@NCCapitol

@NCCapitol

Newly exempt employees already pull in top salaries

Posted August 26, 2013
Updated August 27, 2013

Money

— With little fanfare over the last few weeks, more than 500 state government employees have arrived at work to find a letter waiting for them.

In dense legalese, it explains they will soon be designated "exempt" from the State Personnel Act.

"Generally, this means that policies and rules relating to disciplinary action, separation and appeals do not apply," one version of the letter reads, before asking for a signature to confirm notification.

What may be lost in this jargon is the practical effect of the memo: Within 10 days, these employees will become at-will workers in departments managed by political appointees. It also fails to mention that the status change comes straight from the governor.

Gov. Pat McCrory has said designating these employees exempt will give him and his cabinet secretaries more flexibility to streamline state government, hire and fire, reward strong performers and get rid of deadwood.

"We want to reward our talented state employees, but seat warmers must be a thing of the past," McCrory said during his State of the State address this year. "But I want to also say, we have to continue to attract, retain, reward and appreciate our state talent that works so hard for all of us in state government."

Gov. Pat McCrory Database: Exempt employees

An analysis by WRAL News shows most of these newly exempt employees are already paid at the top of their salary ranges. Compared with their nonexempt colleagues, who are overwhelmingly paid at the bottom of their pay scales, the difference is stark.

In the coming months, up to 500 additional employees will receive these letters in the mail, bringing the number of exempt workers tapped by the governor to 1,500. That increased cap, the result of a law signed by the governor last week, is more than triple the number for any governor in more than a quarter-century.

Findings not surprising, says personnel expert

Salaries for state employees are relatively prescribed.

Salary range distribution

Most state positions have matching salary ranges that set minimum and maximum pay. Mouse over the charts to how full-time exempt and nonexempt employees compare. Salary ranges that could not be matched were marked "N/A."

All full-time employees

Exempt employees

Similar job titles

Some positions have salaries set by law. For the 2,700 other positions in state government, the Office of State Human Resources is responsible for setting and publishing minimum and maximum pay ranges. Departments have the ability to set salaries for individual employees within those ranges based on experience and qualifications.

Using this salary range data, the state's public employee database and the list of exempt positions provided by the governor's office, WRAL News reviewed the compensation for the almost 1,000 currently exempt employees. Although governors can re-designate positions at any time, they're not required to issue notification of these changes for 180 days, making this the most accurate snapshot possible with publicly available data.

Most of these exempt workers – who serve in roles crucial to department management and policy-making – are paid far higher on their respective pay ranges than non-exempt employees.

Almost 60 percent of exempt employees earn salaries that rank in the top half of their pay range. By comparison, about 70 percent of full-time state employees earn in the bottom half of their salary ranges.

Even when the comparison is narrowed to employees with similar positions, exempt personnel still come out on top.

More than 5,000 state workers share the same job titles with those on McCrory's exemption list. Overall, workers with these titles overwhelmingly earn in the bottom half of their salary ranges.

Drake Maynard, who worked at the state personnel office and specialized in exempt designations before his retirement in 2010, said he's not surprised to see these employees at the top of their salary ranges – especially for those the governor has hired himself.

"These are the people that the governor is depending on to get his programs out among the state employees that he's responsible for and get that work accomplished," Maynard said. "Oftentimes, these people who come in with the governor might not have state government experience, so that salary is set when they come in."

For many of these employees, Maynard said, there may be good reasons for higher compensation, chief among them that they "may have been making that money legitimately in another job."

"These steps were put in to make sure that, as a general rule, the state doesn't pay more for work – and the talent and education and qualifications – than they want to," Maynard said in an interview last week. "The state's policy is to lag a little bit behind the market."

Staffers paid above salary ranges make up small minority

But very rarely, state workers are paid more than their salary ranges otherwise allow.

About 2 percent of exempt employees make salaries outside the range for their positions, compared with only 0.1 percent for state employees overall.

In terms of raw numbers, very few exempt employees – 16 so far – are paid outside their respective salary ranges, and the majority of these individuals last received a salary bump from a legislative increase in 2012. Others transferred from different agencies in 2013, and their salaries stayed the same.

New exempt hires paid above listed salary range

NameJob titleAgencySalaryMax. salary
listed
% above
max
Christine
Mulder
Deputy secretary,
communications
Public
Relations
Officer*
DOT $125,000 N/A* N/A*
Carol
Steckel
Director, Division
of Medical Assistance
Director DMA DHHS $210,000$136,900 53%
David
Richard
Director, Division
of Mental Health
Dir Div Of Mt
Hlt Mt Ret/sub
Abuse Serv
DHHS $150,000 $143,499 5%

*NOTE: DOT human resources says this is a "flat-rate" job title not comparable to other public relations officers in state government (whose salaries are capped at $65,204) and was created for Mulder to recognize her "experience and significant responsibilities" at the department. A spokesperson for the Department of Transportation said there is no salary range for these flat-rate titles.

But three McCrory hires – two health directors and a public relations officer at the Department of Transportation – make thousands more than their listed pay ranges would typically allow.

Carol Steckel, who heads up the state's $13 billion Medicaid program, makes $210,000. That's far above the $136,900 limit. The department's mental health administrator, Dave Richard, also makes slightly more than his salary cap of $143,499. In both of these cases, DHHS spokesman Ricky Diaz said in an email, the state personnel office ruled their experience levels justified higher salaries.

Diaz pointed out that, under the Perdue administration, both positions were also paid more than the maximum salary.

"Overall, DHHS’ payroll is approximately $21.9 million less than one year ago," Diaz said in the email.

Cris Mulder, the public relations officer who serves as Transportation Secretary Tony Tata's deputy secretary of communications, is paid almost double the maximum range for the "public relations officer" role listed in both employee records and the state salary plan, although officials say her actual classification is different and more reflective of the responsibilities she carries out for the department.

She's paid only slightly more than Ted Vaden, who previously filled the position under Perdue. Unlike Mulder however, he was classified as a "deputy secretary" in the state's employment system and earned the maximum $118,815 for that job title. Mulder came to the department from the Wake County Public School System, where she earned $134,090 as chief of family and community engagement, according to a Wake County spokesperson.

Through a DOT spokesperson, a human resources staffer said Mulder's "public relations officer" title listed in state employment records is a different type of classification that pays a flat-rate salary of $125,000. This classification is not listed in the state salary plan.

In an email Monday evening, Office of Human Resources Public Information Officer Margaret Jordan said Mulder's "flat-rate" job title is not comparable to other public relations officers in state government.

"Because we did not currently have a classification that clearly fit her role, an existing flat-rate title was used with the intent to study the role in the future," Jordan wrote.

Just like their nonexempt colleagues, exempt workers are still subject to compensation rules. These rules are designed "to cut down as much as possible on jockeying for higher salaries – for whatever the reason might be," Maynard said.

For some employees, however, the personnel office considers a number of factors before granting an exception.

"This is not just an arbitrary thing," State Human Resources Director Neal Alexander said in an interview in early August. "There is a process that is in place that state personnel has the accountability to renew and sign off on both the qualifications and the compensation of the individual they're considering."

High salaries raise eyebrows 

McCrory's administration has already come under fire over raises and high starting salaries within his cabinet departments.

After the left-leaning blog Progressive Pulse reported large salary increases for two 24-year-old DHHS staffers, The Associated Press identified five additional young employees earning more than $50,000.

North Carolina's median income is $46,291, according to U.S. Census data.

Several of these employees are among McCrory's 1,000 exempt. Of the 140 newly exempt employees who have been hired, promoted or given raises since McCrory took office, 95 are paid in the top half of their new ranges.

The salary revelations have become a common talking point for liberal groups, who say general state employees deserve raises before administration hires. According to the legislature's Fiscal Research Division, state employees have seen only one pay increase – of 1.2 percent – in the past five years.

McCrory has said raises for state employees are high on his legislative agenda.

Progress North Carolina, a liberal advocacy group, urged lawmakers last week to investigate the raises and the administration's hiring practices for exempt positions, especially in light of a McCrory decree in March that agencies freeze pay to cover the state's Medicaid shortfall. On Friday, House Democratic leader Rep. Larry Hall did the same.

If this kind of bad press continues, Maynard said, it may force McCrory to answer some tough questions from fellow Republicans in the General Assembly too.

"The thing that may be creating difficulties for governor – this is state money, tax dollars," Maynard said. "As friendly as the legislature is, they're going to want to know how the money they appropriated was spent."

CLARIFICATION: Information on Cris Mulder's position with the Department of Transportation has been updated in this story and the table to reflect new information from the Office of State Human Resources and DOT human resources. The job title, which was created as a "flat-funded" position, is not comparable to the state salary plan's "public relations officer" classification, according to the DOT.

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  • anthonysmith349 Aug 29, 9:08 p.m.

    EasternNCborn. that is the exception and not the rule. I have worked in state government many many years. There are pockets of ethics and reward for a job well done but not in all agencies.

  • SMAPAEA Aug 29, 9:31 a.m.

    There was a report on Channel 9 that these employees were put into jobs without recruitment!!

  • easternNCborn Aug 29, 8:59 a.m.

    "EasternNCborn-it doesn't happen that way. you start out entry level and you stay there. There is very little advancement or career moves upward. --anthonysmith349"

    You're correct in that it doesn't happen that way as much as it should, but I have a spouse who took a state position 2 years out of college and worked their butt off to make a respectable salary. The reward?--to be made an exempt employee who is subject to loose their job because they represent the environment and people of NC rather than a political party. I'm getting tired of the public assuming because my spouse makes a decent salary with the state, it wasn't earned the old-fashioned way and there are many coworkers that worked their way up as well.

  • anthonysmith349 Aug 28, 9:58 p.m.

    EasternNCborn-it doesn't happen that way. you start out entry level and you stay there. There is very little advancement or career moves upward. Most of the better paying positions are filled with "favorites" or "friends" of the hiring manager or the people over them. I have only seen a few real as it should be promotions for deserving individuals over the years. It is said. The whole personnel system needs to be overhauled. But no one listens. As long as everyone sits by, grumbles a little when things come up like this, then quiet down, nothing will ever be done. Maybe if we keep rotating them out. Let serve one term and vote them out. Keep that going and do away with these career politicians.

  • anthonysmith349 Aug 28, 9:53 p.m.

    BubbaDukeforPresident - there are no longevity raises for state employees. These are a very miniscule percentage of one's salary paid out each year based on the number of years worked in 10 yr increments. The only ones who get a lot of money from this are the ones making the big bucks. The lower paid employees usually get about $400 or so dollars then taxes, retirement, SS, are taken out and end up with about 1/2. It is not a permanent raise. It is just a one time bonus each year. If anyone is looking for a career, I would not recommend working for the state government. I use to see my position as a career and enjoyed my work. For the past 4 years, it has been just a job I really don't like any more but have too many years in the system to start over. There are 1000's of employees who feel just like I do. We don't feel appreciated. we never get raises for jobs well done. When we do get a raise, everyone gets the same thing even the seat-warmers and slackers. There is no incentive

  • Steve Mchugelarge Aug 28, 9:53 a.m.

    No one should HAVE to do that since an education is guaranteed by the Federal government of the US.
    Git-a-Rope

    and we all know that anything govt touches turns to gold, right? Cant wait for them and the IRS to run healthcare we'll be in high cotton then wont we?

  • easternNCborn Aug 28, 9:03 a.m.

    BubbaDukeforPresident -- How many times does it have to be pointed out to you?? The definition of exempt and non-exempt in regards to these positions has nothing to do with the IRS standards! Most positions with the state are salary and non-exempt. Many of these are positions in which people started out in entry level positions 25-30 years ago and with hard work and dedication to the citizens of this state, and NOT following party politics, worked their way up into management positions. Please quit repeating the same garbage!! Better yet, do some real research...even read the article that you are commenting on.

  • BubbaDukeforPresident Aug 28, 8:25 a.m.

    This is the same story for three days running. One would think that WRAL has an agenda against this governor. The governor broke no laws, he simply moved over-paid hourly workers to salaried status in accordance with IRS standards.

    What goes on in state government is that the worker-bees tend to stay in their jobs long enough to earn longevity raises that eventually puts them at wages that exceed those in the private sector, as well as exceeding what that position is worth. We don't have job security in the private sector - there shouldn't be any in government either.

  • anthonysmith349 Aug 27, 8:21 p.m.

    Someone from state personnel explain this to me; why within certain state agencies and state operated facilities do personnel directors/human resource personnel say that an applicant selected for hire can't have over a specified percentage of a raise, usually 2%, and someone can't make over the top of the pay range, and a change from one state job to another totally different state job at the same pay grade is considered a lateral transfer and no increase in pay even with experience and education? There are so many double standards in the state personnel system. They do what they want to do. It has happened for years under the dems, and now the reps are following suit. Everyone keeps saying, "That's just government." Why don't us the people say enough and stop this. Contact your State Senators and Representatives. Bombard them with emails, phone calls, letters. It shouldn't be acceptable. People should be hired based on education, experience, and skills and abilities from experience.

  • DontVote4LiarsCheatsOrThieves Aug 27, 8:01 p.m.

    superman - "The dog ate my homework is much more acceptable."

    Yours too?

    Someone has to get the dog that keeps doing that!!!

    LOL

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