Montana State University
PA-12: Employee Compensation

Part 1. Living wage for employees

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

Include all employees (full-time, part-time, and temporary/adjunct) in Part 1. An institution may choose to include or omit student workers, who are covered in the Student Living Wage credit in Exemplary Practice.

Part 2. Living wage for employees of contractors

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

Include all regular (i.e., permanent), part-time and full-time workers employed by significant contractors in Part 2. Examples include, but are not limited to, employees of regular providers of dining/catering, cleaning/janitorial, maintenance, groundskeeping, professional, transportation, and retail services. Construction workers and other employees of contractors that work on-site on a temporary or irregular basis may be excluded, as may student workers employed by contractors.

An institution without wage data for its contractors may report the percentage of employees of contractors covered by collective bargaining agreements (i.e., union contracts) in lieu of the above.

Part 3. Minimum total compensation for employees

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

Provisional compensation for newly hired, entry-level employees (e.g., compensation provided during the first six months of employment) may be excluded from Part 3. An institution may choose to include or omit student workers.

Determining the local living wage

To determine the local living wage:

• A U.S. institution must use the Living Wage Calculator hosted by the Massachusetts Institute of Technology to look up the living wage for “2 Adults, 2 Children” (which assumes both adults are working) for the community in which the main campus is located.

• A Canadian institution 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),

• An institution located outside the U.S. and Canada must use a local equivalent of the above standards if available or else the local poverty indicator for a family of four (expressed as an hourly wage).

Please note that a family of four is used to help harmonize the living wage standards and poverty indicators used in different countries and is not assumed to be the most common or representative family size in any particular context. For further guidance in determining the local living wage, see 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 significant contractors with employees 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 Reporting Fields is entered in the online Reporting Tool.

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

A = Points available for Part 1 (1.5 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 with employees that work 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 (or are covered by collective bargaining agreements). Incremental points are available based on the percentage of employees of contractors that meet the criteria (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 Reporting Fields is entered in the online Reporting Tool.

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

A = Percentage of employees of on-site contractors known to receive a living wage or be covered by collective bargaining agreements (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 150 percent of the living wage. Partial points are available as follows:

Timeframe

Report on current compensation status and offerings from within the three years prior to the anticipated date of submission, 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

For this credit, employee wages and salaries must be converted into hourly figures. Hourly compensation for adjunct academic staff and other employees working on a contract basis must include all hours that are necessary to perform the employee’s duties, such as class preparation and grading time. Consistent with U.S. Internal Revenue Service guidelines, adjunct academic staff should be credited a minimum of 2.25 hours of service per week for each hour of teaching or classroom time in that week. Otherwise, an institution may convert salary data to hourly figures based on the standard work week and year used for waged workers.

An institution with satellite campuses should use the main campus location to determine the local living wage, if available, or else a state/provincial/regional living wage.

A institution located outside the U.S. and Canada should use a living wage calculator or standard that is appropriate for the institution’s locality. This might be a public ordinance, a standard adopted by a campaign or NGO (e.g., Living Wage Ireland or the UK Living Wage Foundation), or a standard that has been created using a methodology consistent with that adopted by the Global Living Wage Coalition.

 In the absence of an appropriate calculator or existing standard, an institution may define the local living wage as the local poverty indicator for a family of four (expressed as an hourly wage).

If wage data is not available for employees of contractors, an institution may report on collective bargaining status (as outlined in the Criteria) or estimate conservatively by assuming that workers receive the local, legal minimum wage.