Section 5-1    Definitions
Section 5-2    Civil Service Compensation
Section 5-3    Hours of Service
Section 5-4    Compensation Administration
Section 5-5    Conditions of Employment
Section 5-6    Patents - Inventions
Section 5-7    Copyrights

5-1.1 Definitions.  As used in these rules:

(a)	Base salary means the fixed, recurring portion of the employee's compensation.
(b)	Compensation plan means the rules and regulations (including the compilation of schedules, procedures, policies, and practices approved by the civil service commission or the state personnel director) for administration of pay and fringe benefits for the classified service.
(c)	Longevity means a separate pay system that provides for annual payments to employees based upon their total number of years of satisfactory service.
(d)	Lump sum award means a portion of an employee's compensation award under a performance-pay program that is (1) in addition to the employee's base salary, (2) is paid in a single payment, and (3) is not rolled into the employee's base salary.
(e)	Shift differential means a supplementary hourly payment made to employees whose regularly scheduled shifts fall between certain designated hours.
(f)	Maintenance allowance means an amount by which an employee is reimbursed for expenses incurred in conjunction with the employee’s job, such as meals, lodging, and mileage.
(g)	Performance-pay program means a compensation system in which the state personnel director, on request of an appointing authority, adjusts individual compensation on the basis of individual and group performance evaluations, individual competencies, departmental objectives, departmental budget, and other job-related factors. The primary purpose of a performance-pay program is to recognize, reward, and encourage exceptional individual and group performance.
(h)	Red-circled employee means an employee whose approved rate of pay exceeds the maximum salary rate established in the compensation plan for the employee’s class.

5-2.1 Authority.

(a)	General application.  All employees in the classified service shall be compensated and eligible for fringe benefits in accordance with the compensation plan.
(b)	Collective bargaining agreement.  All employees in the classified service shall be covered by these rules, except that employees covered by an approved collective bargaining agreement differing from the compensation plan shall be governed by the collective bargaining agreement, where different.

5-3.1 Work Period.

(a)	Standard work period.  Eighty (80) hours of work shall constitute the biweekly work period for full-time employees in the classified service.
(b)	Alternative work periods.  The state personnel director may issue regulations that establish alternative work periods and measures of equivalent full-time service. The regulations may conform other provisions of the compensation plan to the alternative periods and measures.

5-3.2 Service Hours toward Benefits.  Career employees in the classified service shall earn credit for hours paid in a biweekly work period for the purpose of accruing fringe benefits. Paid service in excess of eighty (80) hours in a biweekly work period shall not be counted. Noncareer employees are excluded and shall not accrue credit hours toward benefits.

5-4.1 Compensation Schedules.  The civil service commission shall approve compensation schedules that establish the rates of compensation for each class of positions in the classified service. All rates of compensation authorized shall be for full-time employment. Payment for part-time service shall be proportionate to the time actually worked. If a new classification is added to the classification plan, the state personnel director shall initially establish the rates of compensation for the class pending review by the commission.

5-4.2 Departmental Salary-range Subdivisions.  An appointing authority, with the prior written approval of the state personnel director, may implement departmental salary-range subdivisions within a class salary range. A salary-range subdivision shall fall within the range of rates of compensation approved by the civil service commission for the class. The salary-range subdivision shall be based on relevant, job-related departmental considerations, including, for example, job complexity, level of responsibility, market conditions, or reporting relationships. The appointing authority shall publish all approved salary-range subdivisions for its affected employees.

5-4.3 Individual Compensation.  The state personnel director, on request of an appointing authority, shall fix the individual level of compensation for each classified employee. The individual level of compensation shall fall within the range of rates of compensation approved by the civil service commission for the employee's class. If the appointing authority implements an approved salary-range subdivision, the individual level of compensation of an employee subject to the subdivision shall also fall within the approved departmental range of rates for the subdivision. Any exception must be approved by the director.

5-4.4 Schedule Amendments.  The civil service commission may amend the compensation schedules from time to time. The state personnel director shall submit to the commission (1) recommended adjustments for nonexclusively represented employees and (2) wage agreements reached between the state employer and exclusive employee representatives.

5-4.5 Operation of Schedules.  An employee in the classified service shall not be paid less than the minimum nor more than the maximum of the salary range fixed by the compensation schedule for the employee’s class, except when authorized by the state personnel director.

(a)	Initial appointment.  On initial appointment, an employee shall be paid the minimum salary step in the salary range. An appointing authority may pay a higher initial salary in accordance with provisions contained in the compensation plan as approved by the director.
(b)	Schedules with steps.  If the compensation plan creates steps in the pay range, pay increases shall be granted to an employee in the amounts and at the intervals provided for in the compensation schedule for the specific class if the employee is in satisfactory standing and otherwise qualifies for the increase. (1) Effective date.  Any pay increase shall become effective at the beginning of the first pay period after the employee becomes eligible. (2) Advancement.  Advancement in pay shall be by successive steps of the pay range for the class, as provided in the compensation plan, unless a special increase is granted in accordance with provisions contained in the compensation plan. (3) Reduction of pay.  An appointing authority may, for cause, reduce the pay of an employee receiving more than the minimum step for the class. (4) General schedule revision.  If the compensation schedule is amended, an employee shall be paid at the salary step corresponding in length of service to the step at which that employee was being paid in the previous salary range for the class.
(c)	Performance-pay programs. (1) Salary range.  For each class of positions in a performance-pay program, the civil service commission shall approve a salary range that includes (1) a minimum point, (2) one or more control points, and (3) a maximum point. (A) Minimum point.  The minimum point shall be the lowest base salary payable to an employee in the class. (B) Control point.  The control point shall be the highest base salary payable to an employee in the class. (C) Maximum point.  The maximum point shall be the maximum total salary, including both base salary and any lump sum awards, payable to an employee in the class during any one fiscal year. (2) Performance-pay awards.  If an employee’s position is included in a performance-pay program, the appointing authority, with the approval of the state personnel director, may award the employee an increase in base pay or a lump sum award, or both, in accord with the provisions of the compensation plan. If the employee's job performance is rated less than satisfactory, the appointing authority may reduce the employee’s base pay in accord with the provisions the compensation plan. The director may set limits on the amount of performance pay that may be awarded in any one fiscal year. (3) Grievances regarding performance-pay programs.  Performance-pay awards are discretionary. An employee is not authorized to appeal a final performance-pay grievance determination unless an appeal is specifically permitted in this rule or the applicable regulations. (A) Grievance and appeal permitted.  An employee aggrieved by any of the following performance-pay actions is authorized to file a grievance and to appeal the final determination of the appointing authority to the department of civil service: (1) The employee receives a performance rating of less than "meets expectations," "fully competent," or other equivalent satisfactory rating. (2) The employee’s pay is reduced. (3) The appointing authority fails to rate the performance of the employee at least once annually. (B) Grievance appeal prohibited.  In all other cases, an appointing authority is permitted, but not required, to authorize an employee aggrieved by a performance-pay action to file a grievance within the department’s grievance procedure. However, unless expressly authorized in subSection(c)(3)(A) or (c)(3)(C), the employee may not appeal a final performance-pay grievance determination of the appointing authority to the department of civil service. By way of example only, the following performance-pay actions cannot be appealed to the department of civil service: (1) The amount of a performance-pay award. (2) The failure to be awarded a performance-pay award. (3) The distribution of a performance-pay award between a base pay adjustment and a lump sum award. (4) A performance evaluation rating at or above "meets expectations," "fully competent," or other equivalent satisfactory rating. (5) The performance evaluation or performance-pay award of another employee. (6) The decision to include a position into, or exclude a position from, a performance-pay program. (7) The performance-pay program itself, including, for example, the performance standards, departmental evaluation methods, rating categories, and departmental salary-range subdivisions. (C) Exception.  Notwithstanding the limitations in subsections (c)(3)(A) and (c)(3)(B), an employee aggrieved by a performance-pay action that violates article 11, §5, of the Michigan Constitution or rule 1-2 is authorized to file a grievance and to appeal the final grievance decision of the appointing authority to the department of civil service.
(d)	Conversion of performance-pay schedule to step schedule.  If a class is converted from a performance-pay schedule to a schedule with steps, an employee whose position is converted shall be placed at a step at least equal to the employee’s base salary under the performance-pay plan at the time of conversion in accord with regulations issued by the state personnel director.
(e)	Salary rate for temporary projects.  Upon request of an appointing authority, the state personnel director may approve alternative or supplemental compensation that may exceed the scheduled maximum rate of pay for an employee assigned to a temporary project. The appointing authority must request the alternative compensation before the employee is assigned to the project.
(f)	Salary rate for red-circled employees.  If an employee is retained in a position allocated to a class having a lower pay range, the employee may be paid the existing salary until the maximum of the new class equals or exceeds the employee’s existing salary rate. An employee whose salary is red-circled is not eligible for any portion of a general wage adjustment that exceeds the maximum of the new class.

5-4.6 Salary Rate Upon Change in Class, Return from Layoff, or Reinstatement.  An employee who moves from one class to another and who returns from layoff or is reinstated after separation shall be paid in the new class at the appropriate salary step in accordance with provisions contained in the compensation plan.

5-4.7 Special Pay Applications.  An appointing authority may require employees to work under special conditions. The compensation plan may authorize or require extra compensation for employees in such circumstances.

(a)	Special Conditions Defined.  Special conditions are those different from normal working conditions, or at times different from the normal workday. Special conditions include, but are not limited to, (1) overtime, (2) on-call time, (3) special shift, (4) call back, (5) hazards, and (6) conditions of general emergency.
(b)	Procedure for Payment.  The compensation plan shall establish eligibility for special pay premiums, the amounts and methods of compensation, and the standards and procedures for payment.
(c)	Exclusions for SES, ECP Group 4, and attorneys.  Employees in the senior executive service, ECP Group 4, and attorneys are not eligible to accrue compensatory time or to receive additional compensation for (1) overtime, (2) on-call time, (3) special shift, or (4) call back. However, if such employees otherwise qualify, they are eligible for hazard premium pay provided in the compensation plan.

5-4.8 Supplemental Pay Provisions.  The civil service commission may establish separate supplemental pay systems for special purposes, such as longevity. Employees shall become eligible and be paid in such systems in accordance with provisions contained in the compensation plan.

5-4.9 Approval and Disapproval of Disbursements for the Classified Payroll.  The state personnel director shall certify each payroll for the classified service. Payroll certification shall be based on computerized payroll system edits of payroll calculations and personnel transactions and the audit of personnel transactions for compliance with civil service rules and regulations. The director shall establish edit requirements and audit procedures. The director may delete from the payroll any item that cannot be certified under the provisions of this rule and shall give notice of such action, together with the reason for the action, to the appointing authority concerned.

5-4.10 Duty-Incurred Disability Payment.  The compensation plan may provide for a supplement to an employee’s workers’ compensation disability benefit if the employee suffered a work incapacitating injury or illness which was duty-incurred or was the result of a job-related assault. Such payment, including use of leave credits, shall be made in accordance with provisions contained in the compensation plan.

5-4.11 Payment at Death of an Employee.  Wages due a deceased employee shall be paid in accordance with a primary and secondary beneficiary designation filed by the employee under regulations issued by the state personnel director. In the absence of a valid beneficiary designation, payment shall be made only in accordance with the instructions of the court.

5-5.1 Compensation from Other State Sources.  A classified employee who concurrently occupies more than one position in the state service shall not be credited with more than eighty (80) hours in pay status for any purpose, except salary. Salary shall be prorated and paid by each department on the basis of time actually in pay status.

5-5.2 Paid Holidays.  Full-time career employees shall be allowed eight (8) hours paid absence from work on approved state holidays. Career employees who regularly provide less than full-time service are entitled to paid holiday absence in proportion to their time actually in pay status.

(a)	Procedure.  Determination of the appropriate date for holiday observance and standards for determining employee eligibility shall be in accordance with provisions contained in the compensation plan.
(b)	Work on a holiday.  An appointing authority may require employees to work on a paid holiday. Such employees shall be compensated in accordance with any applicable provisions governing compensation for overtime and shift differential contained in the compensation plan.

5-5.3 Paid Annual Leave.  Upon entry into the classified service, each career employee shall be credited with an initial annual leave grant of sixteen (16) hours, which shall be immediately available for use, upon approval of the appointing authority. After completion of seven hundred twenty (720) hours of paid service in the initial appointment, the employee shall have annual leave credited in accordance with the annual leave tables in the compensation plan.

(a)	Limitations of initial leave.  The sixteen (16) hours of initial grant of annual leave may not be credited to an employee more than once in a calendar year.
(b)	Crediting and utilization of annual leave.  Employees shall be credited with annual leave in accordance with established annual leave tables and accumulate and use annual leave in accordance with provisions contained in the compensation plan.
(c)	Other limitations.  No annual leave shall be authorized, accumulated, or credited in excess of limits established in the compensation plan.
(d)	Special credit for annual leave and longevity.  Solely for the purpose of annual leave and longevity credit, a career employee shall be allowed state service credit for the following: (1) Any service in a nonelective excepted or exempted position in a principal department, the legislature, or the supreme court, that immediately preceded entry or return to the classified service. (2) Up to five years of honorable service in the armed forces of the United States completed prior to entry into the classified service. When an employee who has received additional annual leave and longevity separates from the classified service and subsequently returns, military service previously credited shall be recognized as prior service, subject to requalification for the benefits of this section.

5-5.4 Sick Leave.  Every career employee in the classified service shall be credited with four (4) hours of sick leave with pay for each completed eighty (80) hours of service. Paid service in excess of eighty (80) hours in a biweekly pay period shall not be counted.

(a)	Crediting and utilization of sick leave.  Crediting and utilization of sick leave, as well as payment at retirement, separation, or death shall be in accordance with provisions contained in the compensation plan.
(b)	Evidence of fitness.  An appointing authority may require that an employee present medical certification of physical or mental fitness to continue working.

5-5.5 Maintenance Allowance.  When allowances are made for maintenance or other purposes, they shall be considered as part of compensation, unless specifically excepted by the civil service commission. Payment of allowance for maintenance, such as meals, lodging, domestic or other personal services, medical care or treatment, laundry, or other services shall be made in accordance with provisions contained in the compensation plan.

5-6.1 Employee Rights.  The property rights of a classified employee in a patent on an invention that the employee created shall be subject to contract entered into by the state administrative board as provided by law. In recognition of meritorious service, the employee’s compensation shall be fifteen (15) percent of the net royalties which may result from the invention. The compensation provisions of this Sectionare non-negotiable; however, any dispute concerning the employee’s property rights relative to the state’s property rights in such an invention is grievable.

5-6.2 Grants and Contracts.  This Sectionshall not preclude the acceptance of grants or contracts under provisions of applicable federal laws or regulations that require a different disposition of patents or right thereof to obtain patents.

5-7.1 Employee Rights.  The property rights of a classified employee in a copyright that subsists in a work created by the employee as an author-employee shall belong to the state and be subject to contract entered into by the state administrative board as provided by law. In recognition of meritorious service, the author-employee’s compensation shall be fifteen (15) percent of the net royalties from written licenses or transfers to third parties by the state of Michigan that may result from a work, but only where a certificate of copyright has been obtained by the state or agency. Any dispute concerning the author-employee’s property rights relative to the state’s property rights in such a copyright is grievable. The percent of royalties as compensation shall not be negotiable in union contracts.

5-7.2 Grants and Contracts.  This rule shall not preclude the acceptance of grants or contracts under provisions of applicable federal laws or regulations that require a different disposition of the copyright in works.