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Commissioners revisit employee merit pay

Originally published: Dec. 24
Last modified: Dec. 24

Adam Orr

For the second time in three months, the Ashe County Board of Commissioners discussed altering the pay structure of current county employees in favor of a merit-based system.

“I'd like to have some ideas as to how others counties do it,” Ashe County Commissioner William Sands said Dec. 16. “I came from a company with merit pay; it worked well, but was quite involved.”

On Sept. 16, commissioners first discussed the county’s current longevity pay arrangement and the possibility of exchanging the system for a merit-based structure to begin July 1, 2014.

Currently, county employees are given a 2.5 percent raise at the end of their fourth seventh and ninth years of service and every year thereafter through 30 years of employment, according to Ashe County Finance Director Sandy Long.

Certain employees have received raises in consecutive years —  which commissioners questioned in previous work sessions —  but Long said those employees are on a “catch-up plan” that dates back to the beginning of the county’s longevity pay system in 1994.

“Whenever they put that system into effect, there were several employees the (county) didn’t have enough money to put people where they were supposed to be,” Long said. “So, there were several that have been on what they call the ‘catch-up plan,’ so they have received longevity each year until they get on the step where they need to be.”

And some employees are still not on the correct “step” based on their time in service and continue to receive raises in consecutive years, Long said.

Sands, who also serves as a detective with the Ashe County Sheriff’s Office, said he questioned how a merit system could govern the way the ACSO or Register of Deeds Office compensates its employees.

“I just don’t know how it would work,” Sands said. “I’d like to see people that work hard get the benefit from it. Maybe it is something the manager could look at other counties to see how it works there. I don’t think it is something we could just jump in to.”

Ashe County Commissioner Judy Poe, who said she was in favor of a merit pay system, said, “If we’re looking at this seriously we’ll have to get with it. We’ve been talking about this for a year.”

Poe reminded commissioners that Ashe County Manager Sam Yearick will begin drafting the fiscal year 2014-15 county budget in February and would need commissioners’ decision before he starts.

“I would suggest Sam look at similar counties by population, and see what kind of system they have and give us the facts of both,” Poe said.

Ashe County Board of Commissioners Chairman Gary Roark said a merit pay system could not be implemented “overnight.”

“You’ve got some that are really working their butt off, and others that are really laid-back,” Roark said. “With a merit system, you could give (hard workers) a raise that year without waiting three years. That was my only point.”

Ashe County Commissioner Larry Rhodes said he was open to seeing how other counties compensate their employees, but said the county would have to make sure a merit pay system remains fair to all employees.

“I’m open to anything if we see how other counties work,” Rhodes said. “In private enterprise you could have the merit system; it becomes the supervisor’s responsibility. I’m open to looking at it. There may be systems out there that are better.”

Rhodes cautioned that a merit pay system could become unfairly subjective, however.

“It doesn’t always reflect those that are doing more work,” Rhodes said. “That’s the other thing about the merit system, you have to watch out for the ‘good old boy.’”

Ashe County Attorney John Kilby told commissioners he still sees no “clear-cut answer” on action the board can take in modifying longevity pay.

“If it is treated as deferred compensation, then it is very difficult to change it for those already in the program,” Kilby said. “You can certainly change it for new hire, but for people that were hired under it, our reading lends you to think that it may be a problem.”

After researching the system, Kilby said in September that it is clear commissioners could eliminate the longevity pay system for new employees, but said eliminating longevity pay for current employees becomes “much less clear.”

No current North Carolina case law exists concerning the issue, Kilby said, although courts in Montana and California have ruled on similar issues.

“One of the main issues that get addressed by the courts — and it's not at all unusual for these things to be litigated by the courts — is determining whether it is deferred compensation as opposed to current compensation as to the intent of the plan,” he said.

In at least two cases, Kilby said the courts determined the purpose of the longevity plan was to induce longer terms of service.

“If that is the case, it bolsters the argument that it is vested ... and (the plan) becomes harder to adjust,” Kilby said.

Kilby said commissioners would continue to have “absolute control” over current compensation and would likely have the authority to reduce current compensation to offset an increase in longevity pay.

Research also indicates commissioners may not be able to reduce the percentage of the raise for current employees, but may be able to do so for new employees in the future, according to Kilby.
No immediate action was taken by the board.

For more information and stories, see Ashe Mountain Times.