Local Bonus Guidelines for FAS Managers

Interim coverage pay is not a bonus, but it is an additional payment type that is available to provide additional compensation to exempt FAS employees who are providing coverage at a higher grade level for a sustained period of time (usually three months or longer). (See below for how to manage interim coverage provided by non-exempt staff.) Interim coverage may be necessary when an employee is asked to cover for a departing colleague or manager, for colleagues on an extended leave, or during staffing transitions. However, managers are strongly encouraged to consider all available options for coverage other than assigning the work to another employee (e.g., hiring a temporary employee to provide coverage or temporarily pausing some duties, when possible), as these interim coverage situations—particularly when they extend for longer periods of time—can lead to burn out and other long-term employee relations issues.

The best practice for managing this coverage and payment is to draft a letter to the employee stating the terms and conditions of the coverage and the payment, the estimated start and end dates, the specific higher-level duties and responsibilities the employee will be expected to perform, and how success will be measured during the interim coverage period.

Since interim coverage pay is an additional payment over and above the regular salary, it can be scheduled to be awarded on a regular basis during the coverage period (e.g., as an addition to their biweekly paycheck) or be paid out in a lump sum at the end of the coverage period.

Eligible employees: Only exempt benefits-eligible staff are eligible for interim coverage payments. See below for interim coverage compensation for non-exempt staff.

Earnings code: ICP (Interim Coverage Payment)

Recommended award amounts: There are two approaches managers can take to determine an appropriate payment amount for interim coverage pay. The recommended approach is to ask for an interim coverage payment estimate based on the job code of the vacant position and an estimate of the percentage of time that will be spent performing the higher-level duties. The FAS HR compensation group can provide an estimate of the additional payment based on the employee’s current salary and an estimate of the salary the employee would earn in the higher-graded job code according to the interim essential functions they will be performing.

A second approach is available if the interim coverage was not planned for and needs to be paid out after the fact as a one-time, lump-sum payment amount using the recommended amounts provided for project bonuses as guidance:

Recommended award amounts for one-time, lump-sum payments:

Adjustments to base salary for exempt employees’ interim coverage payments are NOT recommended. Salary adjustments can interfere with employees’ benefits tiers and annual salary increase calculations, requiring additional administrative overhead to manage appropriately.

Timing: Best practice is to plan for interim coverage, drafting a letter of understanding for the employee providing coverage, prior to the coverage beginning. The letter should state the terms and conditions of the coverage and the payment amount for the specified coverage period. If the manager has not planned for the coverage and is looking to compensate an exempt employee for coverage after the fact, the lump-sum payment should be made as soon as possible.

How to pay for interim coverage: Interim coverage payments are paid for out of departmental vacancy savings from the position being covered. Interim coverage payments should be paid using the employee’s regular costing.

Grossing up interim coverage payments: For FAS-wide equity and consistency and because of the significant increase in expenditure, departments are not permitted to gross up interim coverage payments.

Interim coverage for work in lower salary grades: Based on federal law, one of the criteria for exemption status is that exempt employees are paid a salary for their work, regardless of the number hours spent performing that work. Thus, when exempt employees provide coverage for a position with a lower salary grade in their unit, especially if the work is within their managerial purview, no additional compensation is warranted. However, in situations in which an employee is unexpectedly covering a lower-graded role for a long time, a spot or project bonus for going above and beyond may be appropriate.

There are uncommon situations where interim coverage payments may be considered for covering for a same-level or lower-level role elsewhere at the University. For example, if a department administrator in one department is asked to cover the work of a vacant department administrator role in another department, the second department may pay interim coverage payments to the covering department administrator. Please speak to your HR Consultant for guidance if you are considering this option.

The HUCTW Personnel Manual specifies that work occasioned by the absence of a supervisor or co-worker should be paid as extra compensation.

“Ordinarily, extra compensation should be paid for such work when it is anticipated that work will be performed for more than 20 work days when covering for a co-worker or for more than 7 days when covering for a supervisor. Extra compensation for such duties assigned for shorter periods of time may be considered. Extra compensation will be set at a negotiated rate appropriate to the work performed.”

Based on federal and state labor laws and the HUCTW contract, the ONLY proper way to compensate overtime-eligible staff taking on interim assignments as specified above is to change the base rate of pay during such time as the employee is providing coverage for the higher-level role. As such, all additional work assignments should be documented before the staff member begins such coverage, as outlined in the HUCTW contract. This ensures that any overtime calculations are managed appropriately. Also, it is particularly important that salary adjustments for non-exempt staff are made at the start of the assignment and are adjusted back down to pre-coverage levels upon completion of the interim coverage assignment. This will ensure that all hours working in the interim role are appropriately accounted for and paid.

The increased base rate of pay can be estimated based on the job code of the vacant position and an estimate of the percentage of time that will be spent performing the higher-level duties. The FAS HR compensation group can provide an estimate of the additional payment based on the employee’s current salary and an estimate of the salary the employee would earn in the higher-graded job code. The hourly rate of the employee would, then, be adjusted (using the "IPS - Interim Pay Start" action and action reason) starting the day interim coverage begins, then adjusted back to their pre-interim coverage hourly rate (using the "IPE - Interim Pay End" action and action reason) effective the day following the end of the interim coverage.