Supplemental Compensation Policy
Authority: Academic Affairs and Enrollment Management
Date Enacted or Revised: January 11, 2012; Revised June 2016; October 2019; July 2020; March 17, 2022
Supplemental compensation may include pay to University employees for conducting work arranged and paid through external agencies or grants or for conducting specialized work outside of normal duties paid through sponsored programs or entities external to the University. Supplemental compensation in this policy does not refer to overtime work in which an employee performs work related to normal duties beyond the 40-hour work week. Work above the normal 40-hour work week is generally compensated by compensatory leave if an employee is eligible to earn compensatory leave.
Faculty who work on a nine-month appointment may follow work hours that are outside the usual 8:00 a.m. to 4:30 p.m. work schedule. Teaching courses to meet student needs may call for flexible schedules and may include weekends, evenings, or other non-traditional schedules. Faculty may engage in extra service or work activities for supplemental compensation provided the activities do not conflict with scheduled or assigned duties such as teaching, student support hours, committee work, University service, or scholarly productivity.
This policy is consistent with federal and state regulations and statutes. The policy addresses instances in which the faculty member provides services above the regular full-time workload and outside of hours scheduled for the assigned workload. For such additional work, the faculty member is paid through the University and benefits are deducted from the pay. Twelve-month faculty or staff may perform work for supplemental compensation provided the work is performed outside of normal work hours and the work activity is different from the employee’s normal tasks.
Work for Supplemental Compensation Must Not Interfere/Conflict with Assigned Workload and Responsibilities
The work for which supplemental compensation is paid must not interfere or conflict with regular University duties and must be approved in advance through the University’s administrative processes. Faculty or staff cannot receive supplemental compensation for work that has already been compensated by University sources or when conducting work related to assigned University responsibilities. The forms below must be completed for prior approval and payment of supplemental compensation:
Supplemental Compensation Charges and Payments
Departmental budgets or other designated funds intended to pay supplemental compensation shall bear all costs associated with the supplemental compensation, including employer contributions for employee benefits, such as retirement and Medicare.
To estimate the total amount to be charged, the Estimate of Compensation section of Form A must be filled out completely. Incomplete forms will be returned without action by the payroll office. Under the Estimate of Compensation section, the Estimated Gross Payment Amount to Employee, line one, represents gross pay for the employee who is earning the supplemental compensation. Line four indicates the total amount to be charged to the applicable budget for the supplemental compensation, which includes gross pay plus employer contributions for employee benefits. For an example to demonstrate this calculation, see below:
|Est. Gross Payment Amount to Employee *||$1,000.00|
Add: Employer contribution for Medicare benefits @ 1.45% **
Add: Employer contribution for retirement benefits @ 28.40% **
|Est. Compensation and Benefits to be charged to budget||$1,298.50|
** Contact the payroll office for assistance in determining current employer contribution rates.
Supplemental Pay May Not Exceed Maximum Allowable
The amount of supplemental compensation earned in one year is limited. Supplemental compensation is subject to a cap equal to 25% of the base appointment salary plus faculty summer salary. Stipends for endowed professorships or Pinnacle Excellence Awards do not factor into the 25% limit or the base salary. Definitions related to supplemental pay are provided and may not be all-inclusive:
Institutional Base Salary: The annual compensation paid for assigned job responsibilities and duties.
Categories for Supplemental Compensation: For the purposes of the Guidelines for Approval of Supplemental Compensation paid by the University, two general categories of activities are allowed for supplemental compensation:
- Compensation for Overload Teaching: Additional teaching duties performed during the normal academic year, intersession, or summer session. Overload pay is provided for faculty who teach additional courses that are included in the University class schedule. Overload pay does not factor into supplemental compensation limit calculations. Overload pay is according to the current University scale. Details about overload pay are in the Responsibilities of Academic Staff Policy.
- Compensation for Grant or Sponsored Program Work: If allowed by the grant agency or program sponsor, additional compensation from research and sponsored program funds may be paid to a faculty or staff member. The expectations of the additional work must conform to the established policies of the University and follow applicable state and federal regulations. All requests to earn supplemental pay through grants or sponsored programs must be routed to the Office of Research Services for verification of agency/sponsor approval. Outside work may consist of teaching credit courses specific to an agreement with an external agency or short term activities such as teaching seminars, professional development short courses, or other similar work done above and beyond the full-time work schedule. Supplemental pay for work beyond the usual job expectation must be approved through academic departments and colleges and the office of academic affairs and enrollment management. Upon verification of completion of the work, the supplemental pay must be approved by University of System. A specific pay scale derived from the sponsoring agency or other factors may be used for supplemental pay for teaching professional development, continuing education credit, or non-credit courses.
Note: Additional compensation is subject to audit. To comply with local, state, or federal audit expectations, the University must have and abide by clear policies and procedures governing compensation. To ensure equitable application of this policy, these guidelines apply to all projects regardless of the source of funding (federal, state, local government, and non-/for-profit private entities) and whether the project is fixed price or cost-reimbursable.
For example, using federal funds to compensate faculty beyond their institutional base salary is prohibited. Unusual circumstances may call for a case-by-case review. Examples of unusual circumstances include: 1) consultation work across departmental lines; 2) consultation work involving a separate or remote operation; 3) work performed by the consultant in addition to regular departmental load. In general, extra compensation above the base salary may be allowable provided that such consulting arrangements are specifically provided for in the agreement or approved in writing by the sponsoring agency.
A nine-month faculty member may receive compensation paid by or through the University during the summer period between the end of one academic year and the start of the next. The maximum rate for work done outside the academic year is 2/9 of the individual’s base salary.
Additional compensation is subject to a cap equal to 25% of the base appointment salary (plus summer salary). The cap applies to all sources of funds. See example below.
- Maximum salary for nine-month faculty members: Faculty members on nine-month academic year (AY) appointments may receive up to 25% of their base appointment salary in additional compensation.
A faculty member with a nine-month AY base salary of $50,000 may earn additional compensation during the nine-month appointment of up to $12,500 for a maximum nine-month salary of $62,500.
$50,000 × 0.25 = $12,500 maximum in additional compensation
$50,000 + $12,500 = $62,500 maximum nine-month compensation
- Maximum summer salary for nine-month faculty members: Federal and state regulations limit the amount of salary faculty members may earn during the summer from research and sponsored programs. The University limits salaries for summer assignments to 2/9 of the base appointment salary plus 25% of summer salary.
Summer Faculty Example: A faculty member with a 9-month AY base salary of $50,000 may earn up to $11,111 in summer salary (equal to 2/9) and additional compensation of up to 25% or $2,778.
$50,000/9 months × 2 = $11,111 maximum summer salary
$11,111 x 0.25 = $2,778 maximum in additional compensation
$11,111 + $2,778 = $13,889 maximum summer compensation
The Office of Research and Sponsored Programs must be contacted concerning fringe benefits included in supplemental compensation provided by external funds.
Guidelines for Approval to Earn Supplemental Compensation from Grants or Sponsored Programs
Note: Stipends for endowed professorships or Pinnacle Excellence Awards are not included in base salary or as part of the limit on supplemental compensation.
- The activity for which supplemental compensation is being requested must be approved by the department head and dean.
- A faculty member must complete the Request for Supplemental Compensation (Faculty/Staff) form and secure appropriate signatures.
- The head of the budget unit funding the supplemental compensation must sign the Request for Supplemental Compensation form. The signed form must be submitted to the Office of Academic Affairs and Enrollment Management for approval.
- Federal funds used to fund supplemental compensation must follow agency guidelines and federal regulations. In general, faculty may earn up to 2/9 of their salary between academic terms.
- Use of external funds for supplemental compensation during the summer session must be approved by the Office of Research and Sponsored Programs, department head, dean, and provost.
- The department head, dean, and budget unit head must certify the work is being performed as specified on the request form.
- Supplemental compensation must be paid when the work is completed. (Pay may not be deferred to the summer or other period outside the normal work year.) Supplemental compensation may not be used to supplement compensation that may be paid at a lower-than-base-salary rate.
- Compensation must be for actual work performed on the project from which the funds are paid.
- Any person paid (or with a commitment) through a federally sponsored award must certify that the salary paid (or the commitment) is reasonable in relation to the effort (activity) devoted to the award. The individual faculty or staff member may report their own time and effort, or a “responsible person with/using suitable means of verification that the work was performed” may report for the individual. (See “Time and Effort Reporting Policy” website.)
This policy is distributed via the Academic Advisory Council and the University Policies webpage.