Ohio University

Annual Increases

Routine, annual pay raises are applied to the employee's existing base pay, and go into effect at the start of the fiscal year.  Employees must be employed before April 1 to be eligible for an annual increase. 

If an annual increase brings an employee’s pay to a value that is at or below the maximum for the pay grade of the job, then the entire increase will be added to the employee's base pay.

If an annual increase would bring the new pay to a value that exceeds the maximum for the pay grade of the job, then the employee's situation is described as "red-circled," and the raise will be provided as a combination of a (possibly zero) base pay adjustment together with a single lump-sum payment at the start of the fiscal year, according to the following method: If the old base pay is at or above the pay grade maximum, the base pay is frozen, unchanged, and the entire raise is provided in the lump-sum payment. If the old base pay is below the pay grade maximum (but so close to it that the increase would exceed the pay grade maximum), then a first portion of the raise is used to bring the new base pay up to the pay grade maximum, and the remaining portion of the raise is provided in the lump-sum payment.

Occasionally, Ohio University’s pay structure will be adjusted, changing the minimum and maximum for each pay grade by an amount that may be more, the same, or less than the standard raise for that year. As a result of pay structure movement, if the raise would bring the new pay to a value that is below the new minimum for the pay grade of the job, then the increase will need to be adjusted to at least the minimum of the new pay grade.

If the raise would bring the new pay to a value that is at or below the new maximum for the pay grade of the job, then the entire increase will be added to the employee's base pay. If the raise would bring the new pay to a value that exceeds the new maximum for the pay grade of the job, then the employee's situation is described as "red-circled," and the raise will be provided as a combination of a (possibly zero) base pay adjustment together with a single lump-sum payment at the start of the fiscal year, according to the following method: If the old base pay is at or above the new pay grade maximum, the base pay is frozen, unchanged, and the entire raise is provided in the lump-sum payment. If the old base pay is below the new pay grade maximum (but so close to it that the increase would exceed the pay grade maximum), then a first portion of the raise is used to bring the new base pay up to the new pay grade maximum, and the remaining portion of the raise is provided in the lump-sum payment.

The lump-sum portion of a raise is subject to retirement withholding, and therefore does count in the calculation of retirement income.  The result of this approach is that normal raises "compound," with each year's raise being calculated on a higher base pay, except for "red-circled" employees, whose base pay does not increase until the pay structure "catches up" with them.