Compensation

Retention payment

A retention payment (sometimes called a “stay bonus” or “retention incentive”) is a lump sum payment outside of an employee’s base pay that is offered as an incentive to convince a key employee to remain in their current position for a specific amount of time to meet critical and priority business needs. It is offered to an individual performing critical work where interruption through turnover could be costly. Retention payments are not intended to be offered to an entire group of employees in a job profile.

Eligibility

A retention payment is available to current, regular staff who are in positions identified by the unit’s administrative official as being difficult to fill. A position that is difficult to fill is one that has taken a very long time to fill or for which qualified candidates could not be found despite extensive recruiting efforts due to factors such as labor market shortages, aggressive growth in compensation levels for particular positions, or unique skillsets.

Employees will not be eligible for a retention payment if they have received:

  • A recruitment or relocation incentive within the last 12 months; or
  • A retention incentive within the biennium.

Recipients must have been in their current position for 12 months to be eligible and must agree to work in the same position that paid the retention payment for at least 12 months after the date the retention payment is paid. Retention payments made for professional staff who have received an in-grade or position review resulting in a pay increase within the last 6 months must be reviewed by the UWHR Compensation office.

Employees in temporary positions such as temporary hourly staff, per diem nurse, professional staff temporary project position or hourly limited term position, or fixed duration appointments are not eligible.

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Payment and amount

A retention incentive is paid as a lump sum up to a maximum of 10% of the employee’s full-time annualized salary unless an exception is approved by the vice president for Human Resources. Under no circumstances may a payment exceed 15% for classified non-union employees, as specified by WAC 357-28-095.

Retention incentive payments must be made from the organization’s existing resources and amounts should be based on degree of difficulty to fill, labor shortages, substantial or rapid growth in compensation levels for particular positions, uniqueness of skills, or labor market variables.

If your unit has a need to retain an employee but has demonstrably insufficient fiscal resources within any fund type to accommodate the action(s), a request for Provost Reinvestment Funds can be submitted for consideration if the request meets funding thresholds. Please accompany your request with an email to budget@uw.edu if the need is urgent.

This additional pay does not count as wages toward the calculation of the employee’s retirement benefit.

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Employee responsibilities and repayment

Retention incentive payments may be paid to eligible employees after they sign the Retention Payment Repayment Attestation - Campus (PDF) form, which includes repayment conditions. Employees who terminate or change jobs out of the position/department before 12 months of continuous service are required to pay back the full amount of the retention payment. Units may exercise discretion regarding repayment obligations if an employee’s FTE changes. Employees shall not be required to repay the retention incentive payment if they:

  • Are involuntarily separated as part of a reduction in force.
  • Are promoted or laterally move to a new position within the same employing department.
  • Leave UW employment due to receipt of military orders for themselves or their spouse.
  • Have an injury or illness that prevents them from working resulting in a medical separation.

Federal law requires that employees pay payroll taxes on lump sum retention payments. UW reports these payments on the W-2 form. Employees may wish to seek advice from a tax professional.

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Department responsibilities

Managers who want to make a retention payment must complete the retention payment authorization and repayment attestation form and receive approval from their unit’s administrative official who has delegated authority to approve such a payment such as an appointing authority, dean, vice president, or medical center CEO or their delegate. Additionally, before utilizing these step increases for contract classified staff, consult the applicable collective bargaining agreement provisions on compensation, recruitment, and retention. All retention incentive requests for contract covered staff will route to the Labor Relations Office Partner to notify the employee’s union.

Departments are responsible for ensuring compliance with retention incentive payment requirements including:

  • Reviewing the request for pay equity
  • Collecting department and employee approvals on the Retention Payment Repayment Attestation - Campus (PDF)  form, which includes repayment conditions.
  • Coordinating the one-time payment in Workday.
  • Monitoring the employee’s completion of the payment terms requiring 12 months of continuous service.
  • Collecting the full amount of the incentive payment should an employee trigger repayment obligations outlined above.

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