Newly exempt employees already pull in top salaries

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.

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.

Salaries for state employees are relatively prescribed.

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."

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.

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."

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

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.

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."