Babson College
PA-11: Employee Compensation

Part 1

More than 75 percent of the institution’s employees receive a living wage (benefits excluded).

Include all regular full-time, regular part-time, and temporary (or non-regular) employees (staff and faculty). Institutions may choose to include or omit student workers.

Part 2

Institution is able to verify that more than 75 percent of the employees of contractors that work on-site as part of regular and ongoing campus operations receive a living wage (benefits excluded).

Part 2 is only applicable to institutions that have one or more significant on-site contractors, which may include (but are not limited to) regular providers of dining/catering, cleaning/janitorial, maintenance, groundskeeping, transportation, and retail services (e.g. book and supply stores).

Part 3

Total compensation provided to the institution’s lowest paid regular (i.e. permanent) employee or pay grade meets or exceeds the local living wage.

Include regular part-time and full-time workers. Newly hired, entry-level employees may be excluded from Part 3 during the first six months of employment. Institutions may choose to include or omit student workers.

To determine the local living wage::

• U.S. institutions must use the Living Wage Calculator hosted by the Massachusetts Institute of Technology to look up the living wage for “2 [working] Adults, 2 Children” for the community in which the main campus is located.
• Canadian institutions must use Living Wage Canada’s standards (if a living wage has been calculated for the community in which the main campus is located) or else the appropriate after tax Low Income Cut-Off (LICO) for a family of four (expressed as an hourly wage),
• Institutions located outside the U.S. and Canada must use local equivalents of the above standards if available or else the local poverty indicator for a family of four (expressed as an hourly wage).

For further guidance, see F. Measurement.

This credit applies to all institutions. 

Each part is scored independently. The number of points available for each part of this credit varies based on whether or not the institution has employees of contractors that work on-site as part of regular and ongoing campus operations, as follows:

Part 1

An institution earns the maximum points available for Part 1 of this credit when 100 percent of its employees receive a living wage. Incremental points are available based on the percentage of all employees that receive a living wage (between 75 and 100 percent). For example, an institution that provides 87.5 percent of all employees with a living wage would earn half of the points available for Part 1.

Points earned for Part 1 are calculated according to the formula below. Please note that users do not have to calculate the number of points earned themselves; points earned will be calculated automatically when the data listed under E. Reporting Fields is entered in the online Reporting Tool. 

Points Earned = A × [ (B – 75) / 25 ]

A = Points available for Part 1 (1 or 0.75; see above)

B = Percentage of all employees that earn a living wage (0-100)

Part 2

An institution that has significant contractors on-site as part of regular and ongoing campus operations earns the maximum of 0.75 points available for Part 2 of this credit when it is able to verify that 100 percent of the employees of those contractors receive a living wage. Incremental points are available based on the percentage of employees of contractors that receive a living wage (between 75 and 100 percent). For example, an institution for which 87.5 percent of employees of contractors are provided with a living wage would earn 0.375 points (half of the points available for Part 2).

Points earned for Part 2 are calculated according to the formula below. Please note that users do not have to calculate the number of points earned themselves; points earned will be calculated automatically when the data listed under E. Reporting Fields is entered in the online Reporting Tool.

Points Earned = 0.75 × [ (A – 75) / 25 ]

A = Percentage of employees of contractors that work on-site as part of regular and ongoing campus operations that receive a living wage (0-100)

Part 3

An institution earns the maximum of 1.5 points available for Part 3 of this credit when the total compensation provided to its lowest paid regular employee or pay grade meets or exceeds 200 percent of the living wage.. Partial points are available as follows:

Timeframe

Report on current compensation status and offerings, for example at a single representative point during the performance year that aligns with other institutional commitments. When using a representative point, institutions should strive to ensure that it recognizes seasonal and other variations that influence employment. 

Sampling and Data Standards

Institutions unable to confirm that a contractor meets the criteria for this credit should include the contractor’s employees in the count of employees working on campus and exclude the contractor’s employees from the count of employees that are covered by sustainable compensation standards or collective bargaining agreements and the count of employees that receive sustainable compensation. 

Institutions may use their own established definitions of each job type referenced.