The UNC Board of Governors requires each campus of the UNC System to have a policy on non-salary and deferred compensation. The purpose is to establish guidelines to ensure a reasonable level of consistency regarding compensation packages provided to employees exempt from the State Human Resources Act (“EHRA” employees) and that any such compensation is subjected to oversight and approval. The awarding of any such compensation is intended to attract and/or retain the highest quality personnel.
Board of Trustees
Approved by Board of Trustees October 25, 2024; revised August 3, 2007; established January 2007
UNC Policy 300.2.14 and 1100.3
Human Resources
Purpose
The UNC Board of Governors requires each campus of the UNC System to have a policy on non-salary and deferred compensation. The purpose is to establish guidelines to ensure a reasonable level of consistency regarding compensation packages provided to employees exempt from the State Human Resources Act (“EHRA” employees) and that any such compensation is subjected to oversight and approval. The awarding of any such compensation is intended to attract and/or retain the highest quality personnel.
Applicability
This policy applies to EHRA employees, including Senior Academic and Administrative Officers (SAAO), faculty, and Exempt Professional Staff (EPS). Employees subject to the State Personnel Act (SHRA) are not eligible for non-salary and deferred compensation.
Non-Salary Compensation and Eligible Funding Sources
Definitions: Non-salary compensation includes, but is not limited to, the provision of a vehicle or vehicle allowance, housing or housing/moving/relocation allowances, club memberships, and special campus benefits provided for job-related reasons. Non-salary compensation must be provided in accordance with UNC and State of North Carolina policies, procedures, and IRS regulations. Non-salary compensation is in addition to the standard fringe benefits available to all EHRA employees.
Funding Sources: Unless permitted by the Office of State Budget and Management (OSBM) and approved by the Board of Trustees, State Funds shall not be used to provide any of the non-salary compensation types identified under Section IV of this policy.
Non-Salary Compensation by Type
Vehicle Allowances
Eligible Employees: The Chancellor, Senior Academic and Administrative Officers (SAAOs), Associate Vice Chancellors, Associate Athletic Directors, Assistant Athletic Directors, Executive Director of the Seahawk Club, and Coaches (i.e. Head Coaches, Associate Coaches, and Assistant Coaches), who routinely travel representing the university or its affiliated organizations are eligible to be approved to receive an automobile allowance in accordance with this policy.
Allowance Amounts: Unless a specific amount has been previously approved by the President and/or the Board of Trustees for a particular employee, the allowance amount provided will be informed by a variety of factors, including, but not necessarily limited to, the frequency of business travel, unique vehicle requirements, and industry expectations associated with a particular position.
Justification: For an employee to be eligible to receive a vehicle allowance (that has not been previously approved by UNCW’s Board of Trustees through its inclusion in applicable employment contracts), a written justification for needing the car allowance must be provided. The Chancellor (or the Chancellor’s designee) must approve this justification in writing, and a copy of the approval must be maintained by the Office of Human Resources.
Approval Authorities and Processes: The approval and provision of a vehicle allowance must adhere to applicable requirements described under Section V. and Section VI of this policy.
Reporting of Benefits: The vehicle allowance is considered a taxable fringe benefit and is included in the employee’s gross wages. It is subject to employment taxes and withholdings and is reported on the employee’s W-2 in accordance with IRS guidance.
Courtesy Vehicles
Eligible Employees: Athletic Director, Associate Athletic Directors, and Coaches (i.e. Head Coaches, Associate Coaches, and Assistant Coaches) who routinely travel representing the university or its affiliated organizations are eligible to be approved to receive a courtesy vehicle (provided through a sponsoring car dealership) in accordance with this policy.
Justification: Each employee receiving a courtesy car (that has not been previously approved by UNCW’s Board of Trustees through inclusion in applicable employment contracts) must establish a written justification for needing the car. The Chancellor must approve this justification in writing, and a copy of the approval must be maintained by the Office of Human Resources.
Record-Keeping: In all cases, employees using courtesy cars will be required to maintain a mileage log for all business and personal miles traveled and for the reimbursement of business miles for IRS reporting requirements.
Approval Authorities and Processes: The approval and provision of a courtesy car must adhere to applicable requirements described under Section V and Section VI of this policy.
Reporting of Benefits: Business use of a courtesy vehicle is a nontaxable fringe benefit. The personal use of a courtesy vehicle is a taxable fringe benefit and is included in the employee’s gross wages. It is subject to employment taxes and withholdings and is reported on the employee’s W-2 in accordance with IRS guidance.
Club Memberships
Eligible Employees: The Chancellor, Senior Academic and Administrative Officers (SAAOs), Athletic Director, Executive Director of the Seahawk Club, and Head Coaches.
Non-Discrimination Policy: Any club membership for an employee or the granting of special campus services or benefits must be job-related, and the club must have a policy prohibiting discrimination against groups protected by federal and North Carolina law.
Approval Authorities and Processes: The approval and provision of a Club Membership must adhere to applicable requirements outlined in Section V and Section VI of this policy.
Housing/Moving/Relocation Allowances
Eligible Employees: The university may, within existing resources, provide a housing/moving/relocation allowance to any prospective non-SHRA employee as part of a hiring offer to successfully recruit a qualified candidate who must relocate to accept the position. Not every offer is intended or required to include such provisions, and its inclusion should be based on the business necessity to attract well-qualified candidates.
Time Limitations:
Employees must reimburse the university 100% of any allowance received (gross, not net of taxes) if they separate (voluntarily or involuntarily) from the university prior to 90 days.
At the discretion of the Vice Chancellor of Business Affairs, employees may be required to reimburse the university a prorated portion of any allowance received (gross, not net of taxes) if they separate (voluntarily or involuntarily) from the university between 91 days and one year of hire for a position outside of North Carolina state government.
Approval Authorities and Processes: Housing/moving/relocations allowances and approvals are to be implemented in accordance with Sections V and Section VI of this policy.
Reporting of Benefits: The housing/moving/relocation allowance is considered a taxable fringe benefit and is included in the employee’s gross wages. It is taxed on the first eligible pay cycle after employment and payment of the allowance. These benefits are subject to employment taxes and withholdings and are reported on the employee’s W-2 in accordance with IRS guidance.
Reimbursements Not Subject to This Policy
Reimbursement of professional or work-related travel and the provision of equipment or other items to perform the work of the position (even if used at home, including computers, cellular telephones, pagers, and similar work-related items) are permissible and are not considered non-salary compensation as used in this policy. The provision of housing that is a condition of employment is not subject to this policy.
Non-Salary Compensation Approval Requirements and Procedures
Chancellor: Non-salary compensation for the Chancellor must be approved by the President of the UNC System. These actions will adhere to applicable procedures as prescribed by the UNC System.
Senior Academic and Administrative Officers (SAAOs): Non-salary Compensation for SAAOs must be approved by the Chancellor and President of the UNC System. These actions will be initiated by the Chancellor through a communication to the Associate Vice Chancellor of Human Resources, with any subsequent approvals being coordinated and tracked by Human Resources.
Athletic Director and Head Coaches: Non-salary compensation for Head Coaches must be approved by both the Chancellor and the Board of Trustees. Henceforth, non-salary compensation for Head Coaches should be included in applicable employment contracts. Approved contracts will be kept on file in the Athletics Department and Office of Human Resources.
Other Eligible Employees:
General Requirements: Non-salary compensation for other eligible employees must be initiated by the applicable Senior Academic and Administrative Officer or Athletic Director by submitting a written statement of justification for the applicable non-salary compensation type to the Associate Vice Chancellor for Human Resources. After appropriate screening, the Associate Vice Chancellor for Human Resources will forward these requests, along with recommendations, to the Chancellor (or the Chancellor’s designee) for review and approval.
Exceptions: Non-salary compensation actions requested exclusively for housing/moving/relocation purposes for employees not covered under Section V (A, B, or C) of this policy may be approved by the Vice Chancellor for Business Affairs, if said actions are less than $5,000.
Non-Salary Compensation Processing and Record Keeping
Processing: After all applicable approvals are obtained (as prescribed in Section V), the Office of Human Resources will provide the Controller’s Office with an updated list of employees with respective approved amounts for execution by the Payroll Department.
Limitations: Recurring allowances (not housing/moving/relocation allowances) provided to employees referenced in Section V will continue while the employee remains in their respective position or until their allowance is modified or discontinued by the appropriate approving authority. Modifications to these allowances shall be communicated by the Office of Human Resources to the Controller’s Office as required under Section VI, A.
Record-Keeping: A record of all approved non-salary compensation must be maintained by the Office of Human Resources.
Deferred Compensation
The State of North Carolina and the University of North Carolina offers SAAO employees options for deferred compensation, including insurance programs. Unless expressly approved by the UNC Board of Governors, UNCW may not provide any other employer paid or privately paid options for deferred compensation to its employees.
For purposes of this policy, deferred (or delayed) compensation (or salary) is broadly defined to include, but not be limited to, any employer payment or contribution paid (1) directly to an employee, (2) to the employee’s account or plan, or (3) to a person acting in a capacity similar to a trustee for the employee, which is paid later than the regular or next subsequent payment cycle, except for an error that is promptly corrected upon discovery. Delayed and deferred compensation also includes any retirement plans or accounts, annuities, life insurance that accumulates cash value, and traditional 457 deferred compensation plans. This definition includes both tax-qualified and non-qualified plans and any other similar form of payment, whether tax-sheltered or not.
Non-Salary or Deferred Compensation of the Chancellor
Other than a state-provided car or a car of comparable value, required residence at Kenan House, work-related club memberships, reimbursement of housing/moving/relocation expenses upon initial employment, and benefits uniformly provided to EHRA employees, only the President and/or Board of Governors may approve non-salary or deferred compensation for the Chancellor. The funding source for non-salary compensation for the Chancellor, other than that specified in this paragraph, shall not be state funds. An exception may be considered by the President and/or Board of Governors; however, club memberships may never be paid with state funds.