Re: Budget Updates: Salary Market Equity Program and Vacancy Holds
To: All employees
March 24, 2022
We are pleased to announce a significant enhancement to our budget call decisions for fiscal year 2021-22 (FY22) as well as a change in budgetary practices that will further support our campus community coming into FY23.
First, as promised we have finalized the market equity program foreshadowed under the FY22 Budget Call.
The FY22 Budget Call provided $200,000 toward a staff equity program with the commitment of it being matched in FY23. Today, we are pleased to announce that we are allocating the entirety of this funding immediately to provide a market equity adjustment to approximately 98 non-represented staff, totaling approximately $352,320. Several key aspects of the program include:
  • Targeting employees whose salaries are the lowest market compa-ratios. Not everyone will receive an adjustment, and increases will vary according to each participant’s individual pay circumstances.
  • Aligning salaries more closely to market data, thereby making our employees’ salaries more competitive compared to the market and creating incentives for our staff to continue their careers at UC Merced.
Additional details on the market equity program can be found on the Human Resources website. This program will take effect in April for all impacted staff. The remainder of the $400,000 allocated to this program once salary and benefits are finalized for FY23 will be carried forward for distribution in the market equity program in FY24.
Second, we will be suspending the four-month vacancy hold policy going into FY23 and replacing it with a conservation measure that will result in the provision of more funding to support critical campus needs.
Under the FY22 Budget Call the university instituted a cost savings initiative whereby divisions were required to provide four months of salary savings for every vacancy that arose to support the reduction of our campus’ structural deficit. 
Moving into FY23, we have elected to inject additional funding into our payroll to better support our staff when vacancies occur. We will be eliminating the four-month hold program and instead introducing a conservation structure for FY23, whereby only 2.5% of a division’s state and tuition funded staff salary, rather than the over 5% historically, will be retained centrally in anticipation of expected vacancies throughout the year.
The change in this policy will result in expected payroll savings of $2.5 million for FY23. These savings will be approximately $2 million less than FY22 under the four-month vacancy hold policy, thus providing divisions with more resources for FY23. This additional funding will allow managers to expand their utilization of temporary payroll measures (e.g., stipends) to better support their staff.
The reduction in our targeted payroll savings for FY23, combined with a significant market equity program, are intended to affirm our continued commitment to the university’s staff. It is critical to note that we are able to make these investments in the campus as we anticipate an increase in enrollment going into next year. We hope that as this enrollment growth continues it will allow us to further relax these controls and provide additional investments to increase both staff and faculty.
However, should our structural deficit resume its growth trajectory into the coming years we will have to revisit these measures. Therefore, our continued vigilance around our campus’ fiscal discipline and sustainability must remain a priority. 
Thank you for everything you have been and are doing to support the university. We look forward to our continued partnership as we thrive in the coming years and move toward our campus’ ambitions of being an R1 institution, serving over 15,000 students by 2030, and supporting their educational and social advancement.
Juan Sánchez-Muñoz, Ph.D.
Luanna Putney, Ph.D.
Associate Chancellor and Chief of Staff to the Chancellor
Kurt Schnier, Ph.D.
Interim Vice Chancellor and Chief Financial Officer