U.Va.’s minimum hourly pay rate jumps to $9.37
By Brevy Cannon
The University’s minimum hiring rate will jump from $8.88 per hour to $9.37 per hour in response to a market study that found rising entry-level wages in the Charlottesville area, President John T. Casteen III announced on March 7.
The change applies to all University classified salaried and classified wage employees in the Academic Division (including UVaTEMPS), effective March 25, and all Medical Center employees, effective March 12. More than 375 employees will receive the raises, 140 of whom work at the Medical Center.
The University began adjusting minimum wage rates to Charlottesville prevailing wages in 2000 when a survey of local and regional market salaries supported a minimum hiring rate of $8.19 per hour, well above the rate ($5.15 per hour) required by federal law. Since 2000 the minimum hiring rate has risen according to state-approved classified salary increases. Even though the state froze employees’ base salaries in 2001 and 2002, by December 2005 U.Va.’s minimum pay rate was $8.88 per hour, which exceeds the federal minimum wage by 72 percent and the state classified minimum wage ($6.83 per hour) by 30 percent.
For the past three years and going forward, the Board of Visitors has allocated $250,000 each year in addition to funds from the state for strategic base salary adjustments for classified employees. These funds have benefited employees whose salaries, indexed strictly to the state budget, lag behind market rates. For the past six years, the University has awarded altogether some 3,853 in-band salary adjustments, totaling nearly $12.5 million, in recognition of superior individual job performance. In addition, individual departments have funded rewards and recognition bonuses (including both monetary bonuses and paid days off) for superior performers. Those have totaled more than $1 million and nearly 2,150 days off to eligible employees. The Board of Visitors also has provided $200,000 from tuition increases to fund bonuses under the state Reward and Recognition Plan.
Recent market surveys indicate that entry-level wages in the Charlottesville area, driven by the increasing local cost of living, have risen more rapidly since 2000 than state-approved U.Va. pay increases. Consequently, the increase to $9.37 per hour was needed to bring U.Va. minimum wages in line with local prevailing entry-level wages, Casteen said.
At the same time, the University’s benefits package, which includes health insurance and retirement benefits, adds another $3.29 per hour to the $9.37 rate. That means the lowest paid employee at the University will receive $12.66 per hour in total compensation.
Calculations indicate that on July 1 (the start of fiscal year 2006-2007), the value of fringe benefits will rise to $3.45 per hour, which will bring total compensation to $12.82 per hour.
In his statement on competitive compensation, Casteen emphasized that the University, as a state agency, does not have the legal authority to impose minimum wage rates for employees of private vendors and contractors. Casteen noted that, over time, some contractors have adopted the University’s wage rules, while others have not. None has done so because we have determined what they must pay, he said.
University legal counsel has determined that only new legislation would allow the University to dictate contractors’ salary policies, Casteen explained. To ensure that this interpretation of Virginia law is correct, the University has begun the process of requesting advice from the Attorney General.
“The University of Virginia values all of its employees and its contractors’ employees and respects the work done by all who contribute to teaching, research and public service here,”
Casteen said. “They deserve the best compensation we can provide consistent with the law and relevant market conditions. They deserve to be rewarded individually for superior performance. The University’s turnover rate for the past three years has ranged from 8 percent to 10 percent, while the industry standard for turnover was between 17.4 percent and 19.8 percent. We will maintain the University as the best place to work in Central Virginia.”