Labor Market Adjustment Reserve

Dear Colleagues,

We are pleased that the North Carolina General Assembly has funded a Labor Market Adjustment Reserve with the recently passed state budget. The LMAR is a pool of funding to address compression and market-related salary issues for SHRA and non-faculty EHRA staff positions.

Each institution received funding equal to one percent (1%) of the institution’s state-appropriated salaries and associated benefits. Charlotte received $2.3 million (exclusive of benefits) to use for employee salary and related fringe benefit costs.

The funds come with very specific guidelines and requirements for implementation:

• The funding is primarily to be used to address lower paid employees and some specific labor market needs. It cannot be used for performance increases or for the majority of employees. By statute no more than 25% of our state funded positions can receive an increase from LMAR funding.
• LMAR increases cannot exceed the greater of fifteen thousand dollars ($15,000) or fifteen percent (15%) of an employee’s base salary as of the effective date of the adjustment.
• LMAR increases cannot result in a salary exceeding the maximum of the salary range associated with the position.
• Any employee receiving an adjustment must be in good standing (e.g., satisfactory performance appraisal, have no active disciplinary action, etc.); employed by the University before September 1, 2022; and employed at the time of implementation.

Determination of increases

Human resources used workforce data to assess salary compression needs across campus and determine critical labor market needs of the University. SHRA employees below market reference rates and EHRA non-faculty staff below the 50th percentile of their ranges were the first priority for LMAR allocations.

The next priority was increasing target market rates for most SHRA employee classifications and allocating LMAR to move SHRA employees to those new rates.

Finally, the LMAR was used for addressing specific areas of high turnover among academic advisors and allocating funding to vacant positions to avoid future compression problems for new hires.

Next steps and notifications

Human resources has finalized recommendations and provided them to divisions and cabinet leadership for review. After divisional review, HR will finalize LMAR adjustments by mid-October and implement for processing in the Oct. 31 payroll. LMAR adjustments will be retroactive to July 1, 2022, for most employees employed by the University as of that date. Employees receiving an adjustment, and their respective managers, will be notified by human resources via email.

Employees paid from non-state fund sources

While LMAR funding is restricted to employees whose positions are state funded in whole or part, Human Resources used the same methodology to identify compression and market-related salary issues for non-state-funded employees. Divisions and departments with non-state-funded positions will participate in similar market-related adjustments from local funding with the same process identified above including timeframe of implementation.

Faculty

While faculty are not part of the LMAR, the University has identified $615,000 (exclusive of benefits) in institutional funds to allocate for a similar analysis of faculty positions that are characterized by significant market compression or challenges in retention. The Office of Academic Affairs will distribute faculty salary spreadsheets to the colleges no later than Monday, Oct. 3. Colleges will need to return their recommendations by Oct. 10. Full-time faculty, both tenure track and non-tenure track, are eligible for consideration. Our goal is to complete the process for inclusion in the Oct. 31 payroll.

Your interest in this subject and patience is appreciated as we carefully work through the distribution of available LMAR and local funding consistent with the legislative and UNC System intent.

Thank you,
Gary Stinnett
Associate Vice Chancellor for Human Resources