SUBJECT:  Proposed 2000-2001 Staff Salary Plan

The 2000-2001 California state budget includes funding for regular salary merit increases and range adjustments for UC staff, and a special augmentation for additional salary increases primarily for lower paid employees. Both increases are intended to be effective October 1, 2000. Actual salary increases for UC staff covered by collective bargaining agreements must be negotiated before they can be implemented. The University is proposing the following 2000-2001 salary distribution plan for UC staff.

Regular merit increases for employees in merit-based pay plans are funded in the budget by a combination of range adjustment (2%) and merit (1.5%) funds. The fund pool for these increases is approximately 3.5% effective October 1, 2000. The salary range minimums and maximums for positions in merit-based pay plans generally would be increased by 2% effective October 1, 2000. The University also proposes that the regular October 1 range adjustment for employees in flat-rated or step-based pay plans would be 2%.

In addition to the regular range plus merit funding, the University also received a special state budget augmentation of $19 million for salaries of state-funded staff employees and those non-Senate academic employees who are not eligible for the faculty market-based parity adjustment. Consistent with the Governor's intent, this funding is to be used primarily to improve the compensation of lower paid employees. Although the definition of "lower paid" was not specified in the state budget, the University is currently considering an initial definition that may be based on UC's median salary level. The University proposes that employees earning below the lower paid threshold would receive a greater percentage increase from the augmentation than those earning above the threshold. Employees will be treated the same, regardless of fund source.

Consistent with the intent of the Legislature, none of the additional state-funds would be used for highly compensated employees. The IRS currently defines "highly compensated" as those earning a base pay level of $80,000 or above, and the University is considering that salary level as the upper limit for the distribution of the additional funding.

Because the salaries of many clerical employees lag the market significantly, the University is interested in using a portion of the $19 million state budget augmentation to further improve the salary program for clerical employees.

Further information on the exact distribution of these additional state funds will be available as soon as details are determined. The process is complex due to the necessity of balancing employee needs, State expectations, the collective bargaining process, and the availability of funds.

Funding for non-base building staff incentive awards will continue to be available for 2000-2001 awards.

As stated earlier, salary actions for exclusively represented UC staff are subject to the terms of existing collective bargaining agreements or to meeting and conferring in accordance with provisions of the Higher Education Employer-Employee Relations Act (HEERA), as appropriate. Unions have been apprised of the University's understanding regarding the intended distribution of the additional $19 million, and bargaining concerning that distribution is either in progress or will begin soon.

Campus employees with questions or comments may contact Judy Johnson, Compensation Manager, via electronic mail jjohnson@ucsd.edu, or via telephone (858) 534-0986. UCSD Healthcare employees may contact Ann Skinner, Director, Healthcare Human Resources, via electronic mail at askinner@ucsd.edu or SYSM Code: AMR1 or by phone at (619) 220-5089.

                                                Rogers Davis
                                                Assistant Vice Chancellor
                                                Human Resources