Payroll Representatives

MeetingJune 7, 2010

6/7/2010 1

Agenda for Today . What is Driving Change at UMB?

. Salary Directives

. Hiring Freeze Guidelines

. Additional Compensation Processing

. Future Planned Changes

6/7/2010 2

What is Driving Change at UMB?

• Unfavorable Audit Results by the Office of Legislative Audits

• Findings of Payments Made to Employees With No Policy to Support the Payment

• UMB Required by Maryland Legislation to submit information of additional compensation paid to employees during FY2010, including value of the payment, purpose of payment and base salary of employee earning the payment

6/7/2010 3

What is Driving Change at UMB?

• UMB required to identify all types of earnings paid during FY2010 (except for regular earnings and overtime).– Leave payouts for terminated employees

– Shift differential and on-call non-exempt payments

– Payments to employees working outside of the U.S.

– Payments for adjunct faculty pay

– Regular earnings for employees who are exempt from FICA withholding

– New codes and processes for Administrative Supplements and Faculty Incentive Plans (training has already been done)

– Supplemental Payments

6/7/2010 4

What Does This Mean For UMB? It’s a New World!

• Campus Commitment to Compliance• More Training• New Codes and Processes• More Documentation• More Tracking• More Reporting

– CUMULATIVE taxable compensation exceeding 10% reported to USM bi-weekly for Faculty and Staff throughout FY2011

• Includes Supplemental Payments and Retention Increases• Excludes Summer Work for 10 month faculty, Teaching Overload,

On-Call pay and Clinical Overload.

6/7/2010 5

6/7/2010

FY2011 Hiring Freeze Exception Form

Hiring Freeze – • Continues throughout FY2011• Same Guidelines• Found at

http://www.hr.umaryland.edu/

6

FY2011 Salary Directives

Highlights

• Applies to All Faculty and Staff on Regular, Contingent Category I and Contingent Category II Status – REGARDLESS OF FUND SOURCE

• No COLA, no merit increases, and no University bonuses for faculty and staff in FY2011

• Salary increases are allowable for promotions and re-evaluations for faculty and staff

• Opportunities for faculty retention adjustments

• Graduate assistants, fellows, post-doctoral and student employees are excluded from the FY2011 salary directives

• No salary increases available for contract renewals for contract faculty and contingent staff employees

http://www.hr.umaryland.edu/compensation/meritcola.htm

6/7/2010 7

FY2011 Salary DirectivesFACULTY RETENTION

• Should be used Judiciously - USM expects that institutions will not send faculty retention requests for more than 5% of their faculty population.

• Intended for Faculty being actively recruited by other institutions or where there is compelling evidence a pre-emptive action is necessary for retention.

• Must have one of the following:

– Written offer to the Faculty member from another institution

– Written evidence, including email or other correspondence, that the faculty member is being recruited seriously by another institution, or a search firm for an institution, at a compensation level likely to exceed the faculty member’s current compensation

– Documentation that the department has experienced retention problems in recent years that likely will result in the loss of a valuable faculty member if a retention adjustment is not made

– Other strong evidence that the institution is at imminent risk of losing a faculty member in the absence of a retention adjustment

• Itemized detail of retention adjustments in excess of 10% with explanation must be reported to USM

• Retention recommendations with supporting documentation should be forwarded to Dr. Malinda Orlin for review. Dr. Orlin will provide her recommendations to the President

6/7/2010 8

6/7/2010

FY2011 Faculty Retention Form

For 7/1/10 Effective Date:

• Retention requests due to Dr. Orlin by 6/11/10

• Approved Retention Adjustments on EA Forms Due 6/17/10.

• Please allow time for processing• Faculty Retention Adjustments must be

reported to the Chancellor

Process will continue as stated until further notice

http://www.hr.umaryland.edu/main/hrforms.htm

9

Legislative Audit Requirements

Important Recent Faculty Policies• II - 1.03(A) - UMB Policy on Concurrent Faculty and Administrative Appointments

Administrative Supplements now require separate appointment letter containing 5 elements identified in this policy

• II - 1.21(B) - UMB Policy on Faculty Supplemental Pay for Summer Work Provides guidance on summer work for 10 month faculty

• II - 1.21(C) - UMB Policy Concerning Supplemental Payments and Salary Adjustments for Faculty Identifies circumstances for which supplemental pay or

salary adjustments may be paid to faculty.

http://cf.umaryland.edu/hrpolicies/

6/7/2010 10

Legislative Audit Requirements

For All Additional Compensation• Identify• Track• Report

6/7/2010 11

Legislative Audit Requirements

Additional Compensation

Additional Compensation is defined as all earnings that do not fall into the categories of

regular earnings or overtime earnings

6/7/2010 12

Legislative Audit Requirements

o Leave Payouts for terminated employees o Shift Differentialo Adjunct Faculty Pay for Existing UMB Employeeso Allowances for Employees Working Overseaso Supplemental Payments

6/7/2010

ADDITIONAL COMPENSATION EXAMPLES

13

Legislative Audit Requirements

o Met with School and Administrative Department leadership to determine types of payments made to employees

o Ensured that each of these payment types has a corresponding Earnings Code

o Ensured that all earnings codes have a corresponding UMB policy to support their payment

6/7/2010

Our Steps Along The Way…

14

Legislative Audit Requirements

6/7/2010

NEW SUPPLEMENTAL PAY CATEGORIES AND EARNINGS CODES FOR FACULTY

Description Earnings Code UMB Policy

Teaching Overload TOV UMB II-1.25 (A )

Professional Consulting* CON UMB II-3.10 (A )

Continuing Education CED UMB II-1.21 (C )

Lump Sum Grant (MHEC) GLS UMB II-1.21 (C )

Committee Supplement COM UMB II-1.03 (A )

Secondary Staff Employment SEC UMB II-1.21 (C )

Secondary Faculty Appointment, Affiliate

SEA UMB II-1.21 (C )

*Professional Consulting cannot be grant funded

http://cf.umaryland.edu/hrpolicies/

15

Legislative Audit Requirements

6/7/2010

NEW SUPPLEMENTAL PAY CATEGORIES AND EARNINGS CODES FOR EXEMPT STAFF

Description Earnings Code UMB Policy

Secondary Staff Employment

SEC UMB VII-9.11 (A )

Secondary Adjunct Faculty Appointment

SEJ UMB VII-9.11 (A )

16

http://cf.umaryland.edu/hrpolicies/

Legislative Audit Requirements

o Supplemental Payments – Effective June 20, 2010, the Earnings Code SUP will no longer be used

o Any payments to existing UMB employees using Supplemental Pay must now be coded with the appropriate Earnings Code that represents the work to be performed.

o Internal processes within your school/department will not change

6/7/2010

SUPPLEMENTAL PAYMENT CHANGES FOR FACULTY AND STAFF EMPLOYEES

17

Legislative Audit Requirements

6/7/2010

NEW FORMS REFLECTING NEW EARNINGS CODES:

o Supplemental Compensation for Facultyo Increased Responsibilities and Supplemental Payment Request for Exempt Staff

Both new forms allow you to specify an Earnings Code.To be used for all requests as of the beginning of Pay Period 11-01 and forward

18

Legislative Audit Requirements

ALL Additional Compensation Components with Codes

6/7/2010

Additional Compensation Component Earnings CodeSummer Work (10 month faculty) SUM

Teaching Overload TOV

Professional Consulting (Cannot be Grant Funded) CON

Honorarium HON

Committee Supplement COM

Continuing Education CED

Clinical Overload CPP

Lump Sum Grant (MHEC) GLS

Regular/C2 Staff with Secondary Employment SEC

Regular/C2 Staff with Adjunct Faculty Appointment SEJ

Regular Faculty with Secondary Staff Employment SEC

Regular Faculty with Secondary Faculty Affiliate Appointment SEA

19

6/7/2010

SUPPLEMENTALCOMPENSATION

REQUEST FOR FACULTY

20

Procedures for Supplemental Compensation Request for Faculty

Relates to UMB Policy II-1.21 (C ) effective 12/09; Procedure Date 7/1/2010

1. Supplemental Compensation Request for Regular Faculty ("Request") form must be fully approved as indicated by the “Request Type”.

2. Requests for Professional Consulting and Non-MHEC Lump Sum Grants, secondary staff employment (other than administrative appointments) and secondary adjunct appointments must be pre-approved prior to commencement of increased responsibilities.

3. A Request should include a fully completed form and all required attachments:4. To process Approval Request:

a) Pre-approval Required - If the Request requires pre-approval, it should be submitted to FS-Payroll. No Payroll Adjustment Form will be needed for the pre-approval. FS-Payroll will forward the Request to the President or his designee for approval. FS-Payroll will forward all approved and denied Requests back to the paying department. Upon receipt of approved Request, the paying department should inform the faculty member that he/she is authorized to perform the supplemental work as described in the Request.

b) Pre-approval NOT Required - If the Request does not require pre-approval, it can be submitted to FS-Payroll with a Payroll Adjustment Form for processing, provided the Request has all of the appropriate approval signatures. FS-Payroll will forward all Requests to the President or his designee for approval. FS-Payroll will forward denied Requests to the paying department. Payroll will process all approved Requests.

5. To process Payment Request, complete a Payroll Adjustment Form to make payments authorized by an approved Request. Approved Payroll Adjustment Forms should be sent to FS-Payroll with a copy of the approved Request.

6. Payroll will review requests for completeness before processing. Payment Requests may be denied if the documentation submitted does not match the information noted on the Request.

7. Each academic or administrative paying department must maintain accurate records of approval and payments for increased responsibilities payable by supplemental compensation. FS-Payroll will image all approved Requests.

8. All USM and UMB policies related to the additional duties apply, as indicated by the Earnings Code.

6/7/2010 21

• Procedures have been developed for form

• When request form is printed, procedure will print along with request form.

• Pre-approval required before work begins for:

– Faculty Professional Consulting Assignments

– Any Lump Sum Grant Other than MHEC

– Any Faculty Request WITHOUT an existing Earnings Code

6/7/2010

Legislative Audit Requirements

22

Completing New Supplemental Compensation Request Forms for FACULTY

Legislative Audit Requirements

• Review policy related to Earnings Code• Appropriate Earnings Code must be selected• Provide Start and End Dates

• Attach a letter describing the increased responsibilities, including where work is to be performed.

• Indicate Single Task or Multiple Tasks

• Obtain Employee, Paying and Home Department Signatures.

• Submit to FS-Payroll with Payroll Adjustment Form• FS-Payroll obtains approval of President/Designee and

processes request.

6/7/2010 23

Completing New Supplemental Compensation Request Forms for FACULTY

Denied requests are returned to the Department

Legislative Audit Requirements

When to Use Faculty Supplemental Compensation Request Forms

• Used same as today except Pre-Approval required for Professional Consulting, Non-MHEC Lump Sum Grants, and Requests without existing Earnings Code

• Will also be used to pay existing faculty performing secondary Adjunct or Staff jobs

6/7/2010 24

6/7/2010

INCREASED RESPONSIBILITIES AND

SUPPLEMENTALCOMPENSATION REQUEST

FOR EXEMPT STAFF

Form Revised Same Pre-Approval Process

as Required Effective 6/29/09

25

Relates to UMB Policy VII-9.11(A) effective 6/29/09; Procedure Revision Date 7/1/2010 (Replaces Procedure Dated 6/29/09)

1. An Increased Responsibilities and Supplemental Compensation Request ("Request") form must be fully approved by UMB prior to commencement of increased responsibilities.

2. A Request should include the fully completed form and all required documents.3. Request forms should be submitted to HRS-Compensation for review. 4. HRS-Compensation will forward Requests to the President or his designee for approval.5. HRS-Compensation will return each approved or denied Request to the paying administrative or

academic department.6. Upon receipt of an approved Request, the paying department of the affected employee should

inform the employee that he/she is authorized to perform the supplemental work as described in the Request and send an approved copy to the employee’s home department.

7. Complete a Payroll Adjustment Form to make payments authorized by an approved Request. Approved Payroll Adjustment Forms should be sent to FS-Payroll with a copy of the approved Request.

8. Each academic or administrative paying department must maintain accurate records of approval and payment for increased responsibilities payable by supplemental compensation. FS-Payroll will image all approved Requests.

9. Requests that have not been fully approved prior to commencement of increased responsibilities will not be approved. Exceptions may be made only for emergency staffing issues and as approved in advance by the Dean/VP and HRS-Compensation

10. All USM and UMB policies related to the additional duties apply.

6/7/2010

Procedures for Increased Responsibilities and Supplemental Compensation Request for Exempt Staff

26

What is not changing….

• When request form is printed, procedure will print along with request form

• Pre-approval required before work begins

• Authorized signatures are the same

6/7/2010

Legislative Audit Requirements

27

Completing New Increased Responsibilities and Supplemental Compensation Request for Exempt Staff

Legislative Audit Requirements

What is different…• Appropriate Earnings Code must be

selected

• Provide Start and End Dates

• Attach a letter describing the increased responsibilities, including where work is to be performed

• Indicate Single Task/Multiple Tasks

6/7/2010 28

Submit requests approved for payment to FS-Payroll with Payroll Adjustment Form

Completing New Increased Responsibilities and Supplemental Compensation Request for Exempt Staff

Revised Payroll Adjustment Form

Revised Form Includes New Earnings Codes

Appropriate Earnings Code Must Be Selected Consistent with Approved Documentation

Available Now Old Forms Will Not Be

Accepted After Pay Period 10-26

6/7/2010

Payroll Adjustment Form Change

29

Contingent Category I Form Revised for Faculty and Staff

Special Pay Form Revised for Faculty and Staff Contingent Category II Form and Chart

Upgraded Training to be held later in June/early July

6/7/2010

Upcoming Changes for FY2011

30

Questions?

6/7/2010 31