DAR File No. 28688

Human Resource Management, Administration

R477-6

Compensation

NOTICE OF PROPOSED RULE

DAR File No.: 28688
Filed: 04/28/2006, 10:57
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

Amendments to this rule remove language that is obsolete or no longer required by Utah Code; make multiple wording adjustments to ensure consistent usage in the rules; implement portions of the changes to the state policy for transfer and reassignment; make nonsubstantive changes to the wording in the section for incentive awards; and provide a severance benefit for schedule AT employees.

Summary of the rule or change:

Section R477-6-4 is amended to remove the Highest Level Performer program from rules and the mandate for market comparability increases (MCI). The language for MCIs was required by the 2005 legislature but is not needed for 2006. There are also multiple changes in the use of the words "pay", "salary", and "actual wage" in order to gain consistency and more precision in the rules governing compensation. These words are being used interchangeably throughout this section and in other parts of the rules. Nonsubstantive amendments to the wording in Section R477-6-5 ensure consistent usage of the terms agency and award. The amendment to Section R477-6-9 gives the same severance benefit to an AT employee who is reassigned to a position with a lower salary range as certain other schedule A employees receive.

State statutory or constitutional authorization for this rule:

Sections 63F-1-106, 67-19-6, 67-19-12, and 67-19-12.5; and Subsection 67-19-15.1(4)

Anticipated cost or savings to:

the state budget:

The severance benefit provided to schedule AT employees in Section R477-6-9 will add cost to the Department of Technology Services if management elects to lower the salary of a reassigned employee in those situations where this is allowed by law. It is anticipated that these situations will be few and it is impossible to predict what the cost may be.

local governments:

This rule only affects the executive branch of state government and will have no impact on local governments. DHRM has authority to write rules only to the extent allowed by the Utah Personnel Management Act, Title 67, Chapter 19. This act limits the provisions of career service and these rules to employees of the executive branch of state government.

other persons:

This rule only affects the executive branch of state government and will have no impact on other persons. DHRM has authority to write rules only to the extent allowed by the Utah Personnel Management Act, Title 67, Chapter 19. This act limits the provisions of career service and these rules to employees of the executive branch of state government.

Compliance costs for affected persons:

This rule only affects agencies of the executive branch of state government. DHRM has authority to write rules only to the extent allowed by the Utah Personnel Management Act, Title 67, Chapter 19. This act limits the provisions of career service and these rules to employees of the executive branch of state government.

Comments by the department head on the fiscal impact the rule may have on businesses:

Rules published by the Department of Human Resource Management (DHRM) have no direct effect on businesses or any entity outside state government. DHRM has authority to write rules only to the extent allowed by the Utah Personnel Management Act, Title 67, Chapter 19. This act limits the provisions of career service and these rules to employees of the executive branch of state government. The only possible impact may be a very slight, indirect effect if an agency passes costs or saving on to business through fees. However, it is anticipated that the minimal costs associated with these changes will be absorbed by agency budgets and will have no affect on business. Jeff Herring, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Direct questions regarding this rule to:

Linda Cooper or Conroy Whipple at the above address, by phone at 801-538-3208 or 801-538-3067, by FAX at 801-538-3081 or 801-538-3081, or by Internet E-mail at LKCOOPER@utah.gov or cwhipple@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

06/14/2006

This rule may become effective on:

07/01/2006

Authorized by:

Jeff Herring, Executive Director

RULE TEXT

R477. Human Resource Management, Administration.

R477-6. Compensation.

R477-6-4. Salary.

(1) Merit increases. The following are applicable if merit increases are authorized and funded by the legislature:

(a) Employees who are not on a longevity step and who are not at the maximum step of their salary range, who receive a successful or higher rating on their performance evaluations and who have been in a paid status by the state for at least six months shall receive a merit increase of one or more salary steps at the beginning of the new fiscal year.

(b) Employees designated as schedule AE, AI and AL who are receiving benefits are eligible for merit step increases.

(c) Employees designated as schedule AJ are not eligible for merit step increases.[

(2) Highest Level Performer.

(a) Employees designated by the agency as a highest level performer consistent with subsection R477-10-1(2) shall receive, as determined by the agency head, either:

(i) a salary step increase; or

(ii) a bonus; or

(iii) administrative leave; or

(iv) other appropriate recognition as determined by the agency.

(b) An employee who is on a longevity step or at the maximum step of the salary range is not eligible for a salary step increase but may receive a bonus, administrative leave or other appropriate recognition as determined by the agency.]

([3]2) Promotions and Reclassifications.

(a) An employee promoted or reclassified to a job with a salary range exceeding the employee's current salary range maximum by one salary step shall receive a salary increase of a minimum of one salary step and a maximum of four salary steps. An employee who is promoted or reclassified to a job with a salary range exceeding the employee's current salary range maximum by two or more salary steps shall receive a salary increase of a minimum of two salary steps and a maximum of four salary steps.

(i) An employee may not be placed higher than the maximum salary step or lower than the minimum salary step in the new salary range. Placement of an employee in longevity shall be consistent with subsection R477-6-4(4).

(ii) An employee who remains in longevity status after a promotion or reclassification shall retain the same salary by being placed on the corresponding longevity step.

(b) To be eligible for a promotion, an employee shall:

(i) meet the job requirements and skills specified in the job description and position specific criteria as determined by the agency for the position unless the promotion is to a career service exempt position.

(c) An employee whose position is reclassified or changed by administrative adjustment to a job with a lower salary range shall retain the current salary. The employee shall be placed on the corresponding longevity step if the salary exceeds the maximum of the new salary range.

([4]3) Longevity.

(a) An employee shall receive a longevity increase of 2.75 percent when:

(i) the employee has been in state service for eight years or more. The employee may accrue years of service in more than one agency and such service is not required to be continuous; and

(ii) the employee has been at the maximum salary step in the current salary range for at least one year and received a performance appraisal rating of successful or higher within the 12-month period preceding the longevity increase.

(b) An employee on a longevity step shall be eligible for the same across the board pay plan adjustments authorized for all other employee pay plans.

(c) An employee on a longevity step shall only be eligible for additional step increases every three years. To be eligible, an employee must receive a performance appraisal rating of successful or higher within the 12-month period preceding the longevity increase.

(d) An employee on a longevity step who is reclassified to a lower salary range shall retain the current [salary]actual wage.

(e) An employee on a longevity step who is promoted or reclassified to a higher salary range shall only receive an increase if the current [salary step]actual wage is less than the highest salary step of the new range.

(f) Agency heads or time limited exempt employees identified in R477-4-[11]10 are not eligible for the longevity program.

([5]4) Administrative Adjustment.

(a) An employee whose position has been allocated by DHRM from one job to another job or salary range for administrative purposes, shall not receive an adjustment in [salary]the current actual wage.

(b) Implementation of new job descriptions as an administrative adjustment shall not result in [a salary]an increase in the current actual wage unless the employee is below the minimum step of the new range.

([6]5) Reassignment.

[When]An employee's current actual wage may only be lowered when permitted by federal or state law, including but not limited to the Americans with Disabilities Act[, management may lower the salary of an employee one or more steps when the employee is reassigned to a position with a salary range having a lower maximum step].

([7]6) Transfer.

Management may increase or decrease the [salary]current actual wage of an employee who initiates a transfer to another position consistent with R477-6-4.

([8]7) Demotion.

An employee demoted consistent with R477-11-2 shall receive a [salary ]reduction in the current actual wage of one or more salary steps as determined by the agency head or designee. The agency head or designee may move an employee to a position with a lower salary range concurrent with the [salary ]reduction in the current actual wage.

([9]8) Productivity step adjustment.

Agency management may establish policies to reward an employee who assumes additional workloads which result from the elimination of a position for at least one year with [a salary]an increase of up to four salary steps. An employee at the maximum step of the salary range or in longevity shall be given a one time lump sum bonus award of 2.75% of their annual salary.

(a) To implement this program, agencies shall apply the following criteria:

(i) either the employee or management can make the suggestion;

(ii) the employee and management agree;

(iii) the agency head approves;

(iv) a written program policy achieves increased productivity through labor and management collaboration;

(v) the agency human resource representative approves;

(vi) the position will be abolished from the position authorization plan for a minimum of one year;

(vii) staff receive additional duties which are substantially above a normal full workload;

(viii) the same or higher level of service or productivity is achieved without accruing additional overtime hours;

(ix) the total dollar increase, including benefits, awarded to the workgroup as a result of the additional salary steps does not exceed 50 percent of the savings generated by eliminating the position.

([10]9) Administrative Salary Increase.

The agency head authorizes and approves administrative salary increases under the following parameters:

(a) An employee shall receive one or more steps up to the maximum of the salary range.

(b) Administrative salary increases shall only be granted when the agency has sufficient funding within their annualized base budgets for the fiscal year in which the adjustment is given.

(c) Justifications for Administrative Salary Increases shall be:

(i) in writing;

(ii) approved by the agency head;

(iii) supported by issues such as: special agency conditions or problems or other unique situations or considerations in the agency.

(d) The agency head is the final authority for salary actions authorized within these guidelines. The agency head or designee shall answer any challenge or grievance resulting from an administrative salary increase.

(e) Administrative salary increases may be given during the probationary period. These increases alone do not constitute successful completion of probation or the granting of career service status.

(f) An employee at the maximum step of the range or on a longevity step may not be granted administrative salary increases.

([11]10) Administrative Salary Decrease.

The agency head authorizes and approves administrative salary decreases for nondisciplinary reasons according to the following:

(a) An employee shall receive a one or more step decrease not to exceed the minimum of the salary range.

(b) Justification for administrative salary decreases shall be:

(i) in writing;

(ii) approved by the agency head; and

(iii) supported by issues such as previous written agreements between the agency and employees to include career mobility; reasonable accommodation, special agency conditions or problems, or other unique situations or considerations in the agency.

(c) The agency head is the final authority for salary actions within these guidelines. The agency head or designee shall answer any challenge or grievance resulting from an administrative salary decrease.[

(12) Market comparability adjustments shall be given on July 2, 2005 to all career service employees who qualify. Non career service employees who receive benefits and whose job title is assigned to a benchmark job shall also receive this increase.

(a) A one step increase shall be given to employees whose benchmark job is determined to be 15 percent to 30 percent below the market based on actual average pay.

(b) A two step increase shall be given to employees whose benchmark job is determined to be 30.1 percent or more below the market based on actual average pay.

(c) Employees on the top of the established pay range or in longevity are not eligible for this increase.]

R477-6-5. Incentive Awards.

(1) Only agencies with written and published incentive award and bonus policies may reward employees with incentive awards or bonuses. Incentive awards and bonuses are discretionary, not an entitlement, and are subject to the availability of funds in the agency.

(a) Policies shall be approved annually by DHRM and be consistent with standards established in these rules and the Department of Administrative Services, Division of Finance, rules and procedures.

(b) Individual awards shall not exceed $4,000 per occurrence and $8,000 in a fiscal year. In exceptional circumstances, an award may exceed these limits upon application to DHRM and approval by the Governor.

(c) All cash incentive awards and bonuses shall be subject to payroll taxes.

(2) Performance Based Incentive Awards.

(a) Cash Incentive Awards

(i) [Agencies]An agency may grant a cash incentive award to an employee or group of employees who:

(A) demonstrate exceptional effort or accomplishment beyond what is normally expected on the job for a unique event or over a sustained period of time.

(ii) All cash awards must be approved by the agency head or designee. They must be documented and a copy shall be maintained in the agency's individual employee file.

(b) Noncash Incentive Awards

(i) [Agency heads]An agency may recognize an employee or group of employees with noncash incentive awards.

(ii) Individual noncash incentive awards shall not exceed a value of $50 per occurrence and $200 for each fiscal year.

(iii) Noncash incentive awards may not include cash equivalents such as gift certificates or tickets for admission.

(3) Cost Savings Bonus

(a) An agency may establish a bonus policy to increase productivity, generate savings within the agency, or reward an employee who submits a cost savings proposal.

(i) The agency shall document the cost savings involved.

(4) Market Based Bonuses

[Agencies]An agency may [give]award a cash bonus to an employee as an incentive to acquire or retain an employee with job skills that are critical to the state and difficult to recruit in the market.

(a) Retention Bonus

An agency may [pay]award a bonus to an employee who has unusually high or unique qualifications that are essential for the agency to retain.

(b) Recruitment or Signing Bonus

An agency may [pay]award a bonus to a qualified job candidate to convince the candidate to work for the state.

(c) Scarce Skills Bonus

An agency may [pay]award a bonus to a qualified job candidate that has the scarce skills required for the job.

(d) Relocation Bonus

An agency may [pay]award a bonus to a current employee who must relocate to accept a position in a different commuting area.

(e) Referral Bonus

An agency may [pay]award a bonus to a current employee who refers a job applicant who is subsequently selected and is successfully employed for at least six months.

R477-6-9. Severance Benefit.

(1) A benefits eligible career service exempt employee on schedule AB, AD, AR or AT who is separated from state service through an action initiated by management, to include resignation in lieu of termination, shall receive at the time of severance a benefit equal to:

(a) one week of [pay]salary, up to a maximum of 12 weeks, for each year of consecutive exempt service in the executive branch; and

(b) if eligible for COBRA, one month of health insurance coverage, up to a maximum of six months, for each year of consecutive exempt service, at the level of coverage the employee has at the time of severance, to be paid in a lump sum payment to the state's health care provider.

(2) A severance benefit shall not be paid to an employee:

(a) whose statutory term has expired without reappointment;

(b) who is retiring from state service; or

(c) who is discharged for cause.

(3) A benefits eligible career service exempt employee on schedule AB, AD, [or ]AR or AT who accepts reassignment to a position with a lower salary range, without a break in service, shall receive a severance benefit equal to the difference between the current [hourly rate of pay]actual wage and the new [hourly rate of pay]actual wage multiplied by the number of accrued annual leave, converted sick leave, and excess hours on the date of reassignment.

(4) An employee on schedule AC, AK, AM or AS may be provided these same severance benefits at the discretion of the appointing authority.

KEY: salaries, employee benefit plans, insurance, personnel management

Date of Enactment or Last Substantive Amendment: [July 2, 2005]2006

Notice of Continuation: June 11, 2002

Authorizing, and Implemented or Interpreted Law: 63F-1-106; 67-19-6; 67-19-12; 67-19-12.5; 67-19-15.1(4)

ADDITIONAL INFORMATION

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For questions regarding the content or application of this rule, please contact Linda Cooper or Conroy Whipple at the above address, by phone at 801-538-3208 or 801-538-3067, by FAX at 801-538-3081 or 801-538-3081, or by Internet E-mail at LKCOOPER@utah.gov or cwhipple@utah.gov

For questions about the rulemaking process, please contact the Division of Administrative Rules (801-538-3764). Please Note: The Division of Administrative Rules is NOT able to answer questions about the content or application of these administrative rules.