The UNC Policy Manual
300.2.14
Adopted 09/08/05
Amended 06/09/06
Amended 01/16/15
Technical Corrections
09/22/21
Amended 11/17/22
Amended 01/25/24
Policy on Non-Salary
and Deferred Compensation
I.
Non-salary Compensation
A.
Irrespective of the campus’ status regarding
management flexibility in personnel, all constituent institutions and the UNC
System Office shall have a policy concerning the granting of non-salary
compensation for all personnel exempt from the North Carolina Human Resources
Act except for the chancellor and the president. The policy shall (i) provide specified non-salary compensation to a defined
category of employees uniformly or (ii) require appropriate approval – by the
board of trustees, Board of Governors, chancellor, or president, as applicable
and as provided in this policy – regarding non-salary compensation granted to
an individual employee before non-salary compensation is provided.
B.
Each policy that provides specified non-salary
compensation to a defined category of employees shall set out what types of
non-salary compensation the campus or UNC System Office will provide, and the
criteria for awarding such compensation. The awarding of non-salary
compensation may be based on any reason or reasons considered relevant to
attracting or retaining faculty and staff of the highest possible quality.
Decisions concerning non-salary compensation shall not be based in whole or in
part upon any of the protected statuses included in Section 103 of The Code.
C.
The funding source for non-salary compensation
shall not be state funds, and non-salary compensation may be provided directly
by an associated foundation if permitted by policy. An exception permitting non-salary compensation to be funded from
state funds may be approved by a board of trustees or the Board of Governors
only when permitted by the Office of State Budget and Management (OSBM). Any special
campus services or benefits or club membership for an employee must be job
related, and the club must have a policy prohibiting discrimination against
groups protected by federal and North Carolina law. Non-salary compensation
shall be appropriately reported to federal and state tax agencies.
D.
The hiring approval process may include payment
of moving expenses in accordance with authority from the Office of State Budget
and Management. The decision of whether to approve payment of moving expenses
in an employment offer for an employee who is not included in an established category
of employees who are provided compensation for moving expenses may be delegated
no lower than the provost/vice chancellor level or vice president level.
E.
The following items are permissible and are not
considered “non-salary compensation” for purposes of this policy: (i) Provision of housing, when occupancy of the housing is
required as a part of the job; (ii) reimbursement of professional- or
work-related travel; and (iii) provision of materials and equipment to perform
the work of the position, even if used at home, including computers, monitors, mobile
phones, tablets, and similar work-related items.
F.
Sign-on, Retention, and Performance-Based Bonus
Compensation Programs.1 The Board of Governors delegates authority
to the constituent institution boards of trustees to administer sign- on,
retention, and performance-based bonus programs for SAAO, faculty, and EPS
employees. Equivalent authorities are granted at the direction of the president
to administer such programs for UNC System Office SAAO, faculty, and EPS employees.
1.
A sign-on bonus may not exceed the lesser of $25,000 or
20 percent of the annualized base salary of the new position without seeking
the approval of the president or the president’s designee.
2.
A retention bonus may not exceed the lesser of $25,000
or 20 percent of the employee’s current base salary without seeking the
approval of the president or the president’s designee.
3.
Performance-based bonus compensation awarded through
this policy in a single fiscal year that exceeds 20 percent of an individual
employee’s current base salary and $50,000 must receive approval from the
president and the Committee on University Personnel of the Board of Governors.
4.
An employee may receive either a sign-on bonus or a
retention bonus, but not both, within any 24-month period. The award of
performance-based bonus compensation shall be administered independently from
any sign-on or retention bonus program and shall be tied to an annual
performance review for non-faculty employees and to the provisions of a written
incentive compensation plan for covered faculty. Performance- based pay for
clinical faculty is subject to the relevant approved clinical incentive pay
plans and is exempt from these provisions. When applicable, and in accordance
with Executive Retirement Plan documents, performance-based bonus awards for
Plan-eligible employees may be directed to an executive retirement plan
administered by the UNC System Office, in lieu of a cash payment.
5.
The boards of trustees may delegate authority to
approve sign-on, retention, and/or performance-based bonuses to the chancellor
and/or chancellor’s designee(s) with the exclusion of such bonuses for SAAOs,
which may not be delegated. For employees of the UNC System Office, the
president has authority to approve sign-on, retention, and performance-based
bonuses, including such bonuses for SAAOs and EPS employees.
6.
Institutions may establish rules to require an employee
to pay back all or part of sign-on or retention bonus payments already received
if the employee separates from the institution fewer than 12 months after
payment of the bonus award.
7.
Bonuses may be provided using either state funds or
non-state funds. For state funds, such use must be permissible under the
policies of OSBM.
8.
Institutions must establish specific procedures for
reviewing and monitoring sign- on, retention, and performance-based bonuses.
9.
Institutions may adopt additional supplemental policies
and procedures surrounding sign-on, retention, and performance-based bonuses,
provided such policies do not conflict with this Policy and are consistent with
applicable state or federal law.
10.
The president may establish guidelines for periodic
reporting on these bonus compensation programs.
II.
Delayed or Deferred Salary/Compensation
A.
The State of North Carolina and the University
of North Carolina System offer employees options for deferred compensation and
insurance. Unless expressly approved by the Board of Governors, constituent
institutions and the UNC System Office may not provide any other employer-paid
options for deferred compensation or other delayed compensation to its
employees.
B.
For purposes of this policy, delayed and
deferred salary or compensation shall be broadly defined to include, but are
not limited to, any employer payment or contribution paid (1) directly to an
employee, (2) to the employee’s account or plan, or (3) to a person acting in a
capacity similar to a trustee for the employee, which is paid later than the
regular or next subsequent payment cycle, except for an error that is promptly
corrected upon discovery. Delayed and deferred salary/compensation also includes
traditional 457 deferred compensation plans, any retirement plans or accounts,
annuities, and life insurance accumulating any cash value. Delayed and deferred
compensation also include both tax qualified and non-qualified plans, and any
other similar form of payment, whether tax sheltered or not.
C.
This policy does not prohibit a campus from
making any permitted employer contribution to the Optional Retirement Program
or the Teachers’ and State Employees’ Retirement System.
III.
Non-Salary or Deferred Compensation of
Chancellors and President. Other than a state-provided
car or a car of comparable
value, a chancellor’s or the president’s residence as provided for in Section 300.1.5
of the UNC Policy Manual, work related club memberships, reimbursement of
moving expenses upon initial employment as a chancellor or president, and
benefits uniformly provided to all employees exempt from the North Carolina
Human Resources Act, only the Board of Governors may approve non- salary or
deferred compensation for a chancellor or the president. The funding source for
non-salary compensation for a chancellor or the president, other than that
specified in this paragraph, shall not be state funds, but an exception may be approved by the Board of Governors. Club
memberships may never be paid using State funds.
IV.
Employees Exempt from this Policy. Members of
faculty medical practice plans, such as physicians, dentists, and
veterinarians, are exempt from this policy. Athletic directors and head coaches
remain subject to Section 1100.3 of the UNC Policy Manual and are exempt from
this policy.
V.
Review and Approval. Campus policies on
non-salary and delayed/deferred salary/compensation must be submitted as a part
of the campus request for management flexibility to appoint and fix
compensation. Campuses already granted management flexibility in personnel
shall submit their policies to the UNC System Office for review. Subsequent
changes to the policies must be submitted for review by the UNC System Office
prior to submission to the campus board of trustees for approval. In some
cases, policies with extensive revisions will be reconsidered by the Committee
on University Personnel of the Board of Governors.
VI.
Other Matters
A.
Effective Date. The requirements of this policy
shall be effective on the date of adoption of this policy by the Board of
Governors.
B.
Relation to State Laws. This policy is meant to
supplement, and does not purport to supplant or modify, those statutory
enactments which may govern or relate to the subject matter of this policy.
C.
Regulations and Guidelines. This policy shall be
implemented and applied in accordance with such regulations and guidelines as
may be adopted from time to time by the president.
1 See May 26, 2022, Resolution of the Board of Governors
of The University of North Carolina System “Delegated Authorities Regarding Non-Base Salary Compensation for
University Employees Exempt from the State Human Resources Act.” Cf. Section 300.2.14.2[R].