§ 21-5-1101 - Merit increase pay system. - Arkansas Statutes

21-5-1101. Merit increase pay system.

(a) The Department of Finance and Administration is authorized to develop and implement a merit increase pay system in accordance with the performance evaluation process under 21-5-1001 et seq. for the following employees:

(1) Employees of all state agencies, boards, commissions, and institutions covered by the Uniform Classification and Compensation Act, 21-5-201 et seq.; and

(2) Employees in nonclassified positions of all state agencies, boards, and commissions, excluding institutions.

(b) (1) Except as provided in subdivision (b)(2) of this section, to be eligible to be evaluated under the merit increase pay system an employee shall have continuous employment with the state in a regular full-time position for twelve (12) months.

(2) A part-time employee in a regular salary position who has had continuous part-time employment with the state for twelve (12) months shall be eligible to be evaluated for a pay increase under the merit increase pay system and to receive the merit pay increase on a pro rata basis.

(c) For the purpose of this subchapter, "merit increase pay system" means a merit-based pay system that incorporates pay and performance evaluation standards according to 21-5-1001 et seq. and establishes criteria for salary adjustments or lump-sum payments for employees who meet requisite performance categories.

(d) Merit payments may be awarded to employees who satisfy performance evaluation-based criteria developed by agencies and institutions in accordance with rules and policies developed and approved by the Office of Personnel Management after review by the Legislative Council.

(e) Effective July 1, 2009:

(1) Employees who receive an overall satisfactory rating under an approved performance evaluation system shall be eligible for a one and five-tenths percent (1.5%) merit increase;

(2) Employees who receive an overall above average rating under an approved performance evaluation system shall be eligible for a three percent (3.0%) merit increase; and

(3) Employees who receive an overall exceeds standards rating under an approved performance evaluation system shall be eligible for a four and five-tenths percent (4.5%) merit increase.

(f) (1) (A) Employees in positions assigned to the career service pay plan shall be eligible for a merit increase to be added to the employee's base salary rate with the following conditions:

(i) An employee whose annual base salary rate that is at or above the maximum pay level for his or her grade may receive the merit increase up to the career pay level if the employee is eligible for career pay level adjustments as established in 21-5-214(d);

(ii) An employee whose annual base salary rate is at or above the maximum pay level for his or her grade and who is not eligible for career pay level adjustments may receive the merit increase as a lump sum on the last pay period of the fiscal year of the year in which the increase is to occur; or

(iii) An employee whose annual base salary rate is above the career pay level is eligible for the merit increase, but the increase shall be paid as a lump sum on the last pay period of the fiscal year of the year in which the increase is to occur.

(B) Employees in positions assigned to the professional and executive pay plan shall be eligible for the merit increase as provided in this section, but the increase shall be paid as a lump sum on the last pay period of the fiscal year of the year in which the increase is to occur.

(C) Nonclassified employees in positions with maximum annual salary rates set out in dollars established by law shall be eligible to receive a merit increase as provided in this section, but the increase shall be paid as a lump sum on the last pay period of the fiscal year of the year in which the increase is to occur.

(2) The lump-sum payments authorized in this section shall be considered as salary for the purposes of retirement eligibility.

(g) Management or supervisory personnel who fail to complete annual evaluations of employees under their administrative control shall not be eligible for merit payments.

(h) (1) If the Chief Fiscal Officer of the State determines that general revenue funds are insufficient to implement the merit increases authorized in this subchapter or by any other law that affects salary increases for state employees, the Chief Fiscal Officer of the State, upon approval of the Governor, may reduce the percentage of all authorized merit increases for all state employees covered by this subchapter without regard to whether the employees are compensated from general or special revenues, federal funds, or trust funds.

(2) However, if sufficient general revenues should then become available at any time during the fiscal year to provide the merit increases for all state employees without regard to the source of revenues, merit increases for state employees provided for in this subchapter or by any other law may then be fully implemented by the Chief Fiscal Officer of the State.

(3) Any adjustments in the implementation of authorized merit increases made by the Chief Fiscal Officer of the State under this subsection shall be reported to the Personnel Committee of the Legislative Council.