Durham, NC - Following are answers to questions about the University's compensation plan announced by President Richard Brodhead as part of his recent financial update.

1. Who is eligible for the $1,000 one-time lump sum payment?

• The lump sum payment applies to all staff in regular (not temporary) positions in the University who make an annualized, full-time equivalent base salary of $80,000 ($6,666.67/month for exempt staff or $38.47/hour for non-exempt staff) or less and who are scheduled to work 20 hours or more per week (.5 FTE or more). Amounts for eligible staff scheduled to work fewer than 40 hours per week (1.0 FTE) will be prorated.
• All benefits-eligible faculty whose annual salary is $80,000 or less will receive a one-time, lump sum payment of $1,000 provided they are successfully meeting the expectations of their school or department. Faculty on temporary appointments of a year or less are not eligible for the lump sum payment. The same policy will apply to full time faculty who have salaries of $80,000 or less and who do not have clinical effort and compensation in the Private Diagnostic Clinic.
• Information regarding Job Family 27 and Post-Doctoral Associates will follow in a separate communication.
• Individuals must be hired before January 1, 2010.
• Staff must have a performance evaluation of "Successful" or "Exceptional." Individuals with a "Needs Improvement" rating or who are in a performance improvement plan as of June 30 are not eligible.
• Employees represented by collective bargaining units should refer to their respective contract agreements for guidelines on any negotiated increase.
• The lump sum payment will not change base annual salaries for eligible University employees.

2. When will the payment be made?

The lump sum payment will be made in July 2010 as part of the normal performance management cycle for the University. Payments for eligible hourly-paid staff (biweekly payroll) will be included in the July 16 pay date. Eligible faculty and salaried staff (monthly payroll) will receive the payment on the July 23 pay date.

3. Why was $80,000 chosen as the salary cap for those receiving a lump sum payment?

Due to the impact of the global recession, the University continues to have limited resources. The funds that are available will be used to provide a lump sum payment of $1,000 to as many people as possible beginning with the lower pay ranges and moving up. The threshold for eligibility moved from $50,000 last year to $80,000 this year.

4. Will this program and other cost saving efforts help avoid the need for layoffs?

Thanks to initiatives such as the retirement incentive programs, close attention to vacancy management, and improvements to efficiency at all levels, there has been significant progress with respect to reducing the University's operating budget by 2012. With a focus on the changes already underway and a continued commitment to further reduce costs as we move forward, the probability of large scale layoffs has been substantially reduced.

5. Other employers are reducing benefits; will Duke do the same?

Last year, Duke invested about $400 million into benefits and will spend an additional $25 million this year to cover increasing costs. This investment represents a significant part of total compensation at Duke. Providing a lump sum payment this year will save about $22 million compared to the cost of providing a 3 percent increase to base pay. This compensation approach, combined with other cost-saving efforts, has helped preserve jobs and protect benefits at Duke. There are no plans to reduce benefit coverage or contributions to the retirement, health care, tuition support and related benefit programs in 2010.

6. Will performance evaluations still be done this year?

Yes, the performance evaluation is an important part of professional and career development and is essential for setting goals for the coming year. Additionally, the lump sum payment is tied to a performance rating of "Successful" or "Exceptional." Anyone rated as "Needs Improvement" or who is in a performance improvement plan as of June 30 is not eligible for the lump sum payment.

7. I was hired after January 1, 2010. Will I receive a lump sum payment?

No, staff and faculty with limited University service (hired on or after January 1, 2010) will not be eligible for a lump sum payment this July.

8. Does the $80,000 threshold include shift differential or overtime?

No, the $80,000 threshold is based on an individual's annualized, full time equivalent base salary without any premium pay, shift differential, or overtime.

9. If I am eligible to receive the lump sum payment, will it be subject to deductions?

Yes, the payment is subject to all applicable state, federal and FICA taxes.

10. If I am scheduled to work less than full time, will I be eligible for the lump sum payment?

You must be benefits eligible, which means that your regular work schedule is at least 20 hours/week, and your hourly rate cannot exceed $38.47/hr. Faculty and salaried staff cannot exceed a monthly full-time equivalent of $6666.67.

11. Will the senior officers of the University receive a pay increase this year?

No.

12. Does the lump sum payment apply to faculty and staff in the School of Medicine and School of Nursing?

Yes, the lump sum payment applies to all units in the University, including the School of Medicine and School of Nursing.

13. Does this lump sum payment apply to staff in Duke University Health System (DUHS) as well?

No. Duke University Health System (DUHS) determines compensation issues on a different calendar year from the University, and guidance for the next year will be provided to DUHS employees at a later date.

14. Will there be any changes to the pay ranges (minimums and maximums) for next year?

Based on updated market survey and economic forecasts, most pay ranges will not require any adjustment for next year.