On-call time spent at home is not working time.
Breaks of 15 minutes for each four hours worked are working time.
Meal periods of 30 minutes are required for each work day over five hours. The employee is completely relieved from duty and performs no job-related duties (including answering the phone).
Time traveling between home and work is not working time, although travel as part of the duties of the work day may be working time. Consult with the HR Compensation Office for clarification on work-related travel.Time when the employee is available but not working is working time if the employee is required to be on the premises and not free to use time as the employee pleases.

Supplemental Pay
The University 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 HR Compensation is responsible for establishing and administering supplemental pay policies.

Shift differential
Shift differential is a premium pay amount in addition to the normal hourly rate of pay.
1. A differential rate of pay shall be added to the regular rate of pay for employees working on recognized second and third shift operations. in compliance with the policies.In collaboration with HR Compensation, a department head, or other designated official, shall determine the exact hours of the second and third shift operations.
2. The HR Compensation shall coordinate and ensure that all employees within the University in similar job classifications shall or shall not receive a shift differential.
3. Shift differential is not added to the normal hourly wage for computing merit or pool adjustments.
4. HR Compensation may authorize other differential rates for specific jobs, as warranted and based on factors like prevailing market forces or practices.
On-Call Pay
On-call pay is a premium pay amount when an employee is scheduled to remain available to be called to work during a scheduled period of time.
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.
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.
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 hours, whichever is greater.
  Note: For overtime pay, on-call pay time is not considered hours worked.
4. HR Compensation works with the department to determine if an employee is eligible for on-call pay.

Exempt Staff Overload
Overload assignments must be in accordance with the Administrative Regulation Policy on Consulting and Other Overload Employment (AR 3:9).
Each of the criterion for an exempt staff overload assignment shall be met as follows:

The assignment is outside the organizational unit(s) in which the employee is regularly assigned, except with approvals as outlined below:
1. Teaching a night or extension class does not have to be outside the organizational unit to qualify for overload eligibility, when all other criteria are met; and/or
2. With prior approval of the Provost an exempt employee may teach a University course for academic credit within the organizational unit the employee is normally assigned to.
  Note: Organizational unit in the Provost areas is defined as the department level in academic units and the division level in non-academic units.
The assignment is beyond the scope of the duties as outlined in the employee’s job description and separate from normal work hours.
Except when an exempt employee teaches a University course for academic credit and the assignment is separate from normal working hours:
1. Vacation time shall not be authorized for the purpose of performing the assignment, which also will be paid on an overload assignment; and
2. An employee who teaches during normal working hours shall make up the time. A staff employee may not teach more than one course during normal working hours.
Except when a staff employee teaches a University course for academic credit, the assignment is of special and infrequent nature making it unreasonable to hire a temporary employee to perform the assignment.
Note: Teaching a night or extension class does not have to be of special or infrequent nature in this way to qualify for overload eligibility when all other criteria are met.
The assignment serves the best interest of the University.

Exempt Staff Overload Compensation
Refer to the Administrative Regulation (AR 3:9).

The employee’s regular unit shall complete the first block of the Internal Overload Form for Exempt Staff Employees and forward this form to the unit in which the overload assignment will be performed.
The unit in which the overload assignment will be performed shall complete the second block of page 1 and the third block of page 2 of the Internal Overload Form for Exempt Staff Employees, and return the form to the employee’s regular unit.
The employee’s regular unit shall complete the first and second blocks of page 2 and forward the form to the HR Compensation. If the assignment is within the employee’s regular unit and it’s teaching a class for academic credit, authorization should be secured from the Provost. This authorization should be attached to the form.
The HR Compensation Director, or designee, shall sign the form, providing all criteria have been met, and forward the form to the college or area requesting the overload assignment.
1. Note: A non-exempt employee is not eligible for an exempt staff overload assignment. If a non-exempt employee teaches a class for academic credit and works in excess of 40 hours in a specific week, then the employee will be paid one and one-half the normal hourly rate or by the fee schedule, whichever is greater.
Any compensation for services will be at an hourly rate unless covered by a fee schedule approved by the Provost or appropriate Executive Vice President.
1. No hourly rate compensation shall exceed the amount arrived at by dividing the employee’s basic annual salary by 2080.
2. The employee's fringe benefits shall not be affected by monies paid for overload assignments.
3. The total annual amount paid to an employee on overload shall not exceed 20% of the employee’s annual salary unless it’s teaching a class for academic credit.
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.

Archived versions of this policy

HR Policy and Procedure #30 Compensation Administration Revised August 01, 2019

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