POL 05.15.03 – Non-Salary and Deferred Compensation
Authority: Board of Trustees
History: First Issued: February 19, 2010. Last Revised: February 22, 2019.
UNC Policy Manual 300.2.14 – Non-Salary and Deferred Compensation
UNC Policy Manual 300.2.14[R] – Regulations for Deferred Compensation for Chancellors
UNC Policy Manual 300.1.5 – Occupation of Official Residences of the Chancellors and President
UNC Policy Manual 1100.3 – Head Coaches’ and Athletic Directors’ Contracts
UNC Policy Manual 300.2.13 – Supplemental Pay Policy for Employees Exempt from the State Human Resources Act
NCSU REG08.00.02 – Computer Use Regulation
NCSU REG01.20.01 – Delegations of Authority for Appointments, Compensation and Other Personnel Actions for Employees Exempt from the State Personnel Act (EHRA)
State Budget Manual
UNC Job Categories (JCATS)
Contact Information: Associate Vice Chancellor, Human Resources (919-515-3443) University Controller (919-515-2139) and Director, Payroll (919-515-4367)
1.1 UNC Policy 300.2.14 requires each campus of the University of North Carolina to develop a policy on non-salary compensation that is provided to employees who are exempt from the State Human Resources Act (EHRA). This policy establishes guidelines and procedures for deferred compensation and non-salary compensation at North Carolina State University (NC State).
1.2 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. Decisions concerning non-salary compensation shall not be based on a Protected Status as defined by NCSU POL 04.25.05 (Equal Opportunity, Non-Discrimination and Affirmative Action Policy)..
1.3 In accordance with UNC Policy 300.2.14, this policy specifies non-salary compensation that is provided uniformly to defined categories of employees. Advance approval by the NC State Board of Trustees (BOT), which may be delegated to its University Affairs Committee, is required for any other non-salary compensation.
2. APPLICABILITY OF, AND EXEMPTIONS FROM, THE POLICY
2.1 This policy applies to EHRA employees at NC State, except –as follows:
- Chancellors are exempt from this policy. UNC Policy 300.2.14, Section C, addresses non-salary and deferred compensation for the Chancellor and UNC Policy 300.1.5 addresses the official residence provided to the Chancellor.
- Athletic directors and head coaches to whom contracts are issued are exempt from most provisions of this policy, but are subject to policy 1100.3 of the UNC Policy Manual. Non-salary and/or deferred compensation that falls outside of the terms of an athletic director’s or coach’s contract is subject to this policy.
- Athletic coaches with at-will appointments are covered by this policy.
- Deferred compensation that is included as part of formal faculty medical (including veterinary) practice plans is exempt from this policy.
3.1 Deferred or Delayed Salary/Compensation
3.1.1 For purposes of this policy, “deferred” or “delayed” salary or compensation is defined broadly as including, but not limited to, any payment or contribution by the institution 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 (except for a payroll error that is promptly corrected upon discovery).
3.1.2 Delayed and deferred salary or compensation includes 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.
3.1.3 The State of North Carolina and NC State offer employees standard benefit offerings for deferred compensation, including voluntary 457, 403(b), and 401(k) options; contributions to those plans by the institution or its associated entities are not permitted under UNC policy.
3.1.4 This policy does not prohibit the institution from making permitted employer contributions to the Teachers and State Employees Retirement System (TSERS) or the Optional Retirement Program (ORP).
3.1.5 Unless expressly approved by the Board of Governors, neither NC State nor its associated entities may provide any other employer-paid, entity-paid, or privately-paid options for deferred compensation to any employee.
3.2 Non-Salary Compensation
3.2.1 For purposes of this policy, non-salary compensation includes all compensation of monetary value other than (a) base salary; (b) salary supplements for additional temporary, acting, interim, or administrative responsibilities beyond base salary; (c) honor supplements that are part of formally-established programs at the departmental, college, university, or UNC level, such as stipends associated with named or endowed professorships; or (d) one-time award recognition programs established and administered at the college/division, university, or UNC level, such as the university’s annual Awards for Excellence and Service Recognition programs. Any other awards of non-salary compensation at the departmental or unit level that require advance BOT approval.
3.2.2 Non-salary compensation also includes, but is not limited to, payment of a relocation allowance, provision of a motor vehicle or motor vehicle allowance, club memberships, or other special benefits provided for job-related reasons and business necessity.
3.3 Exclusions from the Definition of “Non-Salary Compensation”
3.3.1 Items that are required by the organization for the express purpose of conducting University business are not considered “non-salary compensation” and are not covered by this policy. Examples include, but are not limited to, interview expenses incurred by job candidates as part of a University recruitment, provision of housing when occupancy of such housing is required as part of the job; reimbursement of professional or work-related travel expenses, including mileage reimbursement for business use of a personal vehicle, and allowable per diem meal expenditures; payment of required visa-related fees for work authorization of non-resident alien employees; and the 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, and including occasional personal use as authorized under NCSU REG08.00.02 – Computer Use Regulation.
3.3.2 Some direct expenses associated with remote work assignments, such as extended foreign assignments for less than twelve months, may be excluded from the definition of non-salary compensation in accordance with tax law, and must be evaluated on a case-by-case basis by the University Payroll Office and the Office of General Counsel.
3.3.3 In accordance with the State Budget Manual, interview-related travel and lodging expenses for EHRA job candidates are considered official state business and may be paid with state appropriated funds. Payment/reimbursement of such expenses is not considered to be compensation to the individual and is not treated as taxable income. Expenses of accompanying family members cannot be paid or reimbursed with state funds.
3.4 Funding Source
3.4.1 The funding source for non-salary compensation shall be from sources other than state-appropriated funds, except as noted below. Non-salary compensation may be provided by an associated foundation or other associated entity only if permitted by that entity’s policies and approved by the BOT. The BOT may approve an exception permitting non-salary compensation to be funded from state-appropriated funds only when also permitted by the Office of State Budget and Management (OSBM).
3.5 Tax Implications
3.5.1 Non-salary compensation shall be appropriately reported to federal and state tax agencies. The value of personal use that is deemed not to be job-related must be reported and assessed appropriate taxes.
4. TYPES OF NON-SALARY COMPENSATION
4.1 Relocation Allowance
4.1.1 In accordance with the State Budget Manual, relocation allowances (e.g., moving expenses, house-hunting trips, temporary housing) cannot be paid from state-appropriated funds for initial employment and are fully taxable to the employee. Only discretionary funds can be used for relocation allowances.
4.1.2 The Chancellor is delegated with the authority to provide payment of a relocation allowance in an employment offer, and may further delegate such authority no lower than the Executive Vice Chancellor and Provost, Vice Chancellor or Dean level.
126.96.36.199 NCSU REG01.20.01 – Delegations of Authority for Appointments, Compensation and Other Personnel Actions for Employees Exempt from the State Personnel Act (EHRA), in effect on the date of the adoption of this policy authorizes such delegation by the Chancellor. Accordingly, the Chancellor has issued a standing authorization for relocation allowances (up to a designated limit) as part of an initial appointment offer for permanent full-time tenured, tenure-track, non-tenure track faculty, and other EHRA non-faculty employees. The Chancellor has issued a standing authorization to the Athletic Director for relocation expenses (up to a designated limit) as part of an initial appointment offer for coaches, assistant coaches, assistant/associate athletic directors, and other EHRA non-faculty employees in the Department of Athletics. 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 UNC policy.
4.1.3 Relocation allowance exceptions that exceed the designated limit must be authorized in advance on a case-by-case basis by the Chancellor, Executive Vice Chancellor and Provost, or supervising Vice Chancellor. Relocation allowance requests that exceed the designated limit will be limited to the actual amount of relocation expenses incurred, or up to the approved relocation allowance amount, supported by receipts.
4.1.4 All relocation allowance requests must be submitted and processed using the University’s designated Non-Salary and Deferred Compensation Form.
4.1.5 Not every offer/appointment is intended or required to include such provisions, and its inclusions should be based on business necessity to attract well-qualified candidates, and contingent upon the availability of discretionary funds.
4.3.3 Remote Work Assignment
- Any EHRA 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.
- The Chancellor shall have the authority to authorize temporary housing and other incidental living costs per item a. above in an amount not to exceed $5,000 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.
- Any reimbursements that exceed these limits or duration must be authorized in advance on a case-by-case basis by the BOT.
4.4 Vehicle and Parking Costs
Vehicle and parking costs for all categories of EHRA employees except those listed below must be authorized in advance on a case-by-case basis by the BOT. Any personal use of such vehicles must be reported and is considered taxable income.
4.4.1 The following positions are authorized as resources allow (but are not required) by this policy to receive one lease vehicle, courtesy vehicle, or comparable vehicle allowance up to $7,500 in value (plus associated vehicle insurance, vehicle tax expenses, and campus parking permits, if any) for the primary purpose of conducting university business: the university’s chief advancement officer; the university’s chief development officer; the university’s chief alumni affairs officer; and the chief development officer of each college. The university’s athletic director and head coaches to whom contracts are issued may receive vehicles as provided under the express terms of those contracts. Employees who receive a leased car or courtesy car are responsible for reporting personal mileage to their departments.
4.4.2 The following positions in athletics are authorized (but are not required), as resources allow, to receive one vehicle or comparable allowance (no associated vehicle costs are provided):
- head coaches appointed at-will
- the assistant coaches, director of operations, and head strength/conditioning coach for football, men’s basketball, and women’s basketball;
- assistant coaches for baseball and volleyball; and
- the head athletic trainer and the director of high school recruiting for football
4.5 Club Memberships
4.5.1 Positions categorized as top executive officers (JCAT 1A), senior institutional/chief functional officers (JCAT 1B), and the chief advancement officer of each college may be provided with memberships at the University’s institution-affiliated clubs (The State Club and/or the University Club) for job-related purposes. Personal use is taxable as noted below.
4.5.2 University departments may hold a “departmental” membership, in the name of the department head, for departmental business use only at either of the University’s institution-affiliated clubs, if such memberships are allowed by club policy. Such memberships must be approved in advance by the Chancellor or designee. All personal use of departmental memberships is prohibited.
4.5.3 The Provost, and the university’s chief advancement officer may be provided with one external club membership for job-related purposes; any such club must have a non-discrimination policy prohibiting discrimination against groups protected by federal and North Carolina law.
4.5.4 Individuals who hold academic rank and a primary faculty appointment in the department of physical education – and whose primary role is to provide physical education instruction to students — as well as EHRA employees in the departments of physical education, campus recreation, and athletics whose primary responsibilities involve providing the direct physical training of students/athletes and/or ensuring the safety and maintenance of fitness and physical education equipment — may be provided membership or access to Carmichael Complex or Athletics fitness facilities (as appropriate) for job-related purposes.
4.5.5 All other memberships in health clubs/fitness facilities, as well as any club memberships for all other categories of EHRA employees, must be authorized in advance on a case-by-case basis by the BOT.
4.5.6 In no case may the funding source for club memberships be state-appropriated funds. Use of an authorized club membership for personal reasons must be reported for tax purposes, and is considered taxable income. Under IRS regulations, all use is assumed to be personal and taxable unless all usage is documented and reported to the University Payroll Office, distinguishing each instance of business/job-related use.
4.6 Athletic and Cultural Events
4.6.1 Positions categorized as top executive officers (JCAT 1A) and senior administrators/chief functional officers (JCAT 1B) may be provided with admission to university-related athletic or cultural events for job-related purposes, including admission for an accompanying guest, if the guest is expected to assist in university-related hosting activities.
4.6.2 Athletic 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.
4.6.3 Athletic or cultural event tickets or related amenities provided to any EHRA employee for discretionary (non-business-related) use must be authorized in advance on a case-by-case basis by the BOT, must be reported for tax purposes, and is considered taxable income, except that excess single-use tickets to campus events that could not otherwise be sold (and as a result are deemed to have no market value) may be distributed on a non-discriminatory basis as occasional employee recognition/appreciation awards by the Chancellor, Provost and Executive Vice Chancellor, Vice Chancellor, or Dean.
4.7 Discounts and Privileges
4.7.1 Employee discounts on products or services such as those offered through university dining, bookstore, or other university business operations, if offered, must be made available to all benefits-eligible University employees and may not exceed 20% of the cost charged to non-employee customers for the same products or services. Any cost waiver or discount exceeding 20% must be reported to the University Payroll Office as taxable compensation on a case-by-case basis.
4.7.2 Occasional meals or refreshments of de minimis value that are furnished on business premises for the convenience and benefit of the employer (such as coffee or a working lunch provided to a group of employees at a meeting) are permitted in accordance with the State Budget Manual if state funds are used.
4.7.3 Regular meal privileges or lodging provided to an employee as a required condition of employment (i.e., meals provided to dining service employees who cannot leave their workplace during meal service hours, or housing provided to dormitory resident advisors) may be permitted; employing units should consult with the University Payroll Office in advance.
4.7.4 One meal per work shift may be provided to the following positions within the department of university dining for job-related purposes to help ensure quality control: director and associate director of dining services, as well as the directors of dining hall operations, retail operations, marketing, and catering, and the department’s chief dietician and executive chef.
4.7.5 Meals for coaches, athletic trainers, and sports supervisors interacting directly with athletes at training table during that sport’s season are authorized as a job-related purpose under this policy.
4.8 Incentive & Overload Compensation
4.8.1 Incentive payments provided to employees for participating in an approved research study conducted by NC State are authorized by this policy. Payments of cash or equivalent (such as gift certificates with a specific face value) must be included as compensation through payroll and are taxable.
4.8.2 Incentive-based compensation beyond base salary provided to any Athletics employee (other than the athletic director and head coaches with contracts covered by UNC Policy 1100.3, who are exempt from this policy), for reasons including, but not limited to, reaching performance goals such as post-season playoffs or student academic achievement levels, must be approved on a case-by-case basis by the BOT.
4.8.3 Compensation paid from NC State-associated entities to faculty who teach in executive education or comparable programs is authorized by this policy. Payments in excess of 20% of the faculty member’s annual base salary – from all sources including supplemental or overload pay that is subject to the 20% overload limit — must be approved on a case-by-case basis by the Chancellor, on recommendation of the Dean and Provost.
4.8.4 Any form of incentive-based compensation beyond base salary to be paid to any EHRA employee in recognition of performance or productivity, except as provided for in this policy, must be expressly authorized by the Chancellor and the BOT and conform with any relevant policies and guidelines of the BOG then in effect.
4.9 Educational Assistance, Dependent Care, and Related Benefits
4.9.1 Any employer-provided benefits in excess of current IRS limits for qualified educational assistance, dependent care, or similar benefit programs must be authorized in advance by the Chancellor or Provost, and must be reported to the University Payroll Office as taxable compensation on a case-by-case basis.
4.10 All Other Non-Salary Compensation
4.10.1 Provision of any other form of non-salary compensation or benefit — including but not limited to, cash, gifts, gift certificates, prizes, awards, additional paid time off, parking fee waivers, payment of visa-related fees for family members of a non-resident alien employee, or access to special campus services or benefits — must be authorized in advance on a case-by-case basis by the Chancellor up to $500 or the BOT, if more than $500; and, if approved by either, must be treated as taxable income as applicable.