Pennsylvania State University
PA-9: Employee Compensation

In 2008, Penn State used a consulting firm to do research and create the pay band structure. All pointers that address the ability of employees to meet the basic needs such as poverty guidelines, local cost of living indicators, and labor market assessments were taken into account in the design of our pay structure. The objective was to ensure that we provide a living wage to our employees while at the same time maintain a competitive position within the market. The local union negotiates wages for the University's technical service employees working for the physical plant. Annually, these bands are adjusted for cost of living increases.

Penn State used a consulting firm to do research and create the pay band structure. All pointers that address the ability of employees to meet the basic needs such as poverty guidelines, local cost of living indicators, and labor market assessments were taken into account in the design of our pay structure. The objective was to ensure that we provide a living wage to our employees commensurate with skills, experience and knowledge, while at the same time maintain a competitive position within the market. Annually, these bands are adjusted for cost of living increases.

All FT employees and all those working 24 hours per week or more are paid more than the minimum wage. The lowest paid FT employee at Penn State is paid $9.93 per hour ($20,664 per year) plus retirement, medical and educational benefits. The health benefits premiums are scaled to wages, so in essence, the higher paid employees subsidize the lower paid ones.

Part-time employees are paid the same hourly wage as their full-time counterparts in the same job, but adjusted for the number of hours. Once they have worked 750 hours over two sequential years, they receive medical and retirement benefits and paid time-off and holidays. The health benefits premiums are scaled to wages. Higher paid employees pay more than lower paid ones.

The lowest paid, temporary staff are paid Pennsylvania's minimum wage which is $7.25 per hour. However, it is unclear how many people receive the minimum because it depends on the job. Out of almost 21,000 employees, only 2,251 are in the non-student, temporary category and many of them are paid $9 to $10 per hour, well above the $7.25 minimum wage.

The pay for adjunct and non-regular faculty is the same as part-time employees described above, except that they do not quality for paid time off.

Penn State employes over 5,000 students in various sectors of the University, from sports referees and desk monitors, to library proctors, camp assistants, dining hall cashiers, and RAs. Although some are paid the Pennsylvania minimum wage ($7.25/hr) many of them are paid $8 to $11, depending on their experience and skill level. See notes below for graduate student assistantships.

Due to lack of data on compensation paid by on-campus contractors, we made the conservative assumption that they do not pay sustainable compensation. (Only about 50 employees are paid by on-campus contractors.) Graduate students who receive financial assistance are paid by their College. The Graduate School emphasizes to all colleges that an institutional goal is to appoint GAs at no less than a grade 12, and preferably a grade 13 ($18,225 for Fall/Spring for 2013/14). This is formalized in the Strategic Plan for the Graduate School (draft submitted to the Provost), and colleges are asked to work towards their programs meeting this target. For Centre County, PA, the location of the University Park campus, which is where the majority of Ph.D. students (who hold the majority of assistantships) are enrolled, a living wage is calculated at $18,469 in 2014 (http://livingwage.mit.edu/counties/42027). For academic year 2013/14, the numerical average stipend amount of all ½-time fall/spring assistantships (93% of all the assistantships are ½-time) was $18,488, and most GAs receive some form of summer support on top of this, so we are on average providing more than a living wage in terms of the stipend plus summer support. In addition to the stipend, every assistantship includes full graduate tuition, a university contribution to the GA’s health insurance premium (for individual GAs, the University pays 80% of the premium; for a spouse/partner, the University pays 75% of the premium; and for children the University pays 76% of the premium), and for students appointed to a fall/spring GA, qualifies the student for up to 9 credits of summer tuition at no cost to the graduate student in the subsequent summer. In addition to the stipend, the value of these other forms of compensation total approximately $54,116 for GAs who are PA-residents, and approximately $71,937 for GAs who are non-PA residents.