Examples that Illustrate Appropriate Methods of Payment

Supplemental Compensation/Additional Payment for Additional Work

A group of exempt employees worked on a critical, deadline-driven team project, putting in many extra hours in a short period of time. An Additional Payment is paid to exempt employees putting in excessive hours for a short period. This is a non-discretionary payment because it represents payment for hours worked.

A supervisor takes a medical leave. One of the supervisees takes over a significant portion of the higher-level position for a short period of time. An Additional Payment is paid to an employee with a temporary change in assignment (more than three weeks) during regular work hours that requires a higher level of education, experience, or skill. This is a non-discretionary payment because it represents payment for a higher level of work.

Off-Cycle Base Salary Adjustment

An employee is paid $30,000 and the department has hired a new employee into a similar position who is not as well qualified as the existing employee, but market forces them to pay $33,000 to the new employee. An off-cycle base salary adjustment allows the department to make an equity adjustment and increase the salary of the existing employee, retroactive to the day they hired the new employee. This is a non-discretionary payment because it represents an equity payment for similar work.

Bonus

A supervisee quits in the middle of a critical project. The supervisor gets the project done on time. A bonus would enable the department to recognize the supervisor’s extraordinary contribution in the completion of the critical project. (An Additional Payment would not recognize a supervisor working temporarily at a lower level, but would recognize excessive hours the supervisor worked if that was part of the solution.) The bonus is discretionary because it recognizes an employee’s extraordinary contribution above and beyond the amount already paid for the actual work.

A department is missing a director during a prolonged search. The department employees manage to get the work done with the help of one employee who is serving as the interim director. A bonus would enable the interim director to recognize employees for their extraordinary contributions in getting the department through a difficult transition period. (The interim director would receive an Additional Payment as supplemental compensation for work performed at a higher level.) The bonus is discretionary because it recognizes an employee’s extraordinary contribution above and beyond the amount already paid for the actual work.