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2006 Minnesota Statutes

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43A.17 SALARY LIMITS, RATES, RANGES AND EXCEPTIONS.
    Subdivision 1. Salary limits. As used in subdivisions 1 to 9, "salary" means hourly, monthly,
or annual rate of pay including any lump-sum payments and cost-of-living adjustment increases
but excluding payments due to overtime worked, shift or equipment differentials, work out of
class as required by collective bargaining agreements or plans established under section 43A.18,
and back pay on reallocation or other payments related to the hours or conditions under which
work is performed rather than to the salary range or rate to which a class is assigned. For
presidents of state universities, "salary" does not include a housing allowance provided through a
compensation plan approved under section 43A.18, subdivision 3a.
The salary, as established in section 15A.0815, of the head of a state agency in the executive
branch is the upper limit on the salaries of individual employees in the agency. However, if an
agency head is assigned a salary that is lower than the current salary of another agency employee,
the employee retains the salary, but may not receive an increase in salary as long as the salary is
above that of the agency head. The commissioner may grant exemptions from these upper limits
as provided in subdivisions 3 and 4.
    Subd. 2. General compensation. For classes or positions covered under the provisions of
section 43A.18, subdivision 1, the commissioner shall negotiate compensation. For classes or
positions covered under the provisions of section 43A.18, subdivisions 2 and 3, the commissioner
shall establish compensation. Employees covered under section 43A.18 shall receive salary at the
appropriate single rate or within the limits of the salary range to which their class is assigned or
their position compared except for any lump sum payments including cost of living lump sum
payments. The commissioner may grant further exemptions from this subdivision as provided in
subdivisions 3, 5, 6, and 7.
    Subd. 3. Unusual employment situations. (a) Upon the request of the appointing authority,
and when the commissioner determines that changes in employment situations create difficulties
in attracting or retaining employees, the commissioner may approve an unusual employment
situation increase to advance an employee within the compensation plan.
(b) If the commissioner determines that a position requires special expertise necessitating a
higher salary to attract or retain qualified persons, the commissioner may grant an exemption not
to exceed 120 percent of the salary of the head of the agency or the maximum rate established
for the position, whichever is less.
(c) The following conditions apply to a request under paragraph (a) to advance an employee
within a compensation plan or under paragraph (b) to exceed the salary of the agency head:
(1) the appointing authority making the request must submit a detailed written statement
for each position contained in the request, specifying the changes in employment situations that
create difficulties in attracting or retaining an employee for the position;
(2) the commissioner shall review each proposal giving due consideration to salary rates paid
to other employees in the same class and agency and, if other conditions in this paragraph are met,
may approve any request that in the commissioner's judgment is in the best interest of the state;
(3) the action must be consistent with applicable provisions of collective bargaining
agreements or plans adopted under section 43A.18;
(4) each increase or exemption must be separately documented for each employee or position
and may not be applied to groups of employees; and
(5) the commissioner shall report the granting of a request to the chair of the Legislative
Coordinating Commission within three working days.
    Subd. 4. Exceptions. (a) The commissioner may without regard to subdivision 1 establish
special salary rates and plans of compensation designed to attract and retain exceptionally
qualified doctors of medicine and doctors of dental surgery. These rates and plans shall be
included in the commissioner's plan. In establishing salary rates and eligibility for nomination for
payment at special rates, the commissioner shall consider the standards of eligibility established
by national medical specialty boards where appropriate. The incumbents assigned to these special
ranges shall be excluded from the collective bargaining process.
(b) The commissioner may without regard to subdivision 1, but subject to collective
bargaining agreements or compensation plans, establish special salary rates designed to attract
and retain exceptionally qualified employees in the following positions:
(1) information systems staff;
(2) actuaries in the Departments of Health, Human Services, and Commerce; and
(3) epidemiologists in the Department of Health.
    Subd. 5. Salary on demotion; special cases. The commissioner may, upon request of an
appointing authority, approve payment of an employee with permanent status at a salary rate
above the maximum of the class to which the employee is demoted. The commissioner shall take
such action as required by collective bargaining agreements or plans pursuant to section 43A.18.
If the action is justified by the employee's long or outstanding service, exceptional or technical
qualifications, age, health, or substantial changes in work assignment beyond the control of
the employee, the commissioner may approve a rate up to and including the employee's salary
immediately prior to demotion. Thereafter, so long as the employee remains in the same position,
the employee shall not be eligible to receive any increase in salary until the employee's salary is
within the range of the class to which the employee's position is allocated unless such increases
are specifically provided in collective bargaining agreements or plans pursuant to section 43A.18.
    Subd. 6. Salary on transfer. The commissioner may authorize an employee transferring
between two classes established as equivalent for purposes of transfer to retain a rate of
compensation above the maximum of the range of the class to which the employee is transferring.
The commissioner shall take such action as required by a collective bargaining agreement or plans
pursuant to section 43A.18. Thereafter, so long as the employee remains in the same class, the
employee shall receive an increase in salary only as provided pursuant to applicable collective
bargaining agreements or plans pursuant to section 43A.18, until the employee's salary is within
the range of the class to which the position is allocated.
    Subd. 7. Injured on duty pay. Notwithstanding section 176.021, subdivision 5, the
commissioner may provide for injured on duty pay through collective bargaining agreements or
plans pursuant to section 43A.18.
    Subd. 8. Accumulated vacation leave. The commissioner of employee relations shall not
agree to a collective bargaining agreement or recommend a compensation plan pursuant to section
43A.18, subdivisions 1, 2, 3, and 4, nor shall an arbitrator issue an award under sections 179A.01
to 179A.25, if the compensation plan, agreement, or award permits an employee to convert
accumulated vacation leave into cash before separation from state service.
This section does not prohibit the commissioner from negotiating a collective bargaining
agreement or recommending approval of a compensation plan which: (1) permits an employee
to receive payment for accumulated vacation leave upon beginning an unpaid leave of absence
approved for more than one year in duration if the leave of absence is not for the purpose of
accepting an unclassified position in state civil service; (2) permits an employee to receive
payment for accumulated vacation leave upon layoff; or (3) permits an employee to receive
payment for accumulated vacation leave if a change in employment results in the employee
being ineligible to accrue further vacation leave.
    Subd. 9. Political subdivision compensation limit. (a) The salary and the value of all other
forms of compensation of a person employed by a political subdivision of this state, excluding a
school district, or employed under section 422A.03 may not exceed 110 percent of the salary of
the governor as set under section 15A.082, except as provided in this subdivision. For purposes of
this subdivision, "political subdivision of this state" includes a statutory or home rule charter city,
county, town, metropolitan or regional agency, or other political subdivision, but does not include
a hospital, clinic, or health maintenance organization owned by such a governmental unit.
(b) Beginning in 2006, the limit in paragraph (a) shall be adjusted annually in January. The
limit shall equal the limit for the prior year increased by the percentage increase, if any, in the
Consumer Price Index for all-urban consumers from October of the second prior year to October
of the immediately prior year.
(c) Deferred compensation and payroll allocations to purchase an individual annuity contract
for an employee are included in determining the employee's salary. Other forms of compensation
which shall be included to determine an employee's total compensation are all other direct and
indirect items of compensation which are not specifically excluded by this subdivision. Other
forms of compensation which shall not be included in a determination of an employee's total
compensation for the purposes of this subdivision are:
(1) employee benefits that are also provided for the majority of all other full-time employees
of the political subdivision, vacation and sick leave allowances, health and dental insurance,
disability insurance, term life insurance, and pension benefits or like benefits the cost of which
is borne by the employee or which is not subject to tax as income under the Internal Revenue
Code of 1986;
(2) dues paid to organizations that are of a civic, professional, educational, or governmental
nature; and
(3) reimbursement for actual expenses incurred by the employee which the governing
body determines to be directly related to the performance of job responsibilities, including any
relocation expenses paid during the initial year of employment.
The value of other forms of compensation shall be the annual cost to the political subdivision
for the provision of the compensation.
(d) The salary of a medical doctor or doctor of osteopathy occupying a position that the
governing body of the political subdivision has determined requires an M.D. or D.O. degree is
excluded from the limitation in this subdivision.
(e) The commissioner may increase the limitation in this subdivision for a position that the
commissioner has determined requires special expertise necessitating a higher salary to attract
or retain a qualified person. The commissioner shall review each proposed increase giving due
consideration to salary rates paid to other persons with similar responsibilities in the state and
nation. The commissioner may not increase the limitation until the commissioner has presented
the proposed increase to the Legislative Coordinating Commission and received the commission's
recommendation on it. The recommendation is advisory only. If the commission does not give
its recommendation on a proposed increase within 30 days from its receipt of the proposal,
the commission is deemed to have made no recommendation. If the commissioner grants or
granted an increase under this paragraph, the new limitation shall be adjusted beginning in August
2005 and in each subsequent calendar year in January by the percentage increase equal to the
percentage increase, if any, in the Consumer Price Index for all-urban consumers from October of
the second prior year to October of the immediately prior year.
    Subd. 10. Local elected officials; certain compensation prohibited. The compensation
plan for an elected official of a statutory or home rule charter city, county, or town may not include
a provision for vacation or sick leave. The salary of an official covered by this subdivision may not
be diminished because of the official's absence from official duties because of vacation or sickness.
    Subd. 11. Severance pay for certain employees. (a) For purposes of this subdivision,
"highly compensated employee" means an employee of the state whose estimated annual
compensation is greater than 60 percent of the governor's annual salary, and who is not covered
by a collective bargaining agreement negotiated under chapter 179A.
(b) Severance pay for a highly compensated employee includes benefits or compensation with
a quantifiable monetary value, that are provided for an employee upon termination of employment
and are not part of the employee's annual wages and benefits and are not specifically excluded by
this subdivision. Severance pay does not include payments for accumulated vacation, accumulated
sick leave, and accumulated sick leave liquidated to cover the cost of group term insurance.
Severance pay for a highly compensated employee does not include payments of periodic
contributions by an employer toward premiums for group insurance policies. The severance pay
for a highly compensated employee must be excluded from retirement deductions and from any
calculations of retirement benefits. Severance pay for a highly compensated employee must be
paid in a manner mutually agreeable to the employee and the employee's appointing authority
over a period not to exceed five years from retirement or termination of employment. If a retired
or terminated employee dies before all or a portion of the severance pay has been disbursed, the
balance due must be paid to a named beneficiary or, lacking one, to the deceased's estate. Except
as provided in paragraph (c), severance pay provided for a highly compensated employee leaving
employment may not exceed an amount equivalent to six months of pay.
(c) Severance pay for a highly compensated employee may exceed an amount equivalent to
six months of pay if the severance pay is part of an early retirement incentive offer approved by
the state and the same early retirement incentive offer is also made available to all other employees
of the appointing authority who meet generally defined criteria relative to age or length of service.
    Subd. 12.[Repealed, 1999 c 221 s 9]
History: 1981 c 210 s 17; 1982 c 560 s 26; 1983 c 299 s 12-14; 1984 c 462 s 27; 1Sp1985 c
17 s 7; 1986 c 444; 1988 c 667 s 7,8; 1990 c 571 s 20,21; 1992 c 505 s 1; 1992 c 549 art 5 s 2;
1993 c 315 s 5,6; 1993 c 345 art 5 s 2; 1995 c 248 art 2 s 7; 1996 c 425 s 4; 1997 c 202 art 2 s
33; 2Sp1997 c 3 s 9,10; 1998 c 351 s 2; 1998 c 366 s 49; 1998 c 398 art 5 s 1,2; 1999 c 182 s 11;
1999 c 221 s 3; 1Sp2003 c 1 art 2 s 60; 2005 c 169 s 1; 2006 c 282 art 16 s 1

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