Salary determination directive

About this directive

Purpose

To provide clarity and transparency for consistent application on salary determination across the Alberta Public Service.

Overview

This directive describes how Alberta Public Service employees are paid and the calculation of annual, daily or hourly rates. It also provides direction on how to set an employee’s salary in circumstances related to appointment, promotion, transfer, demotion, and temporary or acting assignments.

Definition of terms

Bargaining unit: employees under the Public Service Act designated to be represented by a trade union as the certified bargaining agent, as defined by the Public Service Employee Relations Act.

Calendar days: includes weekdays, weekends and paid holidays.

Classification: distinct kind (stream of work) and level of work (level 1, 2, 3…) allocated to a position based on the nature of work, responsibilities, scope and complexity.

Deputy head: chief officer of a department, as well as various positions including clerks, officers, and commissioners as prescribed in section 1(d) and section 1(d)(viii)(B) of the Public Service Act.

Employment group: refers to employees who work in positions that are bargaining unit, position exempt, opted out and excluded, and management.

Increment: the movement between one step and the following step within the same pay grade.

Management: employees appointed to a position in the Management Job Evaluation Plan, and paid in accordance with Schedule 2, Management Official Pay Plan within the Public Service Employment Regulation.

Maximum salary: the highest rate in a salary range, pay band, pay zone or pay grade.

Minimum salary: the lowest rate in a salary range, pay band, pay zone or pay grade.

Non-management: includes employees in bargaining unit, position exempt, and opted out and excluded employment groups.

Non-union: includes employees in management, position exempt and opted out and excluded employment groups.

Opted out and excluded: employees in a classification not included in the bargaining unit, who are appointed to a position in the Point Rating Evaluation Plan, and paid in accordance with Schedule 1, Part 1-A, Part 2-A and Part 2-B of the Opted Out and Excluded Official Pay Plan in the Public Service Employment Regulation.

Over-range: A salary greater than the maximum salary of the assigned classification.

Pay band: a salary range assigned to a management classification [i.e. Manager (Band 1), Senior Manager (Band 2), Executive Manager I (Band 3), and Executive Manager II (Band 4)] in Schedule 2 of the Management Official Pay Plan in the Public Service Employment Regulation.

Pay grade: a salary range that includes a minimum and maximum step, as well as steps between these endpoints, for bargaining unit classifications identified within the Collective Agreement.

Pay zone: an established boundary, within a pay band, for the Manager (Manager Zone 1, Manager Zone 2) and Senior Manager (Senior Manager Zone 1, Senior Manager Zone 2) classifications.

Position exempt: employees in a bargaining unit classification who are excluded from the union in accordance with Part 3, Division 3, Section 12 of the Public Service Employee Relations Act.

Salary range: a range that includes set minimum and maximum salaries, which are assigned to opted out and excluded, and management classifications that are identified in the Official Pay Plans.

Step: a single salary rate assigned within a pay grade of bargaining unit or position exempt salary grids (Note: step is referred to as a period within the Collective Agreement, or referred to as a pay period within the Public Service Employment Regulation).

Work day: any day on which employees are expected to be at their place of employment.

Bi-weekly pay

All Alberta Public Service employees are compensated on a bi-weekly pay schedule. Official pay plans and salary ranges are represented as bi-weekly in accordance with the Public Service Employment Regulation and Collective Agreement.

Calculating annual, daily and hourly rates

At times, an annual, daily or hourly rate may need to be calculated for information purposes. The calculations below are to be performed by utilizing the bi-weekly pay as a basis.

Annual rate

• An annual rate of pay (calculated to 3 decimal places) is calculated by multiplying the bi-weekly salary by 26.1.
• The 26.1 factor is based on 261 working days in a calendar year (365 days minus weekends equals 261 working days). Statutory holidays are included in the 261 as they are paid days for salaried employees.

Example:

Bi-weekly salary: $1,951.41 X 26.1 = $50,931.801 round to 3 decimal places.

Annual rate of pay: $50,931.80

Daily rate

• A daily rate of pay is calculated by dividing the bi-weekly salary by 10 working days in a bi-weekly pay period.

Example:

Bi-weekly salary: $1,951.41 ÷ 10 days = $195.141 round to 2 decimal places.

Daily rate of pay: $195.14

Hourly rate

• The hourly rate of pay is calculated by dividing the bi-weekly salary by the total number of bi-weekly hours.

Example:

Bi-weekly salary: $1,951.41 ÷ 72.50 hours = $26.916, round to 2 decimal places.

Hourly rate of pay: $26.92 hourly rate of pay

• The table below outlines the normal hours of work on an annual, bi-weekly and daily basis for determining salary.

Compensation for a partial bi-weekly pay period

When an employee does not work their required number of work days or hours, they are paid for the number of full or partial days worked within the applicable bi-weekly pay period. Paid holidays falling within that period are included.

An employee will be compensated for a partial bi-weekly pay period in the following circumstances:

• employment commences after the first work day of a bi-weekly pay period
• employment is terminated before the last work day of a bi-weekly pay period, or
• absence without pay occurred during the bi-weekly pay period

In these situations, bi-weekly salary is reduced by the number of full or partial work days not worked, using the daily rate of pay. For the purposes of calculating pay, a portion of a work day worked will be rounded to the nearest quarter hour.

Calculating a salary increase

The following outlines how to calculate a salary increase:

• a percentage increase (as stipulated within this directive) will be applied to employees promoted to, or acting in a classification, that has a higher maximum salary range. The new bi-weekly salary is calculated by applying the applicable percentage increase to the employee’s current bi-weekly salary and is rounded 2 decimal places.

Example:

Employee receives an 8% increase on promotion

Current bi-weekly salary: $2,505.05 X 1.08 = $2,705.454 round to 2 decimal places.

New bi-weekly rate of pay: $2,705.45

A one increment increase, as stipulated in the Collective Agreement, will be applied to employees promoted to or acting in a classification with a higher maximum pay grade.

Example:

The one increment increase is calculated by moving from one step (“period” as defined in the Collective Agreement) to the next step within the same pay grade, or by moving 2 pay grades higher to the same step, within that grade, to ensure a one increment increase is applied (provided the employee does not exceed the maximum salary of the new classification).

Appointment

A person appointed to a position will be paid within the pay grade, salary range, pay band or pay zone of the assigned classification of that position, as determined by the deputy head, and approved in accordance with the HR Decision Matrix.

During salary discussions and in confirming a salary offer for appointment, consideration must be given to balancing fiscal prudence with obtaining qualified candidates. The following factors must be considered, in determining an equitable and reasonable salary on appointment to a position:

• qualifications of the candidate (for example, relevant education and experience)
• internal equity (for example, salary relationship to subordinates, peers, and supervisor)
• external market (for example, candidate possess credentials and/or "in-demand" skills difficult to recruit).

Promotion

A promotion occurs when an employee is appointed to a position with a classification that has a higher maximum salary.

The employee’s current salary is to be used when setting salary upon promotion, exclusive of any market modifier, acting pay, contract modifier, and premium pay (allowances, shift differential, overtime, etc.).

Upon promotion, an employee will receive a salary increase based on the employment group and percentages, unless a higher percentage or increment is required for the employee to receive the minimum salary of the new pay grade, salary range, pay band, or pay zone.

A lower percentage, or less than one increment, will be provided if it would result in the employee receiving the maximum salary of the new pay grade, salary range, pay band or pay zone. Employees will not be paid beyond the maximum salary.

Salary upon promotion will be approved in accordance with the HR Decision Matrix.

Bargaining unit employees

In accordance with Article 51.04 of the Collective Agreement, an employee promoted to another bargaining unit classification with a higher maximum salary will normally receive a one increment increase in salary.

When a bargaining unit employee moves from a classification with no pay grade assignment (for example, power plant engineer, carpenter, electrician, etc.) to a classification with a pay grade, the salary will be placed at a step in the new grade that provides a minimum 4% increase.

A bargaining unit employee will receive a 4% increase when promoted to an opted out and excluded classification, and an 8% increase when promoted to a management classification.

Position exempt employees

An employee will receive a one increment increase in salary, when promoted to a bargaining unit classification (position is included or excluded from the bargaining unit) in which a pay grade applies.

A position exempt employee will receive a 4% increase when promoted to an opted out and excluded classification, and an 8% increase when promoted to a management classification.

Opted out and excluded employees

An opted out and excluded employee promoted to another opted out and excluded classification, with a higher maximum salary, will receive a 4% increase, or 8% increase when promoted to a management classification.

When an opted out and excluded employee is promoted to a bargaining unit classification (position is included or excluded from the bargaining unit) that includes a pay grade, the salary will be placed at a step within the new grade, which provides a minimum 4% increase.

Management employees

A management employee promoted to a classification with a higher maximum salary will receive a salary increase of 4% for a zone-to-zone change or 8% for band-to-band change.

Anniversary date consideration upon promotion

An employee who has completed 6 months or more of service towards their next scheduled salary increase (anniversary date), will receive their merit or in-range adjustment, subject to satisfactory performance as determined by the deputy head, as follows (provided the employee does not exceed the maximum salary of the new classification):

• Bargaining unit employees will receive one increment
• Position exempt employees will receive one increment
• Opted out and excluded employees will receive a 4% increase within the range
• Management employees will receive an increase of up to 3% within the range

If an employee is eligible for a merit or in-range increase, the following is the order in which the salary increases will be applied:

• apply the merit/in-range increase to the current salary, and then
• apply the promotional increase to determine the new salary

Promotion while on temporary assignment

When an employee on temporary assignment is promoted, the employee’s current salary, while on temporary assignment, will be used when determining the new salary.

Promotion results in change of hours

When an employee is promoted to a position with higher or lower bi-weekly hours, the employee’s current hourly rate will be used to determine the promotional salary.

Example:

Employee’s base position is 80.00 hours bi-weekly and they are promoted to a position that is 72.50 hours bi-weekly.

The hourly rate of the current position is used to determine:

• the step within the new pay grade is determined by applying a minimum of one increment increase (employee must be placed on a step within the pay grade). The bi-weekly rate associated with this step will be the employee’s new salary.

Or

• the placement within the new salary range is determined by applying the percentage increase to the hourly rate, which is converted to a bi-weekly rate. The bi-weekly rate will be the employee’s new salary.

Exceptions

With approval of the Public Service Commissioner, the deputy head may provide an employee (bargaining unit, position exempt, opted out and excluded, or management) with a higher promotional increase if an exceptional circumstance exists, such as the following:

• an internal equity situation exists (for example, salary relationship to an employee’s subordinates, and peers), or
• in a situation where an employee possesses credentials and/or “in-demand” skills required for the new position which are difficult to recruit.

Transfer

An employee will continue to be paid the same salary if they are appointed to a position that has a classification with the same maximum salary as their current position; this situation is typically referred to as a lateral transfer.

With approval of the Public Service Commissioner, the deputy head may provide an employee in these circumstances with a salary adjustment if an exceptional circumstance exists, as defined above under exceptions.

Demotion

Non-management employees

When a non-management employee is demoted, on a deputy head's authority, to a position with a classification that has a lower maximum salary, the impacted employee’s salary will be protected over-range until it falls within the salary range of the new classification. The over-range protection will cease once the employee leaves the position. A non-management employee's salary will be reduced immediately, to at least the maximum of the lower classification, if the demotion is the result of a voluntary (for example, employee applies to a position with a lower maximum salary) or disciplinary action.

If an employee is demoted for the mutual benefit of the department and the employee, but this would result in the employee's salary being protected over-range at an unreasonably high level in consideration of the work and assigned classification, the deputy head may assign a lower salary.

When an employee's current salary does not match a step in the pay grade of the newly assigned classification, the employee's salary will be maintained between steps until the next salary increase. The new salary will be at a step in the pay grade that ensures a one increment increase. The maximum salary for the pay grade will not be exceeded.

Management employees

An employee demoted to a position assigned a classification with a lower maximum salary will be paid within the pay band or pay zone unless the deputy head approves otherwise as set out in the Over-Range Pay Directive.

A management employee's salary will be reduced immediately, to at least the maximum of the lower classification, if the demotion is the result of a voluntary (for example, employee applies to a position with a lower maximum salary) or disciplinary action.

Temporary assignment

When an employee appointed to a position, for a temporary period, (for developmental or other purposes) that is assigned a classification with a higher maximum salary, the deputy head may authorize a salary adjustment for the temporary assignment according to promotional guidelines.

During the temporary assignment, all of the following elements: classification, salary, benefits and anniversary date, will be adjusted accordingly. Permanent employees appointed to a position for a temporary period will maintain permanent employment status for the duration of the temporary assignment.

At the end of the assignment, the employee will return to their base position or a position at a comparable level; and their classification, salary, benefits and the anniversary date will be adjusted as if the employee was never on a temporary assignment.

Acting assignment

Acting assignments are intended to be short-term in nature and are often used to provide cover off for leaves, or vacancies during the recruitment process. When an employee is required to perform the principal duties of a higher classification, on a full time basis, for a period of 12 months or less, the deputy head will authorize a salary modifier to reflect a temporary salary increase within the pay grade, salary range, pay band or pay zone of the higher classification.

Eligibility requirements

• Employees in an acting assignment must meet the minimum recruitment standards of the higher classification for the position.
• No more than one employee can act against the same position at the same time.
• Non-management employees are required to act for a minimum of 5 consecutive work days to qualify for acting pay.
• Management employees are required to act for a minimum of 30 consecutive calendar days to qualify for acting pay.

Application

• Acting pay is calculated to take effect, retroactively, from the first day the employee performs the higher duties and continues until the last day the employee is required to perform the higher-level duties.
• Acting pay is considered pensionable salary.
• The employee's classification level will not change when the acting assignment is for 12 months or less.
  • Anniversary dates will not change during an acting assignment.
  • If an anniversary date occurs during the acting assignment and a merit increase is granted, the acting salary will be reviewed to determine if an adjustment is required.
• An employee on authorized vacation leave during an acting assignment will continue to receive acting pay, provided no other employee is receiving acting pay for the same position.
• An employee will continue to receive acting pay for a maximum of 22 consecutive work days during sick leave or other leaves, provided no other employee is receiving acting pay for the same position.

Exceeds 12 months

If an acting assignment exceeds 12 months, a temporary assignment should be utilized to ensure equitable treatment by providing the employee with the entitlements associated with the classification of the position. A temporary assignment is considered an appointment and requires a competition or exemption (Talent Acquisition Services will provide advice as to a competition or exemption). When on a temporary assignment, the employee’s classification, salary and benefits will align to the duties being performed. The anniversary date will change to the effective date of the acting assignment. At the end of the assignment, the employee will return to their base position or a position at a comparable level; and their classification, salary, benefits and the anniversary date will be adjusted as if the employee was never on a temporary assignment.

Retroactivity

The deputy head may authorize a retroactive salary increase, in the form of a lump sum payment, for an employee who has been terminated or resigned and has requested such payment in writing.

In the case of retirement or death, the retroactive increase, in the form of a lump sum payment, will be paid automatically to the employee or to the employee’s estate, and any pension or other payment will be adjusted accordingly.