The 2022 North Carolina State Budget provided an opportunity for UNC System campuses to implement Labor Market Adjustment Reserve (LMAR) increases for SHRA and EHRA Non-Faculty employees and discretionary, one-time bonuses for EHRA employees based on the 2021-2022 performance cycle. On November 7, UNC Human Resources released a memo outlining the implementation instructions for both LMAR and one-time bonus provisions.
In response to the HR memo, the Office of Sponsored Programs (OSP) is providing guidance on how the increases and bonuses should be treated on sponsored programs.
LMAR Increases
Salary adjustments implemented as LMAR provide an increase to an individual’s institutional base salary and are considered allowable and can be allocated to sponsored projects.
One-Time Bonuses
One-time incentive bonuses are not part of an individual’s base salary compensation and cannot be charged to governmental funding sources. Therefore, these one-time EHRA ARP bonus payments are considered unallowable on Federal (prime and flow-through) and State of North Carolina awards.
One-time merit bonuses issued in 2016 were treated in a similar manner and also determined to be unallowable on Federal and State of NC awards. Learn more in the Office of the Vice Chancellor for Research memo.
Things to Consider
One-time EHRA bonus payments will be processed in December 2022 payroll. If the bonus payment is distributed to Federal and State of NC awards, departments will be required to move the expenses to non-sponsored project sources.
The proportional amount of the bonus payments charged to non-governmental awards based on the individual’s December 2022 payroll funding (fund swap) sources are considered allowable and can remain allocated to those non-governmental projects.
Please contact SponsoredPrograms@unc.edu if you have any questions regarding this announcement.