Base Pay and Merit Increases Clause Samples
The 'Base Pay and Merit Increases' clause defines how an employee's initial salary is set and outlines the process for potential future salary adjustments based on performance. Typically, this clause specifies that employees will receive a predetermined base salary, and may be eligible for merit-based increases, which are often awarded following performance reviews or at set intervals. Its core function is to provide transparency regarding compensation structure and to incentivize strong performance by linking pay increases to merit.
Base Pay and Merit Increases. (A) As the result of a labor/management partnership, the parties developed a new pay plan effective December 5, 2004. The CWA pay plan is based on the pay structure and classification assignments to pay grades as set forth in Appendices A and B. A three percent (3%) percentage base increase (PBI) will be effective the pay period including April 24, 2017; a three percent (3%) PBI will be effective the pay period including April 24, 2018; and a three percent (3%) PBI will be effective the pay period including April 24, 2019.
(B) Step X is a compensation mechanism used to accommodate a specific set of circumstances in which an employee’s pay rate may exceed the pay grade maximum for his/her classification. It authorizes the employee’s current base pay rate to be continued when it exceeds the maximum of the pay grade until the point in time that the pay grade increases enough to include the employee’s base pay rate. Those circumstances may include:
(1) The pay grade assignment for a classification is changed as a result of market analysis conducted by the Department of Human Resources, and in negotiation with the Union, and the employee’s pay rate exceeds the new pay grade maximum; or
(2) Any Civil Service Commission action which creates a reallocation to different classifications that results in the incumbent(s)’ current pay rate(s) exceeding the new pay grade maximum.
(3) While in Step X, the employee continues to be eligible for PBIs and merit increases consistent with 17.1(G) as provided by this Agreement, but the increase must be in the form of a lump sum payment as provided for in Section 17.1(C)(3), and may not be added to the base pay.
(C) Under no circumstances may an employee's base pay be adjusted above the pay grade maximum, nor below the pay grade minimum, in the employee's pay grade as set forth in Appendix A.
(1) Employees who are currently in Step X will continue to be eligible for PBIs and merit increases in the form of a lump sum payment and may not be added to the base pay.
(2) Employees who are at or near pay grade maximum are eligible for PBIs and merit increases, but their base increases will be limited to the amount that moves their pay to pay grade maximum. The remainder of the percentage increase will be paid in the form of a lump sum payment as provided in (3) below.
(3) The above-referenced lump sum payments will be calculated as follows: Such lump sum payment will be based on the employee’s hourly rate multiplied by 2,080 hours (1,0...
Base Pay and Merit Increases. (A) The CWA pay plan is based on the pay structure and classification assignments to pay grades as set forth in Appendices A and B.