Human Resource Management, Administration

Section R477-6-5

Incentive Awards

Notice of Proposed Rule

(Amendment)

DAR File No.: 35880
Filed: 02/16/2012 07:41:52 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The Department of Human Resource Management (DHRM) is amending this section in anticipation of H.B. 251 (2012 General Session) becoming law. This bill passed both the House and Senate.

Summary of the rule or change:

Amendments craft language allowing state agencies to award incentive bonuses for market-based reasons and establish the parameters, including approval from DHRM. Language also clarifies limitations and exceptions for individual incentive awards.

State statutory or constitutional authorization for this rule:

• Subsection 67-19-12(5)

Anticipated cost or savings to:

the state budget:

These amendments are administrative and do not directly impact state budgets.

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 does not directly impact costs or savings to state employees.

Compliance costs for affected persons:

This rule only affects agencies of the executive branch of state government. Amendments refine and change current procedures. Expected impact for compliance is minimal.

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

Rules published by 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 savings 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 effect 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:

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:

• J.J. Acker at the above address, by phone at 801-538-4297, by FAX at 801-538-3081, or by Internet E-mail at jacker@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:

04/16/2012

This rule may become effective on:

07/01/2012

Authorized by:

Jeff Herring, Executive Director

R477. Human Resource Management, Administration.

R477-6. Compensation.

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 [occurrence]pay period and $8,000 in a fiscal year , except when approved by DHRM and the governor.[ In exceptional circumstances, an award may exceed these limits upon application to DHRM and approval by 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) 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 [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) 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.

([a]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.

([b]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.

([c]d) Scarce Skills Bonus

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

([d]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.

([e]f) Referral Bonus

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

 

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

Date of Enactment or Last Substantive Amendment: July 1, 201[1]2

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)