Original Issuance Date:           January 8, 1976
Last Revision Date:                  May 6, 2019

1. Policy Purpose

The policy describes the process for calculating salaries and fringe benefits to UW System employees.

2. Responsible UW System Officer

Senior Associate Vice President and Chief Human Resource Officer

3. Scope

This policy applies to UW System faculty, academic staff, limited appointees, and university staff.

4. Background

This policy sets forth proper bases to use for calculations concerned with salaries and fringe benefits of employees of the UW System in alignment with UW System Administrative Policy 215 (SYS 215), Payment Methods and Timing for Payroll, and s.109.03, Wis. Stats., which also address pay period assignment and payment issuance.

5. Definitions

Academic basis (“C”): Faculty, academic staff, and limited appointees directly tied to the academic year calendar (273 days or 39 weeks).

Summer basis (“S”): Employment periods between the end of one academic year and the beginning of the next

Annual basis (“A”): Faculty, academic staff, and limited appointees for the fiscal year paid as determined by the calendar month.

Hourly basis (“H”): In addition to university staff who all have an established hourly rate of pay, infrequent appointments for faculty, academic staff, and limited appointees where workloads typically fluctuate and it is not practical to determine a monthly rate of pay.

Lump Sum basis (“L”): Short-term cases where establishing a rate of pay would be inappropriate.

Terminal leave: The payout of accumulated leave balances when employees cease their employment.

6. Policy Statement

Employees are compensated in accordance with this policy. Employees are eligible for benefits based on the appointment type, time base of the appointment (FTE), and the length of the appointment(s) (duration).

Generally, hourly basis (H) employees are paid biweekly for all compensable time worked and reported during the prior two week pay period. Academic (C), Summer (S), and Annual (A) basis employees are paid monthly, typically on the first of the month, for work performed during the previous pay period. Payroll calendars are established annually which outline the default designated workweek for purposes of the Fair Labor Standards Act (FLSA). Different workweeks may be established for different employees or groups of employees.

The amount of the monthly pay rate for faculty, academic staff and limited appointees each pay period shall be the same regardless of the number of days in the pay period.

  • For academic year faculty, academic staff and limited appointees, a payroll calendar defining the pay periods within the academic year calendar shall be established annually for each institution.
  • For annual faculty, academic staff and limited appointees, the pay period shall be the calendar month.

A. Constraints

In addition to this policy, calculations of salaries and fringe benefits are subject to the following rules and regulations:

B. Calculation of Monthly Rate of Pay

Regular faculty, academic staff, and limited appointees monthly payroll payments are generally issued on the first of each month (refer to SYS 215, Payment Methods and Timing for Payroll, for exceptions). Under the regular payroll schedules, the payment is for services rendered during the preceding pay period.*

For full-time employees, the monthly rate of pay equals the annual/academic year contract salary rate (if the position is budgeted, this is the budgeted rate) divided by the number of months associated with the pay basis and payroll schedule. Examples follow.

Pay Basis Annual Contract Salary Rate Number of
Months
Monthly
Rate of Pay
A (annual basis) $36,000 12 $3,000
B (academic basis) $36,000 9 $4,000

Full-time, one-semester faculty, academic staff and limited appointees should receive 4.5 months of pay. The payroll calendars should be constructed so that the one-half month paid after the end of the fall term or in the beginning of the spring term will equal 50% of the Monthly Rate when applying the Partial Pay Period Rules in Section 6.C., below.

The Monthly Rate of pay for part-time faculty, academic staff and limited appointees is the full-time rate prorated for the part-time percentage (FTE).

The Monthly Rate is rounded by carrying the result out to three places and then rounding up to the next whole cent. Example: .003 equals one cent. (In the above discussion, one month equals one pay period.)

* Other pay periods have been grandfathered in or approved as exceptions.

C. Payment for Partial Pay Periods and Leaves of Absence

University staff are paid for actual hours worked during the pay period. When faculty, academic staff, and limited appointees begin employment after the beginning of a pay period or end employment before the end of a pay period, their partial salary shall be determined on the basis of calendar days in the pay period. The partial salary calculations are also used when a leave of absence begins in the middle of a payroll period and ends in the middle of a subsequent payroll period. The payroll calendar for each particular institution shall be used in determining partial payments in accordance with the following methodology:

  • (Monthly Base Salary / by number of days in the pay period) x days to be paid = amount to be paid for partial month

Examples:

  • A new employee on an annual (calendar year) pay basis of $36,000 begins employment on March 17 ($3,000 earnings per month). Partial payment for March is calculated as follows:
    • $3,000 / 31 = $96.78* x 15 = $1,451.70
    • *Any number three places to the right of the decimal is rounded up to the next cent.
  • To determine the pay for an employee returning from a leave of absence on March 17, use the same calculation shown above.
  • An employee who begins a leave of absence effective March 17 would be calculated as follows:
    • $3,000 / 31 = $96.78 x 16 = $1,548.48

D. Summer Payments

Persons employed on an academic year basis shall be compensated for additional assignments during the summer session at the rate up to the equivalent of 2/9 of the previous academic year salary rate for a full work load for an eight-week summer session. All summer payments, whether summer session and/or summer service, are counted in the 2/9 rule. If the institution determines that there are differences in summer session work load from a full-time work load, then an appropriate compensation level shall be established. (Additional employment periods during the summer may be determined by the institution.) Compensation received in the summer period may not in aggregate exceed 2/9 of the academic year salary of the person appointed unless an explicit exception is granted by the Chancellor or designee, regardless of source of funds.

Effective July 1, 2013, per s.16.417(2)(f), Wis. Stats., the overload cap that applies to state employees does not apply to employees of the Board of Regents of the University of Wisconsin System unless the compensation received is from a non-UW state employer. See HRD Overload and UPS Operational Policy TC3: Compensation.

E. Calculation of Overload Payments

UW System allows most employees (excluding Student Hourly) to work up to, but not beyond, 100 percent time. The salary received by full-time faculty, academic staff, FLSA exempt university staff, and limited appointees is considered to be full compensation for all work during the period of appointment. faculty, academic staff, FLSA exempt university staff, and limited appointees are expected to expend the total effort necessary to complete their assignments without additional compensation. The chancellor or designee may approve increased compensation in the form of an overload payment in cases where a temporary assignment is undertaken at another UW System institution, or an individual is asked to assume additional short-term responsibilities.

However, on occasion, an employee may be asked to perform duties outside of normal work assignments. In these extraordinary circumstances, an overload request – identified as employment beyond 100 percent – may be approved if the need for additional compensation can be sufficiently demonstrated.

Overload payments may be subject to limitations imposed on a calendar year basis as outlined by SYS 165, Academic Year Definition And Assorted Derivatives, UPS Operational Policy TC3: Compensation (all institutions except UW-Madison), and HRD 11.02: Overload (UW-Madison), and s.16.417(2), Wis. Stats. Violations of s.16.417(2), Wis. Stats., must be repaid by the employee.

F. Pay Basis Conversions for Monthly Staff

When a monthly faculty, academic staff, limited or other appointment is converted from one pay basis to another, the following calculations shall be used:

“A” to “C” = Rate * (9/11)

”C” to “A” = Rate * (11/9)

“A” to “H” = Rate / 2080

“H” to “A” = Rate * 2080

“C” to “H” = Rate / 2080 * (11/9)

“H” to “C” = Rate * 2080 * (9/11)

The conversion denominator of 11 takes into consideration the one-month vacation granted annual appointments. The Hourly or Monthly Rate is rounded by carrying the result out to three places and then rounding up to the next whole cent.

G. Salary Advances for Academic Year Faculty

Institutions may offer new academic year faculty employees a salary advance to cover living expenses during the first month of employment. Advances of up to 35% of one month’s gross pay may be granted. Generally, a salary advance is granted when the employee’s start date is more than 28 days from the employee’s pay date. A repayment agreement must be signed by the employee prior to the advance being made. (Salary Advance Request and Payroll Deduction Form can be downloaded.) Salary advances are to be repaid in full via payroll deduction from the employee’s first regular payroll payment.

  1. New C-basis employee submits a Salary Advance Request and Payroll Deduction Form through appropriate institution channels.
  2. Information is provided by the institution to the UW Service Center during the annual process information request.
  3. In coding the expenditure, the institution may use any chart field string it chooses, but must use ACCOUNT 6160 (“Salary Advances”).
  4. Institution’s Human Resources Office enters a one-time payroll deduction for “Salary Advance Repayments” on the employee’s first regular payroll.
  5. The Payroll Calculation will result in a one-time payroll deduction and produce an Inter-Unit Journal (IUJ).
  6. The Institution’s Business Office will reconcile all Salary Advances issued against repayments to ensure compliance with UW policies.

H. Calculating Wisconsin Retirement System Service Credit

For full-time faculty, academic staff, and limited appointee employees, 22 days, or 176 hours, of work per month shall be reported to the Wisconsin Retirement System (WRS). One year of creditable service is equal to 1,320 hours except for employees in the executive retirement plan where it is equal to 1,904 hours.

For part-time faculty, academic staff, and limited appointees, the number of hours to be reported to the WRS is determined by the relationship of the employee’s gross pay for the month to the full-time rate that the employee would have received if a full-time employee. For example, a 0.5 FTE employee would have half as many hours reported as a 1.0 FTE employee. University staff hours are reported to the WRS according to the hours in pay status reported on payroll.

Periodically employees are paid on a Lump Sum basis (“L”) for short-term or special project assignments, where payment based on an hourly rate of pay is impractical. For purposes of tracking potential WRS creditable service, hours need to be assigned to the lump sum payments as required by s.40.22(2m), Wis. Stats., and s.40.22(3), Wis. Stats. [1]

At the beginning of each fiscal year, an hourly rate will be determined which shall be used when there is not an active position in a similar capacity or another reasonable method to access hours worked for a lump sum payment. For academic staff employees, this rate will be based on the average monthly salary for academic staff, using the calculations identified in Section 6.F.

I. Sick Leave Conversion Value

As required by Wis. Admin Code ETF 10.01(1m), in determining the hourly rate of earnings for computing the value of accumulated sick leave for faculty, academic staff, and limited appointee employees upon retirement, terminal leave, layoff or death, the highest monthly full-time rate of pay shall be divided by 174. (See Section 6.B to calculate the monthly rate of pay.)

The hourly basis employees (H), the highest hourly rate of pay where sick leave was earned is used to calculate the value of accumulated sick leave.

J. Leave of Absence Without Pay

The same methodology outlined in Section 6.C, should be used in cases of leave of absence without pay for faculty, academic staff, and limited appointees. For university staff, their current hourly rate should be used to calculate appropriate deductions for leaves of absence without pay. Deductions shall not be made from an exempt staff member’s salary for time off of less than one full work day.

K. Calculation of Vacation upon Termination/Transfer or Overdrawn Leave Credits

For university staff, their current hourly rate should be used to calculate lump sum payments of accrued vacation and any overdrawn leave amounts that must be repaid.

When it is determined that a lump sum payment of accrued vacation is appropriate for faculty, academic staff and limited appointees, it will be calculated as follows:

  • Full-time monthly rate / 22 days (176 hours) x number of days of accrued unused vacation = lump sum payment

The same calculations should be used to determine any overdrawn leave to be repaid.

L. Calculation of Terminal Leave

Effective July 1, 2016, the University will charge a leave benefit rate at the time annual leave is earned and record the leave benefits as a liability. Terminal Leave rate will be charged on all funding strings associated with salary payments. An institution pooled account will house lump sum funds until the unused leave benefits are paid out.

When employees leave and lump sum terminal leave payments are made, the Service Center will charge the salary and related fringes to the institutions terminal leave pool department. See SFS Accounting Manual, Category: General Ledger – Allocations.

[1] For purposes of reporting under the Affordable Care Act, a daily equivalency of 8 hours for each work day during the payroll period will be used in absence of actual hours reported for payments of lump sums to employees.

7. Related Documents

16.417(2), Wis. Stats., Dual Employment or Retention
16.417(2)(f), Wis. Stats., Dual Employment or Retention
HRD 11.02 Overload
UPS Operational Policy TC3: Compensation
UW System Administrative Policy 165 (SYS 165), Academic Year Definition And Assorted Derivatives
UW System Administrative Policy 215 (SYS 215), Payment Methods and Timing for Payroll
HRD 11.02: Overload (UW-Madison)
40.22(2m), Wis. Stats., Participating Employees
40.22(3), Wis. Stats., Participating Employees
SFS Accounting Manual, Category: General Ledger – Allocations

 8. Policy History

Revision 7: May 6, 2019
Revision 6: December 1, 2004
Revision 5: October 13, 1997
Revision 4: September 1, 1994
Revision 3: April 16, 1992
Revision 2: March 23, 1976
Revision 1: January 8, 1976

9. Scheduled Review

May 2024