Council agrees to raise part‑time pay‑for‑performance steps from 3% to 5% after review of DMLW options

The Durham City Council reviewed a staff analysis of the part‑time pay plan and the city’s obligations under the Durham Minimum Livable Wage (DMLW) at its June 5 work session and directed staff to change the part‑time pay‑for‑performance step increment from 3% to 5% while asking for additional, longer-term analysis.

What staff presented: Human Resources and Budget staff presented counts and scenarios for “noncommensurate” part‑time positions (jobs that have no full‑time equivalent classification). As of a May 30 census used for the presentation, staff reported 267 noncommensurate part‑time positions; about 159 of those were currently paid below the then‑current DMLW of $19.58. Staff added that a proposed DMLW increase to $21.90 (an upcoming index change) would leave approximately 234 noncommensurate employees below the new threshold if no other changes were made.

Scenarios and costs presented: Staff illustrated tradeoffs among three representative approaches: - Move affected individual employees to the new DMLW (a “step‑to‑floor” approach). Staff estimated that approach would cost roughly $550,000 in FY26 and about $800,000 in FY27 (cumulative about $1.35M) but would compress many part‑time steps and flatten pay differences within part‑time grades. - Raise the underlying part‑time pay structure so every step increases proportionally (a “structure move”). Staff estimated that approach would cost about $1.8M in FY26 and another $1.0M in FY27 (cumulative roughly $2.8M) and would avoid the part‑time compression but could create bypassing issues (part‑time pay exceeding some full‑time equivalents) and require large full‑time pay adjustments to preserve internal equity. - A middle option that lifts some grades and softens compression but does not guarantee DMLW for all in FY26; staff showed this still left a substantial number of employees below the DMLW and would produce intermediate costs.

Equity and operational tensions: Staff warned that some approaches would create “compression” — weakening pay differentials between entry roles and jobs with higher skills and responsibilities — and could cause bypassing where part‑time pay at a given level exceeds a related full‑time classification, undermining equity. Staff also noted demographic context: many part‑time jobs were not solely occupied by teenagers; a significant share of workers were adults who rely on the income. The presentation highlighted benefit‑cliff issues (raising hourly pay can affect employees’ eligibility for other income‑tested supports), which councilors asked staff to examine further.

Council decision: After discussion councilors signaled support for one near‑term, low‑cost change: increase the part‑time pay‑for‑performance step spread from 3% to 5% (applies across the part‑time pay plan’s step structure). Staff estimated that change would cost roughly $270,000 in the current budget cycle. Councilors asked staff to return with a longer‑term plan that explores phased approaches, restructuring where appropriate (for example creating more full‑time professional entry positions in places where that makes sense), analysis of benefits‑cliff effects and options that could substantially close the gap to DMLW in subsequent years.

Why it matters: Council framed the issue as one that balances (1) making progress toward living‑wage goals for lower‑paid workers; (2) preserving pay differentials and career ladders; and (3) the affordability of pay changes for the city budget. Councilors repeatedly asked staff to return with more refined, multi‑year options and to consider ways to convert some part‑time ladders to career‑track positions where appropriate.

Practical next steps: Staff will implement the 3%→5% step change as directed, estimate the FY26 budget impact for the finalized budget and bring back a multi-year plan examining phased options, benefit‑cliff effects and any classification changes recommended as part of a broader compensation strategy.