DAR File No. 38469

Human Resource Management, Administration

Rule R477-6

Compensation

Notice of Proposed Rule

(Amendment)

DAR File No.: 38469
Filed: 04/28/2014 06:42:37 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this amendment is to provide consistency in terms and phrases and to clarify existing rules.

Summary of the rule or change:

The changes: clarify salary adjustments in connections with administrative actions; and clarify pay for performance awards, insurance coverage, and employees converting to career service.

State statutory or constitutional authorization for this rule:

• Section 67-19-6
• Section 63F-1-106
• Section 67-19-12.5
• Section 67-19-12
• Subsection 67-19-15.1(4)

Anticipated cost or savings to:

the state budget:

This rule may accelerate when employees initially receive a longevity increase. The employee demographic affected is minimal.

local governments:

This rule only affects the executive branch of state government and will have no impact on local government.

small businesses:

This rule only affects the executive branch of state government and will have no impact on small businesses.

persons other than small businesses, businesses, or local governmental entities:

This rule only affects the executive branch of state government and will have no impact on other persons. This rule has no financial impact on state employees.

Compliance costs for affected persons:

There is no direct compliance cost for these amendments.

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.

Debbie Cragun, Executive Director

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

Human Resource Management
Administration
Room 2120 STATE OFFICE BLDG
450 N MAIN ST
SALT LAKE CITY, UT 84114-1201

Direct questions regarding this rule to:

• Katie Clayton at the above address, by phone at 801-538-3080, by FAX at 801-538-3081, or by Internet E-mail at [email protected]

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:

06/16/2014

Interested persons may attend a public hearing regarding this rule:

• 05/22/2014 10:00 AM, Senate Bldg, Spruce Room, 420 N State Street, Salt Lake City, UT

This rule may become effective on:

06/30/2014

Authorized by:

Debbie Cragun, Executive Director

R477. Human Resource Management, Administration.

R477-6. Compensation.

R477-6-1. Pay Plans.

(1) With approval of the Governor, the Executive Director, DHRM, shall develop [and ] salary ranges for[adopt] pay plans for each job[position] in classified service. [Positions]Jobs exempt from classified service are identified in Subsection R477-3-1(1).

(a) Each job description shall include a salary range[s with established minimum and maximum rates].

(b) [A salary range includes all pay rates from minimum to maximum.

(c) Pay rate]Wage increases within salary ranges shall be:

(i) at least 1/2%, or

(ii) to the maximum wage[rate] within the salary range, if the difference between the current wage[salary rate] and the salary range maximum [rate]is less than 1/2%.

(iii) This subsection does not apply to legislatively approved salary adjustments and longevity.

(d) Wage[Pay rate] decreases within salary ranges shall be:

(i) at least 1/2%, or

(ii) to the minimum wage[rate] within the salary range, if the difference between the current [salary rate]wage and the salary range minimum [rate ]is less than 1/2%.

(iii) This subsection does not apply to legislatively approved salary adjustments.

 

R477-6-2. Allocation to the Pay Plans.

(1) Each job in classified service shall be assigned to a salary range.

(2) Salary ranges can be adjusted through:

(a) an administrative adjustment determined appropriate by DHRM for administrative purposes that is not based on a change of duties and responsibilities, nor based on a comparison to salary ranges in the market; or

(b) a comparison of the state's benchmark job salary ranges to salary ranges for similar jobs[positions] in the market through an annual compensation survey conducted by DHRM.

(i) Market comparability salary range adjustment recommendations shall be included in the annual compensation plan and shall be submitted to the Governor no later than October 31 of each year.

(ii) Market comparability salary range adjustments shall be legislatively approved.

(iii) If market comparability adjustments are approved for benchmark jobs, salary ranges for other jobs in the same job family shall be adjusted by relative ranking with the benchmark job.

(3) Each job exempted from classified service shall have a salary range with a beginning and ending salary of any amount determined appropriate by the affected agency.

 

R477-6-3. Appointments.

(1) All appointments shall be placed on the DHRM approved salary range for the job.

(2) [Reemployed veterans]Qualifying military service members returning to work under USERRA shall be placed in their previous position or a similar position[ at their previous salary range]. Reemployment shall include the same seniority status, wage[salary], including any cost of living adjustments, general increase, reclassification of the service member[veteran's] preservice position, or market comparability adjustments that would have affected the service member's[veteran's] preservice position during the time spent by the affected service member[veteran] in the uniformed services. Performance related salary increases are not included.

 

R477-6-4. Salary.

(1) [Merit increases. The following conditions apply if merit pay increases are authorized and funded by the legislature:

(a) Employees, classified in position schedule B, shall be eligible for the merit increase if the following conditions are met:

(i) Employee may not be in longevity.

(ii) Employee may not be paid at the maximum of their salary range.

(iii) Employee has received a minimum rating of successful on their most recent performance evaluation, which shall have been within the previous twelve months.

(iv) Employee has been in a paid status by the state for at least six months at the beginning of the new fiscal year.

(b) Employees designated as schedule AA, AQ and AU are not eligible for merit increases.

(c) All other position schedules will be reviewed by DHRM in consultation with the Governor's Office to determine if they are eligible for merit increases.

(2)]Promotions.

(a) An employee who is in[, except for those] designated schedules B, AD, AR, AT, or AW and is[ IN or TL,] promoted to a job[position] with a salary range maximum exceeding the employee's current salary range maximum shall receive a wage[salary] increase of at least 5%.

(b) An employee who is promoted may not be placed higher than the maximum or lower than the minimum in the new salary range except as provided in subsection R477-6-4(3), governing longevity.[  Placement of an employee in longevity shall be consistent with Subsection R477-6-4(4).]

(c) To be eligible for a promotion, an employee shall meet the requirements and skills specified in the job description and position specific criteria as determined by the agency for the position.

(2[3]) Reclassifications.

(a) At agency management's discretion, an employee reclassified to a job[position] with a salary range maximum exceeding the employee's current salary range maximum may receive a wage[pay rate] increase of at least 1/2% or up to the salary range maximum[ rate].  An employee shall be placed within the new salary range.[

(b) An employee may not be placed higher than the maximum or lower than the minimum in the new salary range.] Placement of an employee in longevity shall be consistent with Subsection R477-6-4(3[4]).

(b[c]) An employee whose job[position] is reclassified to a job[position] with a lower salary range shall retain the current wage[salary].[The employee shall be placed in longevity at the employee's current salary if the salary exceeds the maximum of the new salary range.]

(3[4]) Longevity.

(a) An employee shall receive an initial longevity increase of 2.75% 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 or above the maximum of the current salary range for at least one year and received a passing performance appraisal rating [ of successful or higher]within the 12-month period preceding the longevity increase.

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

(c)]An employee who has received the initial longevity increase is then[in longevity shall only be] eligible for an additional 2.75% increase every three years. To be eligible for these additional increases, an employee shall receive a passing performance appraisal rating [of successful or higher ]within the 12-month period preceding the longevity increase.

(c[d]) An employee in longevity [who is reclassified or reassigned to a position with a lower salary range ]shall retain the current actual wage if receiving an administrative adjustment or is reassigned or reclassified to a job with a lower salary range maximum.

(d[e]) An employee in longevity who is [promoted or ]reclassified to a job[position] with a higher salary range maximum shall only receive a wage[salary] increase if the current actual wage is less than the salary range maximum of the new job[position]. At the discretion of agency management [T]the salary increase shall be at least 1/2% or up to the salary range maximum [rate ]of the new job[position].

(e) An employee in longevity who is promoted shall only receive a wage increase if the current actual wage is less than the salary range maximum of the new job. The wage increase shall be at least 5% or up to the salary range maximum of the new job.

(f) An employee in longevity who is promoted, reclassified, transferred, reassigned or receives an administrative adjustment and remains in longevity, shall receive their next longevity increase three years from the date they received the most recent increase if they receive a passing performance appraisal rating within the previous twelve months.

(g) An [E]employee[s] who [are]is not in longevity and [are]is reclassified, transferred, reassigned, or [reassigned]receiving an administrative adjustment and has[have] a current actual wage that is above the salary range maximum of the new job[position] [are]is considered to be above maximum and [are]is not in longevity. Employees shall be eligible for a longevity increase when they have[Longevity rules may not apply until the employee has] been above the salary range maximum for 12 months[three years] and all other longevity criteria are met.

[(g)](h) An [E]employee[s] in Schedules AB, IN, or TL [are]is not eligible for the longevity program.

(4[5]) Administrative Adjustment.

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

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

(c) An employee whose position is changed by administrative adjustment to a job[position] with a lower salary range shall retain the current wage even if the current wage exceeds the new salary range maximum.[salary. The employee shall be placed in longevity at the employee's current salary if the salary exceeds the maximum of the new salary range.]

(5[6]) Reassignment.

An employee's current actual wage may not be decreased[lowered] except when provided in federal or state law. Wage [rate ]decreases shall be at least 1/2% or down to the salary range minimum[ rate in the salary range].

(6[7]) Transfer.

Management may decrease the current actual wage of an employee who transfers to another job[position] with [a]the same or lower salary range maximum. Wage [rate]decreases shall be at least 1/2% or down to the salary range minimum[ rate in the salary range].

(7[8]) Demotion.

An employee demoted consistent with Section R477-11-2 shall receive a reduction in the current actual wage of at least 1/2%, or down to the salary range minimum[ rate of the new position's salary range] as determined by the agency head or designee. The agency head or designee may move an employee to a job[position] with a lower salary range concurrent with the reduction in the current actual wage.

(8[9]) Administrative Salary Increase.

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

(a) An employee shall receive an increase of at least 1/2% or up to the salary range maximum[ rate 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 [A]administrative [S]salary [I]increases shall be:

(i) in writing;

(ii) approved by the agency head or designee;

(iii) supported by unique situations or considerations in the agency.

(d) 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. Wage [rate ]increases shall be at least 1/2% or up to the salary range maximum[ rate of the salary range]. These increases alone do not constitute successful completion of the probationary period or the granting of career service status.

(f) An employee at or above the salary range maximum or in longevity may not be granted administrative salary increases.

(9[10]) Administrative Salary Decrease.

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

(a) The final wage[salary] may not be less than the salary range minimum[ of the salary range].

(b) Wage [rate ]decreases shall be at least 1/2% or down to the salary range minimum[ rate of the salary range].

(c) 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 the employee to include career mobility, reasonable accommodation, or other unique situations or considerations in the agency.

(d) The agency head or designee shall answer any challenge or grievance resulting from an administrative salary decrease.

(10[1]) Career Mobility.

(a) Agencies may offer an employee on a career mobility assignment a wage[salary] increase or decrease of at least 1/2% within the new salary range.

(b) If a career mobility assignment does not become permanent at its conclusion, the employee shall return to the previous position or a similar position and shall receive, at a minimum, the same wage[salary rate] and the same or higher salary range that the employee would have received without the career mobility assignment.

(11[2]) Exceptions.

The Executive Director, DHRM, may authorize exceptions for wage [rate ]increases or decreases.

 

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 may not exceed $4,000 per pay period and $8,000 in a fiscal year, except when approved by DHRM and the governor.

(i) A request for a retirement incentive award shall be accompanied by documentation of the work units affected and any cost savings.

(ii) A single payment of up to $8,000 may be granted as a retirement incentive.

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

(2) Performance Based Incentive Awards.

(a) Cash Incentive Awards

(i) An agency may grant a cash incentive award to an employee or group of employees that demonstrates exceptional effort or accomplishment beyond what is normally expected on the job for a unique event or over a sustained period of time.

(ii) Pay for Performance cash incentive award programs offered by an agency shall be included in the agency's incentive awards policy and reviewed annually by DHRM, in consultation with GOMB.

(a) The policy shall include information supporting the following:

(1) Sustainability of the funding for the cash incentive program;

(2) The positions eligible to participate in the Pay for Performance program;

(3) Goals of the program;

(4) Type of work to be incentivized; and

(5) Ability to track the effectiveness of the program.

(iii) All cash awards shall be approved by the agency head or designee. They shall be documented and a copy shall be maintained by the agency.

(b) Noncash Incentive Awards

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

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

(iii) Noncash incentive awards may include cash equivalents such as gift certificates or tickets for admission. Cash equivalent incentive awards shall be subject to payroll taxes and shall follow standards and procedures established by the Department of Administrative Services, Division of Finance.

(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

An agency may award a cash bonus 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) All market based incentive awards shall be approved by DHRM.

(i) When requesting market based awards an agency shall submit documentation specifying how the agency will benefit by granting the incentive award based on:

(A) budget;

(B) recruitment difficulties;

(C) a mission critical need to attract or retain unique or hard to find skills in the market; or

(D) other market based reasons.

(b) Retention Bonus

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

(c) Recruitment or Signing Bonus

An agency may award a bonus to a qualified job candidate to incentivize the candidate to work for the state.

(d) Scarce Skills Bonus

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

(e) Relocation Bonus

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

(f) Referral Bonus

An agency may award a bonus to a current employee who refers a job applicant who is subsequently selected.

 

R477-6-6. Employee Benefits.

(1) An employee shall be eligible for benefits when:

(a) in a position designated by the agency as eligible for benefits; and

(b) in a position which normally requires working a minimum of 40 hours per pay period.

(2) An eligible employee has 30 days from the hire date to enroll in or decline one of the traditional medical insurance plans and 60 days from the hire date to enroll in or decline one of the HSA-qualified medical insurance plans.

(a) An employee shall only be permitted to change medical plans during the annual open enrollment period for all state employees.

(b) An employee with previous medical coverage shall provide a certificate of credible coverage to the state's health care provider which states dates of eligibility for the employee, and the employee's dependents in order to have a preexisting waiting period reduced or waived.

(i) An eligible employee or dependent under the age of 19 may not be required to meet any preexisting waiting period.

(3) An eligible employee has 60 days from the hire date to enroll in dental, vision, and a flexible spending account.

(4) An employee shall enroll in guaranteed issue life insurance within 60 days of the hire date to avoid having to provide proof of insurability.

(a) An employee may enroll in additional life insurance and accidental death and dismemberment insurance at any time and may be required to provide proof of insurability.

(5) An employee eligible for retirement benefits shall be electronically enrolled using the URS online certification process as follows:

(a) An employee with any service time with Utah Retirement Systems prior to July 1, 2011, from any URS eligible employer, shall be automatically enrolled in the Tier I defined benefit plan and the Tier I defined contribution plan.

(i) Eligibility for Tier I shall be determined by Utah Retirement Systems.

(ii) An employee eligible for Tier I shall remain in the Tier I system, even after a break in service.

(b) An employee with no previous service time with Utah Retirement Systems in Tier I shall be enrolled in the Tier II retirement system.

(i) An employee has one year from the date of eligibility to elect whether to participate in the Tier II hybrid retirement system or the Tier II defined contribution plan.

(A) If no election is made the employee shall be automatically enrolled in the Tier II hybrid retirement system.

(ii) An employee eligible for the Tier II system has one year from the date of eligibility to change the election or it is irrevocable.

(c) Changes in employee contributions, beneficiaries, and investment strategies shall be submitted electronically to URS through the URS website.

(6) A reemployed veteran under USERRA shall be entitled to the same employee benefits given to other continuously employed eligible employees to include seniority based increased pension and leave accrual.

(7) All i nsurance coverage, excluding COBRA, shall end:

(a) at midnight on the last day of the pay period in which the employee receives a paycheck for employees hired prior to February 15, 2003; or

(b) at midnight on the last day of the pay period in which the employment termination date became effective for employees hired on February 15, 2003, or later.

 

R477-6-7. Employee Converting from Career Service to Schedule AC, AD, AR, or AS.

(1) A career service employee in a position meeting the criteria for career service exempt schedule AC, AD, AR, or AS shall have 60 days from the date of offer to elect to convert from career service to career service exempt. As an incentive to convert, an employee shall be provided the following:

(a) an administrative salary increase of at least 1/2% or up to the current salary range maximum[ rate of the current salary range]. An employee at the current salary range maximum [of the current salary range ]or in longevity shall receive, in lieu of the salary adjustment, a one time bonus, as determined by the agency head or designee, not to exceed limits in Subsection R477-6-5(1)(b);

(b) state paid term life insurance coverage if determined eligible by the Group Insurance Office to participate in the Term Life Program, Public Employees Health Plan, as provided in Section R477-6-8.[:

(i) Salaries less than $50,000 shall receive $125,000 of term life insurance;

(ii) Salaries between $50,000 and $60,000 shall receive $150,000 of term life insurance;

(iii) Salaries more than $60,000 shall receive $200,000 of term life insurance.]

(2) An employee electing to convert to career service exempt after the 60 day election period may not be eligible for the wage[salary] increase, but shall be entitled to apply for the insurance coverage through the Group Insurance Office.

(3) An employee electing not to convert to career service exemption shall retain career service status even though the position shall be designated as schedule AC, AD, AR or AS. When these career service employees vacate these positions, subsequent appointments shall be career service exempt.

(4) An agency head may reorganize so that a current career service exempt position no longer meets the criteria for exemption. In this case, the employee shall be designated as career service if he had previously earned career service. However, the employee may not be eligible for the severance package or the life insurance. In this situation, the agency and employee shall make arrangements through the Group Insurance Office to discontinue the coverage.

(5) A career service exempt employee without prior career service status shall remain exempt. When the employee leaves the position, subsequent appointments shall be consistent with R477-4.

(6) Agencies shall communicate to all impacted and future eligible employees the conditions and limitations of this incentive program.

 

R477-6-8. State Paid Life Insurance.

(1) A benefits eligible career service exempt employee on schedule AA, AB, AD, AR and AT shall be provided the following benefits if the employee is approved through underwriting:

(a) State paid term life insurance coverage if determined eligible by the Group Insurance Office to participate in the Term Life Program Public Employees Health Plan:

(i) Salaries less than $50,000 shall receive $125,000 of term life insurance;

(ii) Salaries between $50,000 and $60,000 shall receive $150,000 of term life insurance;

(iii) Salaries more than $60,000 shall receive $200,000 of term life insurance.

(2) An employee on schedule AC or AS may be provided these benefits at the discretion of the appointing authority.

 

R477-6-9. Severance Benefit.

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

(a) one week of 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.

 

R477-6-10. Human Resource Transactions.

The Executive Director, DHRM, shall publicize procedures for processing payroll and human resource transactions and documents.

 

KEY: [salaries]wages, employee benefit plans, insurance, personnel management

Date of Enactment or Last Substantive Amendment: [January 14, ]2014

Notice of Continuation: February 2, 2012

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