In an effort to retain and recruit talented employees, the Town of Chapel Hill unanimously approved a new Pay Plan to address salary differences between new hires and existing employees. 

During the Chapel Hill Town Council’s meeting on January 26, elected officials voted on a $500,000 appropriation to bring all employees to recommended minimums and provide pay increases to all regular employees.

The vote was based on recommendations from a Class and Compensation Study, which originally began in 2019 under the Management Advisory Group, Inc. but was delayed due to COVID-19.

This is an effort to address Chapel Hill’s wage compression issues, where new hires are paid more than employees who have held a position for a longer period of time. 

According to Town Manager Maurice Jones, after Chapel Hill recognized their pay raises and overall compensation had fallen behind their peers in Raleigh and Durham, they were determined to closely examine the marketplace.

In Phase One of the Pay Plan, 277 employees will be classified within a new minimum salary category. Phase Two of the plan recommends additional pay increases to all employees. 

For employees who have served more than five years, the Town recommends a three percent midpoint increase or an increase to the new minimum. Those with less than five years of service will be guaranteed a two percent midpoint increase or an increase to the new minimum. 

“I fully and wholeheartedly support raising the salaries of our staff, not only to keep us competitive but also to recognize all their hard work and their professionalism,” Chapel Hill Town Council Member Amy Ryan said. 

Based on the results of the study, the Town will establish new pay grades for employees. 

The overall cost of Phase One is estimated to be slightly under $100,000 for 2022, which will be paid for through an estimated ten percent increase in the Town’s sales tax.

“Our essential employees who have worked so hard during the pandemic and who have been really embarrassingly underpaid for a long time — I have no problem with paying them this,” Mayor pro tem Karen Stegman said. “I really think that’s essential.”

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