Administrative Procedure #3.02 - Classification and Compensation
Purpose
To provide all employees with an understanding of the compensation and classification systems at the City of Corvallis and to provide a systematic, timely, and equitable process to create, modify, review, and classify positions.
Scope
Applies to all City of Corvallis employees except the City Manager, City Attorney, and Municipal Judge.
Policy
The City will establish an employee compensation system that takes into account internal equity, labor market considerations, complexity or difficulty of the work, total compensation, and the City's economic condition. It is the goal of the City to attract and retain qualified employees and encourage high levels of performance. Additionally, the City will utilize a valid and consistent methodology for evaluating jobs. It is the City's policy that:
a. Direct and indirect compensation (wages, premiums, health benefits, pensions, etc.) are to be considered collectively in determining appropriate levels of compensation for employees;
b. Wage-and-benefits packages are considered "externally competitive" if they are plus or minus five percent (+ or - 5%) of the average total compensation offered in applicable labor markets for similar work;
c. Other factors, such as compression between classes, recruitment, retention of qualified employees, the City's economic condition, and incentives linked to performance may also be considered in establishing wages and benefits;
d. Adjustments to the compensation schedule may be made based upon a formula that considers the Consumer Price Index. Adjustments may also result from a classification/compensation study or through a collective bargaining agreement. The City recognizes the legitimate role of collective bargaining in determining compensation for represented employees.
Procedures
Point-Factoring System
Each job description will be evaluated against the point-factoring system to determine the internal equity of a position against other positions within the City.
The point factoring system will evaluate five (5) job factors:
a. Interpersonal/Human Relations: The importance and level of communication skills and relationship abilities required to achieve positive work results and the scope of the interactions and interpersonal contacts.
b. Knowledge/Mental Competency: The total capability required to learn and perform the job competently. This includes both level of knowledge and the application of that knowledge to work situations (challenges) faced in the classification.
c. Physical Requirements: The coordinative and manipulative skills, as well as the level of exertion required.
d. Responsibility/Accountability: The total magnitude of job responsibility, including both the level of responsibility and the degree of job impact.
e. Work Environment: The need to perform under less-than-optimal working circumstances, including difficulty, work pressure and workflow, work location, and conditions.
The point-factoring system is one mechanism used to determine the placement of a position within the salary structure; it is not the sole criterion.
A position questionnaire will be completed when a job description is created or changed significantly or an incumbent or management believes the position should be reviewed for appropriate placement. The questionnaire will describe the position in more depth and narrative than the job description. In the case of a new position, the manager will complete the questionnaire and submit it to Human Resources. In the case of a re-classification request, the incumbent(s) will complete the position questionnaire. The manager will review the questionnaire and, if necessary, supplemental information.
Job Descriptions
Job descriptions are not meant to list every specific duty in a position; nor are they meant to limit the authority of management staff in assigning work. Each position must be described in a written job description which will include:
The title of the position, Department, general description and purpose of the classification and position, essential functions and responsibilities, supervision received and exercised, minimum qualifications, special requirements, requisite knowledge, skills, and abilities, tools and equipment used, physical demands, work environment or conditions, effective date, and Fair Labor Standards Act (FLSA) Status.
Every regular employee must have a written job description for their position and it is the responsibility of the manager to ensure job descriptions are accurate and current. Human Resources must approve all changes to job descriptions and is responsible for job description standards. Job descriptions should be reviewed annually at the time of each employee's performance evaluation and revised accordingly.
Salary Ranges
Each job description will be assigned a pay grade with a minimum and maximum salary range and identified steps in between the minimum and maximum rates.
Generally new employees will be hired at Step 1 unless prior experience and education exceed the minimum requirements and warrant a higher starting rate than Step 1. Prior to extending a job offer, the hiring manager must complete an Equal Pay Assessment and receive approval from the Human Resources Director.
Occasionally, due to unforeseen circumstances such as a demotion or the implementation of a compensation study, an employee may be paid at a rate higher than the maximum of the range. As a result, the employee's pay is frozen until the maximum of the range is equal to or exceeds the employee's rate of pay. Once the employee's rate of pay is equal to or below the maximum, they may receive adjustments applied to the salary schedule and/or step increases, if applicable.
In addition, Human Resources may approve a salary range change for the following reasons:
a. a substantial change in the duties and responsibilities of the classification; or
b. an inordinate amount of turnover within the classification is attributed to an inadequate salary level; or
c. difficulty in recruitment of qualified candidates for a classification is attributed to an inadequate salary level; or
d. a new classification is needed.
Safe Harbor Regulation Exempt Employees – Fair Labor Standards Act (FLSA)
It is the City's policy to comply with the salary basis requirements of the FLSA. Therefore, all management staff are prohibited from making improper deductions from the salaries of exempt employees. If an improper deduction occurs, the employee should immediately report this information to their direct supervisor or to Human Resources. Reports of improper deductions will be promptly investigated. If it is determined that an improper deduction has occurred, the employee will be promptly reimbursed for any improper deduction made.
Deductions from pay are permissible when an FLSA-Exempt employee: is absent from work for one or more full days for personal reasons other than sickness or disability; for absences of one or more full days due to sickness or disability if the deduction is made in accordance with a bona fide plan, policy, or practice of providing compensation for salary lost due to illness; to offset amounts employees receive as jury or witness fees or for military pay; or for unpaid disciplinary suspensions (approved by Human Resources) of one or more full days imposed in good faith for workplace conduct rule infractions. Also, an employer is not required to pay the full salary in the initial or terminal week of employment; for penalties imposed in good faith for infractions of safety rules of major significance, or for weeks in which an exempt employee takes unpaid leave under the Family and Medical Leave Act. In these circumstances, either partial-day or full-day deductions may be made.
Lateral Transfer
Transfers may be inter- or intra- departmental. In order to be eligible for a voluntary transfer, an employee must have completed their probationary or training period and be in good standing in their current position. The City may involuntarily transfer an employee if the City deems it is in its best interests.
Lateral transfers will be made effective on the first day of a pay period. An employee will be paid at the same rate of pay.
Promotion
Upon promotion, the new pay rate will reflect a minimum 2% salary increase over the current base salary within the higher salary range for the new job group excluding any special incentive pays. Promotions will be made effective on the first day of a pay period. Exceptions may be approved by Human Resources and the City Manager.
Demotion
If a demotion is for disciplinary reasons, the salary will be set by Human Resources at an appropriate level in the lower range that is less than the existing salary. If a demotion is not for disciplinary reasons, the Department Director will determine the appropriate salary within the salary schedule with the approval of Human Resources and the City Manager. Demotions will be made effective on the first day of a pay period. Exceptions may be approved by Human Resources and the City Manager. If applicable, refer to collective bargaining agreements for specific rules related to demotion.
Re-classification
A request for a position review may be initiated by Department Directors, Managers/Supervisors, the position incumbent, or Human Resources. Re-classification requests are sent directly to Human Resources. Human Resources will work with the employee and departmental management staff as needed during the re-classification process. A request for review may only be submitted once every three years. Human Resources may initiate a position review at any time.
Human Resources must act upon the request for review without undue delay and will give notice to management and the affected employee. An employee must meet the minimum and special qualifications of the re-classified position.
The effective date for a re-classification will be the first day of the pay period following the date on which Human Resources has completed its review of the position, unless another date is requested by the Department Director and is approved by the Human Resource Director. However, re-classifications will not be effective retroactively.
Upon re-classification upward to a classification at a salary range higher than the employee's current classification, an employee will be placed in the new range at the next higher salary rate that provides for a pay increase.
Upon re-classification downward to a classification at a salary range lower than the employee's current classification:
a. The employee will maintain their current rate of pay if the current rate of pay is a step within the new salary range;
b. If the current rate of pay is within the new range, but not on a step, the employee will be moved to the closest step;
c. If the employee's current rate of pay is above the maximum rate of the new salary range, the employee will be placed at the top step of the new range.
Re-classifications will be made effective on the first day of the pay period. Exceptions may be approved by the Human Resources Director.
Goals
a. Attract and retain high quality employees.
b. Provide clear understanding and expectations regarding job classifications and compensation.
Definitions
Benefits: As defined in State law and generally referring to the portion of total compensation not represented by wages.
Classification: Consisting of individual jobs and job families:
a. Job Classification: One or more positions sharing a common job description and common job classification system points.
b. Job Family Structure: A tool to differentiate classifications within a similar technical area which are distinct enough, based on the point value, to merit a different job classification.
Compensation: Total compensation is defined in State law as all rewards and recognition, including base wages, other salary and incentive compensation, benefits and perquisites, and specifically all direct or indirect wages and benefits for a specific position which have a material value.
Demotion: Demotion is the movement of an employee to a position with a lower-paying salary range.
Equity: consisting of three dimensions:
a. Inadequate Compensation Differential/Compression: Comparison between classifications within the organization to ensure appropriate compensation differential between classifications within a particular job family.
b. Market Value or External Equity: An external valuation based on analysis of roughly equivalent positions from comparator cities, within a reasonable recruitment area, as defined by State law.
c. Relative Compensatory Value: Comparison between classifications within the organization based on a system of point values assigned on the basis of five factors: level of responsibility, knowledge, physical requirements, work environment, and interpersonal relations.
Lateral Transfer: the re-assignment of an employee to a position with similar pay scale for which the employee meets the minimum and special qualifications.
Promotion: is the movement of an employee, through a recruitment process, to a higher level position with a higher-paying salary range.
Re-Classification: a change in the classification of an employee or a position without a recruitment process, due to a substantial change in duties, responsibilities and/or authority; but the requisite knowledge, skills, and abilities to perform the new duties are similar to those of the former classification.
Wages: An employee's pay, including the base wage and any special pays for certifications, assignments, market conditions, etc.
Alternative Work Schedule: Employee-requested changes to an employee’s normal workweek including a compressed workweek, flexible working hours, job sharing, reduced work schedule, or telecommuting.
Collective Bargaining Agreement: A written legal contract between the City and a union representing the employees.
Compressed Work Week: An employee completes a 40-hour workweek in less than five full workdays.
Flexible Working Hours (Flextime): A 40-hour workweek (for full-time employees) is completed but an employee is given flexibility in daily start and end times.
Job Sharing: Two employees share the duties of one full-time position (FTE).
Reduced Work Schedule: Employees temporarily work less than full scheduled hours for a period of time.
Remote Work Site: An off-site work location outside of an employee’s normal worksite. The telecommuting agreement must state a location for the remote work site. The remote work site must be located in the state of Oregon. Any changes to the regular remote work site location must be approved in advance by the Department and Human Resources Director.
Telecommuting: When work is completed off-site by substituting telecommunications technology for commuting to the employee’s primary work location.
Review/Update
The Human Resources Director will prepare this Administrative Policy as needed and submit to City Manager for review and approval.
Last reviewed: 04-2023
