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Policy on Non-Salary and Deferred Compensation for Faculty and EPA Non-Faculty Employees

Policy Statement

This policy sets forth specific definitions and procedures for the payment of non-salary and deferred compensation to Faculty and EPA Non-Faculty employees of the University of North Carolina at Chapel Hill. Any such compensation may only be paid in accordance with the provisions of this Policy and only after receiving the approvals specified herein.

Responsible University Officer: Vice Chancellor for Human Resources
Responsible University Office: Office of Human Resources

I. Definitions and Exclusions

1. Non-Salary Compensation: Non-salary compensation includes, but is not limited to, payment of moving expenses, provision of a motor vehicle or motor vehicle allowance, provision of housing or housing allowance, club memberships, or any other special benefit of monetary value provided to employees for job-related reasons.

2. Deferred or Delayed Compensation: “Deferred” or “delayed” salary or compensation is defined broadly as including, but not limited to:

a. Any payment or contribution by UNC-Chapel Hill or one of its associated entities, whether paid directly to the employee, to the employee’s account or plan, or to a person acting in a capacity similar to a trustee for the employee, and which is paid later than the regular or next subsequent payment cycle.

b. Traditional 457 deferred compensation plans, retirement plans or accounts, annuities, and life insurance that accumulate cash value. This definition includes both tax-qualified and non-qualified plans, and any other similar form of payment, whether tax-sheltered or not.

3. Exclusions from the Definition of Non-Salary Compensation: 

a. Non-salary compensation does not include:

i. Base salary.
ii. Salary supplements for additional temporary, acting, or interim responsibilities.
iii. Lump sum payments for additional duties disbursed promptly upon completion of the work assignment.
iv. Stipends associated with named or endowed professorships.
v. Compensation to correct a payroll error that is promptly disbursed upon discovery.
vi. One-time payment for awards related to recognition programs established and approved by the Chancellor, the Executive Vice Chancellor and Provost, or by the Vice Chancellor for Human Resources or his/her designee and included in the published Office of Human Resources Awards Registry.

b. Items that are required by the University for the express purpose of conducting University business are also not considered “non-salary compensation” and thus are excluded from this Policy. Examples include:

i. Reimbursement of professional or work-related travel expenses, including mileage reimbursement for business use of a personal vehicle, and allowable per-diem meal expenditures.
ii. Payment of required visa-related fees for work authorization of non-resident alien employees.
iii. Provision of equipment to perform the work of the position (even if used at home) including computers, cellular phones, personal data assistants (PDA), pagers and similar work-related items.

II. Audience and Applicability

This Policy applies to all EPA employees at UNC-Chapel Hill – except as noted below:

  1. The Chancellor is exempt from this Policy. UNC Policy 300.2.14, Section C, addresses non-salary and deferred compensation for the Chancellor; UNC Policy 300.1.5 addresses the official residence provided to the Chancellor.
  2. Compensation that is authorized by a faculty practice plan and/or faculty incentive pay plan, approved by the Chancellor and duly reported to the Board of Trustees and Board of Governors, are exempt from this Policy. Other forms of non-salary compensation provided to employees covered by these plans are subject to this Policy.
  3. The Athletic Director and Head Coaches to whom individual employment contracts are issued and approved by the Board of Trustees and Board of Governors are exempt from this Policy, except that non-salary and/or deferred compensation that fall outside of the terms of such contracts are subject to this Policy. These employees are otherwise subject to UNC Policy 1100.3. All other Athletic Coaches are covered by this Policy, whether employed at-will or under term appointments.

III. Reason for Policy

  1. The Board of Governors of the University of North Carolina, through UNC Policy 300.2.14, requires each constituent institution to have a policy on non-salary and deferred compensation for employees who are exempt from the State Personnel Act (“EPA employees”). This Policy implements that mandate and establishes guidelines and procedures for non-salary and deferred compensation for EPA employees at The University of North Carolina at Chapel Hill (“UNC-Chapel Hill”).
  2. Within the parameters outlined below, non-salary compensation may be provided for reasons that are relevant to attracting or retaining faculty and staff of the highest possible quality.
  3. Decisions concerning non-salary compensation shall be consistent with the University’s Policy on Non-Discrimination and not be based in whole or in part on any EPA employee’s protected status.
  4. In accordance with UNC General Administration Policy 300.2.14, this Policy specifies non-salary compensation that is provided to defined categories of EPA employees at UNC-Chapel Hill.
  5. Advance approval by the Board of Trustees is required for any non-salary compensation not specifically authorized in this Policy or that exceeds the specified compensation limits; approval for any deferred compensation not already permitted under UNC policies must be granted by the Board of Governors.

IV. Funding Sources and Tax Reporting

  1. The funding source for non-salary compensation shall not be State-appropriated funds, unless either specifically noted in this Policy or separately approved by the Board of Trustees, and then only when permitted by guidelines issued by the Office of State Budget and Management.
  2. Non-salary compensation may be funded by an associated entity of UNC-Chapel Hill only if permitted by that entity’s policies and if the compensation meets all other requirements of this Policy. Such compensation remains subject to advance review and approval by the applicable University central offices per Section VII of this Policy.
  3. To comply with Internal Revenue Service (IRS) regulations, certain forms of non-salary compensation may require individuals to maintain written records to document business and non-business (i.e., personal) use to ensure appropriate tax withholding and reporting by University Payroll Services. Such records shall be provided by the subject employee when requested by the University.
  4. Employees receiving non-salary compensation are responsible for ensuring their individual compliance with any applicable State and Federal tax laws. Employees should consult with the relevant taxing authority or their personal tax advisor for more information regarding the applicable tax regulations.

V. Types of Non-Salary Compensation

1. Household Moving Expenses

a. Based on available resources, Department Heads have the option to include moving expenses as part of a hiring offer for relocating EPA employees. Not every offer is intended or required to include such provisions, and its inclusion should be based on business necessity to attract well-qualified candidates.

b. In accordance with the State Budget Manual, moving expenses cannot be paid from State-appropriated funds for initial employment. Actual costs of moving standard household goods and personal effects may be paid from non-State-appropriated funds, and requires three estimates in accordance with the State Budget Manual.

c. The Chancellor has issued a standing authorization to supervising Deans to provide moving expenses (up to a designated limit) as part of an initial appointment offer for faculty and non-faculty employees serving within a School/College.

d. The Chancellor has issued a standing authorization to the Athletic Director for moving expenses (up to a designated limit) as part of an initial appointment offer for coaches, assistant/associate coaches, assistant/associate athletic directors, and other EPA instructional athletics staff. 

e. Such delegations and authorization levels may be subsequently changed or updated outside of this Policy, as long as any such change remains in compliance with overarching UNC policy.

f. Household moving expenses for all other EPA employees or in amounts exceeding designated limits must be authorized in advance on a case-by-case basis by the Chancellor, Executive Vice Chancellor and Provost, or supervising Vice Chancellor.

2. House-Hunting

a. Based on available resources, Department Heads have the option to include house-hunting expenses as part of a hiring offer for relocating EPA employees. Not every offer is intended or required to include such provisions, and its inclusion should be based on business necessity to attract well-qualified candidates.

b. The inclusion of house-hunting expenses in a hiring offer must have the approval of the supervising Vice Chancellor, Dean or Athletic Director.

c. The State Budget Manual provides guidance for employee travel and subsistence for the purpose of house hunting with family. This Policy allows for up to three such two-day trips. Such house-hunting expenses related to initial employment cannot be paid from State-appropriated funds.

3. Temporary Housing as Part of Initial Hiring

a. Based on available resources, Department Heads have the option to include temporary housing assistance as part of a hiring offer for relocating EPA employees. Not every offer is intended or required to include such provisions, and its inclusion should be based on business necessity to attract well-qualified candidates.

b. Positions categorized as faculty, senior academic and administrative officers, coaches, assistant/associate coaches, assistant/associate athletic directors, and other EPA instructional athletics personnel may be reimbursed for receipted temporary housing costs as part of the initial hire. This reimbursement cannot exceed $2,500 per calendar month for up to six months, at the discretion of the supervising Vice Chancellor, Dean or Athletic Director.

c. All other categories of EPA employees may be authorized within these same limits on a case-by-case basis by the Chancellor, the Executive Vice Chancellor and Provost, or supervising Vice Chancellor.

d. An EPA employee who does not utilize the entire authorized housing allowance may be permitted (but is not required) by the supervising senior officer to utilize any remaining amount to extend the arrangement for a period not to exceed three additional months beyond their allotted duration. The total of all such expenditures, including any extension, may not exceed the total allowance authorized as part of the hiring offer, nor may any individual monthly reimbursement exceed $2,500.

e. The Chancellor shall have the authority to authorize a housing allowance in an amount up to $3,000 per calendar month and/or a total duration of up to one year under special circumstances, to attract unique or hard-to-recruit talent to the University. 

f. Temporary housing costs that exceed the authorized amount or duration must be submitted on a case-by-case basis for advance review and approval by the Board of Trustees.

4. Temporary Housing and Incidental Expenses as Part of a Remote Duty Assignment

a. Any EPA employee covered by this Policy may be reimbursed for receipted expenses, including temporary housing and other incidental living costs necessary to facilitate a temporary out-of-state or foreign-duty work assignment (e.g., study abroad assignments, remote research stations, etc.), not to exceed $2,500 per calendar month for a period not to exceed one year, with the approval of the Chancellor, the Executive Vice Chancellor and Provost, or the supervising Vice Chancellor or Dean.

b. The Chancellor shall have the authority to authorize temporary housing and other incidental living costs per item 4.a above in an amount not to exceed $3,000 per calendar month and/or a total duration of up to 18 months, when deemed necessary to conduct legitimate University business that is out-of-state or related to a foreign-duty work assignment.

c. Any reimbursements that exceed these limits or duration must be authorized in advance on a case-by-case basis by the Board of Trustees.

d. The payment of any extraordinary dependent educational expenses must be authorized in advance on a case-by-case basis by the Board of Trustees.

5. Ongoing Housing Required by Job Assignment

Lodging or housing provided to an employee as a required condition of employment (e.g., a facility caretaker) or housing provided to resident staff employed by the Division of Student Affairs to work in University residence halls may be permitted with the approval of the Chancellor, the Executive Vice Chancellor and Provost, or the supervising Vice Chancellor or Dean.

6. Vehicle Allowances

a. The Chancellor is authorized (but not required) to provide the use of one leased vehicle, courtesy vehicle, or comparable vehicle allowance to the Executive Vice Chancellor and Provost, any of the Vice Chancellors, and the Director of State Relations for the primary purpose of conducting University business. The annual taxable income value for any non-business use of said vehicle and related operating expenses may not exceed $7,500. 

b. The Athletic Director is authorized (but not required) to provide the use of one leased vehicle, courtesy vehicle, or comparable vehicle allowance to the Assistant/Associate Athletic Directors, Head Coaches, Assistant/Associate Coaches, and Head Trainers for the primary purpose of conducting University business. The annual taxable income value for any non-business use of said vehicle and related operating expenses may not exceed $7,500. 

c. Vehicle allowances for all categories of EPA employees except those listed above, or which exceed any of the specified limits above, must be submitted on a case-by-case basis for advance review and approval by the Board of Trustees.

7. University-Affiliated Club Memberships

a. Positions categorized as Senior Academic and Administrative Officers (SAAO) Tier I, the University’s Deputy Chief Advancement Officer, and the Chief Advancement Officer of each School/College may be provided with individual memberships at any on-campus University-affiliated club for job-related purposes. The Chancellor must approve all such memberships, with the exception of the Chief Advancement Officers of a School/College, which must be approved by the supervising Dean.

b. University departments may hold a “departmental” membership, in the name of the Department Head, for departmental business use only at the University’s institution-affiliated clubs, if such memberships are allowed by club policy. Such departmental memberships must be approved in advance by the Chancellor and/or the applicable Vice Chancellor who oversees the department in question.

c. All personal use of departmental memberships is prohibited. In no case may the funding source for either individual or departmental memberships be State-appropriated funds. 

8. External Club Memberships

a. The Executive Vice Chancellor and Provost and the Vice Chancellor for Advancement may be provided with one external club membership for job-related purposes.

b. Any such club must have a policy prohibiting discrimination against groups protected by federal and North Carolina law.

c. Any University-paid external club memberships provided to other EPA employees or additional University-paid external club memberships provided to the two senior officers noted above must be submitted on a case-by-case basis for advance review and approval by the Board of Trustees.

9. Athletic Facility Memberships

a. The following EPA employees may (but are not required) to be provided paid membership or access to University athletic and physical fitness facilities (as appropriate) for job-related purposes by the supervising Vice Chancellor, Dean or Athletics Director:

i. Individuals who hold academic rank and a primary faculty appointment in the Department of Exercise and Sport Science, and whose primary role is to provide physical education instruction to students.
ii. EPA professionals in the Departments of Exercise and Sport Science, Campus Recreation, and Athletics, whose primary responsibilities involve providing direct physical training to students/athletes and/or ensuring the safety and maintenance of fitness and physical education equipment.
iii. In no case may the funding source be State-appropriated funds. 

b. All other University-paid memberships in health clubs/fitness facilities for all other categories of EPA employees must be submitted on a case-by-case basis for advance review and approval by the Board of Trustees.

10. Campus Athletic and Cultural Events

a. Positions categorized as Senior Academic and Administrative Officers (SAAO) Tier I as well as other EPA professionals whose primary responsibilities include solicitation of donors may be provided with complimentary admission to University-related athletic or cultural events for job-related purposes, including complimentary admission for an accompanying guest, such as a spouse/partner, if the guest is expected to assist in University-related hosting activities.

b. Complimentary athletics event tickets may be provided for coaches and athletics administrators in accordance with a standardized, position-based schedule that is maintained by the Athletic Director and approved by the Chancellor.

c. Ongoing or routine athletics or cultural event complimentary admission provided to any individual or similarly situated group of EPA employees for discretionary (non-business-related) use must be submitted on a case-by-case basis for advance review and approval by the Board of Trustees and must be reported for tax purposes.

i. An exception is permitted for excess single-use tickets to campus events that could not otherwise be sold (and as a result are deemed to have no market value) and will be distributed as occasional employee recognition/appreciation awards by the Chancellor, Executive Vice Chancellor and Provost, or the supervising Vice Chancellor or Dean.

11. Incentive-Based Compensation for Certain Athletics Employees

Incentive-based compensation beyond base salary provided to any EPA employee in the Department of Athletics (other than specific compensation for the Athletic Director and Head Coaches with individual contracts covered by UNC Policy 1100.3), for reasons including, but not limited to, reaching performance goals such as post-season playoffs or student-athlete academic achievement levels, must be approved by the Board of Trustees. Such approvals may be on a case-by-case basis or by a standard schedule proposed to the Board of Trustees by the Athletic Director with the Chancellor’s concurrence.

12. Incentive-Based Compensation for Other Employees

Any form of incentive-based compensation beyond base salary to be paid to any EPA employee in recognition of performance or productivity, except as provided for in this Policy, must be expressly authorized by the Chancellor and the Board of Trustees and conform with any relevant policies and guidelines of the Board of Governors then in effect.

13. Educational Assistance, Dependent Care, and Related Benefits

Any employer-provided benefits in excess of current IRS limits for qualified educational assistance, dependent care, or similar benefit programs must be submitted on a case-by-case basis for advance review and approval by the Board of Trustees, and must be reported to Payroll as taxable compensation on a case-by-case basis.

VI. Deferred Compensation

  1. The State of North Carolina and UNC-Chapel Hill offer employees certain deferred compensation benefits, including voluntary (employee-paid) 457, 403(b), and 401(k) options. Employer contributions to these plans by UNC-Chapel Hill or its affiliated entities are not permitted under UNC policy for employees covered by this Policy.
  2. This Policy does not prohibit regular employer contributions to the State of North Carolina Teachers and State Employee’s Retirement System (TSERS) or the University of North Carolina Optional Retirement Program (ORP) as provided by State law or UNC policy.
  3. Unless expressly approved by the Board of Governors, UNC-Chapel Hill or its associated entities may not provide any other employer-paid, entity-paid, or privately-paid options for deferred compensation to any employee covered by this Policy.

VII. Roles and Responsibilities

  1. All non-salary compensation for EPA employees shall be requested by the supervising Department Head using forms published for this purpose jointly by the Executive Vice Chancellor and Provost and the Vice Chancellor for Human Resources.
  2. Any allowable non-salary compensation shall not be implemented or paid without final approval having been communicated by the Office of the Executive Vice Chancellor and Provost (for Faculty) or the Office of Human Resources (for EPA Non-Faculty) unless otherwise explicitly set forth in this Policy.
  3. Any requests for non-salary compensation that require advance approval by the Board of Trustees or the Board of Governors under this Policy shall be transmitted to the applicable Board(s) with the Chancellor’s concurrence.

VIII. Related Regulations, Statutes, and Related Policies

UNC General Administration Policy 300.2.14, Non-Salary and Deferred Compensation.

IX. Contacts

Subject Contact Phone Email
Faculty non-salary and deferred compensation matters Academic Personnel Office, Office of the Executive Vice Chancellor and Provost 919-962-1091 See Academic Personnel Office web site for specific e-mail contacts
EPA Non-Faculty non-salary and deferred compensation matters EPA Non-Faculty Human Resources unit, Office of Human Resources 919-962-1456 See OHR staff directory for specific e-mail contacts

 

X. Document History

  • Approved By UNC-Chapel Hill Board of Trustees: May 23, 2013
  • Last Revised Date: May 13, 2013               
  • Effective Date:  June 1, 2013

Related Documents

Request for Approval of Non-Salary Compensation

Memo from Chancellor Holden Thorp: Standing Authorization for Household Moving Expense Reimbursements