OCEAN CITY — Municipal employees can expect to see a little more in their paychecks after resort officials this week approved an across-the-board pay hike spread over all positions and all grades.
Last year, the Ocean City Mayor and Council contracted with consultant Evergreen Solutions to conduct a pay study for town employees amid struggles with recruiting and retaining full- and part-time seasonal employees in all departments.
All town employees from department heads to rank-and-file season part-time employees are graded in a graduated pay scale based on experience and years of service, for example. The state mandated an increase in the minimum wage to $15 per hour by 2025 but faced with employee shortages for a variety of reasons including increased competition from neighboring jurisdictions, resort officials last year decided to expedite that minimum wage increase and move it up on the town’s timetable to January 2022.
Nonetheless, the town still faced employee shortages in most departments, which necessitated the need for an updated pay study. The town’s last pay study was conducted seven years ago in 2015. On Tuesday, Human Resources Director Katie Callan and Budget Director Jennie Knapp presented the results of the consultant’s study and recommended a pay increase for all town employees across the board.
“We reached out to all of the department heads to submit positions for including in the compensation study,” said Callan. “They included positions that have been difficult to fill or had high turnover rates. We didn’t just stick to government. We also included some private sector.
Callan said the pay study included comparisons with the city of Salisbury, the city of Frederick, Wicomico County and Worcester County. It also included from the private sector Salisbury University and Perdue, for example.
“The consultant compared our positions with the peer organizations to review pay schedules and ranges of pay,” she said. “A total of 17 positions were recommended for a grade change, and 64 employees were impacted. It’s spread around many departments.”
Callan said overall, Evergreen recommended pay increases for all full-time and part-time employees, including police and fire command staff. The average pay increase is around 6%, and the average annual amount of increase is nearly $3,900. The recommended new pay table implementation would cost around $116,000, while the 2% increase across the board would cost the town another $534,000, for a total cost of about $667,000.
The half-year cost would be around $334,000. In addition to the consultant’s recommendations, the staff added a handful of other recommendations for part-time seasonal employees who accrue a designated number of hours of service. The total cost of the staff recommendations would be around $81,000 annually, or a half-year cost of $40,500.
The grand total for the consultant’s recommendations combined with the staff’s other recommendations comes in at around $748,000 annually. The fiscal year 2023 budget included $1 million to cover the cost of the pay study and any recommendations that might come out of it, so even with the across-the-board pay increases for all town staff, the total estimated cost came in under what was budgeted.
“One more important decision you have to make is applying a midpoint calculation on January 1 using the new pay table,” said Callan. “The recommendation is to apply an additional 2% increase on top of the midpoint calculation to acknowledge record inflation that reached 9% in July.”
Callan said the recommended pay table adjustments would address a well-known problem with recruiting and retaining seasonal part-time employees, a problem that has affected just about every department in recent years for a variety of reasons.
“This will address pay equity and acknowledge difficulty with recruitment and retention of part-time seasonal staff,” she said. “Anyone that worked at least 400 hours between Memorial Day and Labor Day would be eligible for the increase. About 350 employees would be eligible. It also includes eligibility for a step increase for year-round part-time employees. Anyone who reaches 1,500 hours worked would be eligible for the 2% ongoing increase in pay.”
Council President Matt James asked if part-time police and fire staff were included in the study. He said he would like to see a snapshot of the pay grades for part-time police and fire staffers compared to what other jurisdictions are paying.
“If they weren’t included in the study, I would like to see, and it could be more informal than this, an idea of what the pay is for part-time police and fire,” he said. “I know our collective bargaining units handle this, but I think the council would like to see where that stands compared to the competition.”
City Manager Terry McGean said the consultant’s recommendations combined with the staff recommendations left no stone unturned in terms of the across-the-board pay hike.
“One of the things I wanted to make clear is this applies to everybody including those on the lower end of the pay grade,” he said. “I think we’ve done that with this. I wanted to address the part-time employees because there are a lot of benefits to having people coming back. This is affordable and it’s important to all of us.”
The council voted 6-0 with Councilman Peter Buas absent to approve the consultant’s pay increase recommendations and those added by the staff.
