Questions have recently emerged as to whether stipends/market pay adjustments should be added to redline rates. Specifically, if an employee is redlined in a classification for which there is a stipend would the stipend be added on top of the redline rate?

The answer is no -- the redlined rate should not be added to the stipend/market pay adjustment associated with the new [lower] classification.  This determination is based upon two significant considerations:

(1.) In 2001 BHR and BER collectively addressed this issue with respect to whether a “redlined” Forester II would receive the market salary adjustment.  At that time, it was determined that because the market adjustments are intended to make salaries for the adjusted classifications more competitive with other markets and a redlined employee is already making more money than the adjusted rate, the employee should not receive the market adjustment on top of the redline amount. 

(2.) The 1984 arbitration that gave rise to the “redline” concept is specific on this point.  [Case No. 1139-0028-84]  In discussing the “Award” the arbitrator (Philip Dunn) was clear and unambiguous: “If the reconstruction calls for a reduction in present salary, the employee shall be “red-circled,” [now known as “redlined”] and shall therefore continue to receive his or her present salary.” (Emphasis added.)  Hence, the employee’s “present salary” should be continued until the rate of pay in the lower classification (including the stipend) catches up. 

Since the Dunn decision mandates that the “present salary” must be continued if an employee is redlined due to reclassification, when an employee is reclassified downward from a classification with a stipend/market pay adjustment to lower classification, the stipend/market pay adjustment must be continued in the redline amount, whether or not the lower classification has a stipend/market pay adjustment.

Similarly, when an employee is reclassified from a higher classification without a stipend/market pay adjustment to a lower classification with a stipend/market pay adjustment, the stipend/market pay adjustment in the lower classification must be considered in determining if the employee should be redlined.  This is accomplished by calculating the appropriate demotion rate and adding the stipend/market pay adjustment.  If the salary schedule rate + stipend/market pay adjustment in the lower class is greater than the salary in the classification from which the employee was reclassified (that did not have a stipend) the employee is not redlined because the employee’s “present salary” (in the lower class) is greater than his or her salary in the higher classification.¹

PJS081806
JTC062013

¹ This situation most likely would occur when the salary ranges of the two classifications are fairly close together or when the salary schedules are not comparable (e.g. schedule 01 or 04 vs. schedule 09 or 47).