Extra and Supplemental Compensation

Purpose

The university is a dynamic environment, with varying needs and opportunities for its faculty and staff continually evolving.  While the university strives to ensure that employees’ base duties and compensation are in keeping with those needs and opportunities, such equilibrium remains an aspirational goal.  To manage this dynamic, the university engages the talents of its employees to take on additional short-term duties, and in return provides compensation. In addition, external agencies likewise engage faculty and staff.  These tasks can be a highly appropriate use of faculty and staff time and talent but occasionally can create challenges if employees become over-committed. It is an important ethical responsibility of the university to ensure appropriate use of taxpayer and student funding, as well as compliance with federal requirements on external funding.  To that end, the university provides the following policy guidelines concerning extra and supplemental compensation.

Extra Compensation

Faculty and staff can be compensated for assignments for which they are specifically qualified, which advance the mission of the university, but which fall outside the expectations associated with the employee's current job description. To avoid conflict of commitment, the additional duties must be feasible and must not interfere with or diminish the faculty or staff member's capacity to meet the expectations of the primary contract. The guidelines provided herein are not intended to redefine compensable activities, but rather to establish a means by which systematic authorization is received for such activities and to establish procedures to monitor the time commitment required to perform the extra assignment.

The following guidelines apply to all faculty, and staff on contract, regardless of the duration of their contract:

• Each employee has an Institutional Base Salary (IBS) that is the annual compensation that the university pays an employee, whether their time is spent on teaching, research, service, or other administrative duties. The contract period includes weekends and university break periods. When an employee on a full-time (100%) contract with the university receives compensation from a university account during the assigned contract period which exceeds the institutional base salary, and when that compensation is offered in exchange for the performance of duties not legitimately required within the scope of the primary contract, this additional payment is defined as extra compensation. Extra compensation begins when the payment received from the university for any one pay period exceeds the faculty or staff member's semi-monthly base salary.
• The rate of extra compensation shall be determined by the director of the source of funds with approval by the appropriate director/chair, dean and vice-president. Extra compensation on externally sponsored projects is permitted if it is in accordance with the sponsor's rules and regulations.

The Federal Government's Uniform Guidance 2 CFR 200 applies to extra compensation paid in whole or in part from all federally funded projects including those for which funds received by the University are from another entity, e.g., from a state agency or other university that has received federal funds for the project in question. The State of Illinois adopted the Uniform Guidance under the Grant Accountability and Transparency Act (GATA; 30 ILCS 708/1 et seq.). Uniform Guidance places certain restrictions on extra compensation paid from projects sponsored with Federal funds. The general rule is that Federal and/or State funds may only be paid when specific criteria (listed below) are met, may not be used to provide additional compensation at a rate that exceeds institutional base salary and only when it is written into an award or with prior agency written approval. Approvals for extra compensation must be obtained before commencement of work. Obtaining agency approval may prove challenging, particularly for pass-through projects with non-federal agencies, but approval is required, nonetheless.

Uniform Guidance 2 CFR 200.430 states in part: "In no event will charges to sponsored agreements, irrespective of the basis for computation, exceed the proportionate share of the base salary for that period. The principle applies to all members of the faculty at an institution.

Uniform Guidance further states that Intra-IHE [Institution of Higher Education] consulting by faculty should be undertaken as an IHE responsibility requiring no compensation in addition to IBS. However, in unusual cases where consultation is across departmental lines or involves a separate or remote operation, and the work performed by the faculty member is in addition to their regular responsibilities, any charges for such work representing additional compensation above IBS are allowable provided that such consulting arrangements are specifically provided for in the award or has received prior approval in writing from the awarding agency.” This guidance also extends to State of Illinois awards per GATA.

Because faculty cannot consult on their own project(s), extra compensation for principal investigators (PIs), co-investigators, and other key personnel would not meet this UG criterion except in very rare and narrow circumstances.

In most cases, time spent on externally sponsored projects will be integrated into the individual's regular duties and responsibilities assigned by the University. This may warrant a reduction in duties and responsibilities assigned by the University, e.g., full time faculty members on nine-month academic year contracts may receive a reassignment from one or more academic assignments to perform the project. In the case of other non-faculty exempt employees, the duties and responsibilities of the externally sponsored project also may warrant a reduction in the regular duties and responsibilities assigned by the University. In both cases, the reduction in regular duties and responsibilities assigned by the University should be equivalent to the time expected to be spent on the externally sponsored project.

On those occasions when extra compensation paid from projects sponsored with Federal and/or state funds is warranted and approved, the dedication of time to this project will not be considered as warranting any reduction in the regular duties and responsibilities assigned by the University. Faculty or other exempt persons receiving extra compensation are expected to perform their regular duties and responsibilities assigned by the University.

In accordance with University regulations, payment of extra compensation from federally and/or state funded awards as governed by Uniform Guidance allows for such payments “in unusual circumstances” when all of the following conditions are met:

• The work performed is in addition to the faculty member's regular responsibilities.
• Consultation is across departmental lines or involves a separate or remote operation.
• Consulting arrangements are specifically provided for in the award or with prior written approval from the agency.

If an employee is not key personnel (i.e., and thus already excluded from an intra-university consulting role on their own project), all three criteria should be evaluated, keeping in mind that:

• Faculty have broad responsibilities across research, teaching, and service, with considerable discretion and academic freedom. To meet the uniform guidance criterion for intra-university consulting that is extra-compensated the activities must go beyond these broad responsibilities. Such intra-university consulting that is extra-compensated, for instance, would not involve co-authorship of reports, articles, and other products from the funded project, nor be reported on annual service reports or promotion and tenure documents. If instead the intent was to consider such activities as part of the faculty member’s usual salaried employment duties, the activities could be incorporated through release time
• An employee’s joint appointment, affiliation relationship (e.g., a center), or research, teaching or service portfolio (e.g., their lab) would not be considered across department lines or separate/remote location.  Likewise, given the predominance of hybrid and virtual activities, projects that include activities with external partners, or that take place away from the main DeKalb campus, would generally not meet the condition of separate/remote location.

The proposal or request presented to the agency must clearly state that the individual will receive above 100% of institutional base salary compensation in one or more pay periods (e.g., not simply state “additional pay”). 

• Directors/chairs, deans, vice-presidents, the president, and their assistants and associates who are tenured or on tenure-track appointments periodically seek teaching assignments in order to maintain academic competency and currency within their discipline. Such teaching assignments are considered to be part of an academic administrator's regular duties. When programmatic need dictates a teaching assignment for a tenured or tenure-track administrator, extra compensation may be paid only if approval is obtained in advance from the Provost. The Provost will review all such requests in terms of programmatic need, availability of other faculty, and the frequency of such assignments.
• Extra compensation associated with teaching assignments for staff members without academic rank will require approval of the staff member's department and division head as well as the Provost. Such staff cannot be granted both additional compensation and time off from their regularly scheduled duties. Extra compensation for non-instructional activities will require approval at the appropriate departmental and divisional levels.
• The accumulation of extra compensation will be monitored by Human Resource Services and reported quarterly to the employee's dean and/or division head. Extra compensation in excess of 20 percent of an employee's base salary will require written assurances from the authorizing administrator that the faculty or staff member is capable of fulfilling the expectations of the primary contract.
• Compensation which exceeds the contracted base salary but which does not require the performance of duties beyond those specified in the primary contract is covered under the university's Supplemental Compensation policy. For purposes of this extra compensation policy, “base salary” is assumed to include any approved supplemental compensation.

Supplemental Compensation

As distinguished from extra compensation, supplemental compensation does not require the performance of duties other than those associated with the normal range of assignments required in a given position or job description.

Supplemental compensation is ordinarily temporary. It may be allocated as a single payment or spread over the course of the primary contract. It is typically provided as a reward for outstanding performance (e.g. Presidential Research and Teaching awards), for purposes of staff retention (e.g. corporate professorships, endowed chairs), or as part of a retirement program. It may be provided to compensate an employee for overload responsibilities but only in those instances in which the normal load associated with the position has been defined in writing in advance of the overload assignment, which must be clearly delineated in writing as well.

Funding for supplemental compensation is often derived from donations or gifts provided to the university by external private entities. Examples of supplemental fund sources include alumni gifts, corporate donations, endowments of named professorships or chairs. No services (other than those normally associated with the position) shall be provided as an implicit or explicit condition of the receipt of any funds allocated for purposes of supplemental compensation.

In most circumstances, payments for supplemental compensation should not exceed 50 percent of an employee's total base contract salary (inclusive of applicable extra compensation and summer compensation) on an annual basis. Moreover, supplemental compensation allocated toward a particular employee should not be derived from the same external fund source for a period of time exceeding five consecutive years. Professorships and Endowed Chairs, however, may be established on a permanent basis, provided they are negotiated and approved by the NIU Foundation and the Office of the Provost or designee. The selection and appointment of candidates for endowed chairs or corporate-sponsored professorships must involve the appropriate departmental and/or college faculty personnel committees. The Foundation and the Office of the Provost will review these appointments and the attendant compensation periodically to assure consistency with donor intentions, adequacy of donated funds, and the exercise of appropriate fiscal controls.

Supplemental compensation amounts allocated to faculty and administrators shall be determined and approved by the appropriate director/chair, dean and vice president. The additional compensation form will be utilized for supplemental compensation requests, with a notation recommending applicability of the supplemental compensation policy. Clearly described criteria establishing the basis for providing additional compensation under the supplemental compensation policy, as described above, must be appended to the additional compensation form. All supplemental compensation requests will be evaluated and approved by the Office of the Provost or designee.

For purposes of compliance with this policy, all supplemental compensation will be reported to the Provost and appropriate vice presidents by Human Resource Services on a semi-annual basis.

Policy originally adopted as part of the Academic Policies & Procedures Manual by Administrative Cabinet, August 23, 1995 
Changes approved by APPM Advisory Committee January 4, 2007