USM looks to adjust pay scales following $15 minimum wage

To address wage compression caused by the University System of Maryland raising its minimum wage to $15, the system is planning to adjust nonexempt staff pay scales.

Nonexempt, hourly positions within the USM are sorted into “pay grade” categories that denote the minimum amount that role can be paid, the maximum it can be paid, and a midpoint between the two. When the system increased its minimum wage to $15 an hour in January, the four lowest pay grades — two through five — all had a minimum hourly wage of $15 exactly.

The university system’s Compensation and Classification Committee, which is responsible for completing reviews of the system’s salary structures based on external market data and trends, has now recommended a new pay structure to account for that compression.

The lowest pay grade will still have a minimum wage of $15, while the minimum wages of grades three, four and five will increase to $15.32, $15.64 and $15.96, respectively. These three pay grades will then be adjusted to achieve a 35% range between the minimum and maximum wages.

Pay grades six through 17 will be bumped up by 3.6%.

Overall, it will cost the USM $500,226 to implement these pay increases — in addition to the $1,828,312 that it already cost the system to increase its minimum wage to $15 an hour — and will affect 770 employees, according to USM spokesman Mike Lurie. If approved by the Board of Regents, the increases will take effect on July 1, at the beginning of the new fiscal year.

Cost of living and merit raises that the system had previously scheduled for July will be implemented based on the new pay ranges.

The USM institutions’ presidents and vice presidents for finance and administration have recommended the adoption of the new pay structure, according to the USM Board of Regents Committee on Finance’s June 9 meeting agenda. The committee is scheduled to vote on the adjusted pay structure at that meeting, and, if the committee recommends approval, the full board will vote on the measure at its next meeting on June 17, its last of the fiscal year.

In addition to the aforementioned pay scale increases, certain employees will also get salary bumps based on how long they’ve worked for a USM institution. Employees in pay grades two through five will get hourly pay increases ranging from 30 cents, for those who have been employed by a USM institution between three and five years, all the way up to $1.30 for employees who have worked at a USM institution for over 20 years. This will cost the system $1,283,273.

AFSCME Council 3, the union that represents USM staff members and other state government employees, said in an emailed statement that they were surprised to hear about the proposed adjustments.

“AFSCME has been bargaining with the USM about effects of the minimum wage increase and wage compression,” Stuart Katzenberg, the union’s director of collective bargaining and growth, wrote. “We are surprised by the unilateral and public actions of the USM. Unfortunately, we are not surprised by their bad- faith actions.”

According to Lurie, the USM usually notifies AFSCME ahead of finance panel meetings, “with the understanding that the Finance Committee merely makes a recommendation for later consideration by the full board. In addition, AFSCME has the right to request the USM to bargain over the effects of these changes.”

Exempt employees will also get pay increases this fiscal year (traditionally, the pay structure for exempt employees is reviewed in even years and the nonexempt structure is reviewed in odd years). All pay grades will receive a 4.4% increase, costing the system $961,141. This change will also go into effect on July 1.

Last time the compensation committee considered adjusting exempt workers’ salaries in 2020, it did not recommend any increases.

In reports submitted to the Board of Regents recommending these pay scale increases, the compensation committee requested that that the university system reevaluate its entire compensation system, which, it says, was originally designed over two decades ago.