The University officially increased its employee minimum wage to $15 per hour Wednesday, affecting roughly 96 percent of the University’s workforce and marking the largest salary raise in University history. The new living wage plan, announced last March and updated in October, covers 1,323 full-time employees eligible for benefits as well as more than 800 full-time contracted employees.
With the rise to a $15 per hour minimum wage, the University estimates that employees previously earning $12.75 will see an increased annual gross pay by more than $4,500. It will cost the University around $3.5 million this year to implement, including the cost of fringe benefits and compression adjustments for the 762 workers who currently earn between $15 and $16.25 an hour, according to deputy University spokesperson Wes Hester.
As the largest employer in Charlottesville with nearly 17,500 full-time, benefits-eligible employees, the University last raised its minimum wage from $12.38 to $12.75 per hour in 2018 after calls from students, community members and employees. This increase did not apply to outside contractors that employ individuals who work at the University, such as Aramark — the provider for University dining services, which paid employees $10.65 — citing legal barriers to raising their wages. The state and federal minimum wage is $7.25.
In October, University president Jim Ryan announced that the University has partnered with its major contractors to raise the wages of their full-time employees to at least $15 an hour. According to the University’s Human Resources department, 259 full-time employees of Aramark are benefitting from the base wage adjustment. Aramark has also increased its minimum hourly wage to $13 per hour for 208 part-time employees, starting Wednesday.
Other contracted companies in the Academic Division whose full-time employees are receiving benefits from the base wage adjustment are mail service provider Exela Technologies, child care provider KinderCare Education and custodial service provider BMS.
In the University health system, 144 full-time and 14 part-time employees of food and nutrition service provider Morrison will benefit from the base wage adjustment, as well as 316 full-time and 10 part-time employees of environmental service provider Crothall, 41 full-time employees of valet service provider Towne Park and seven employees of child care center Bright Horizons.
While nearly 90 percent of the University’s full-time contracted employees who work on Grounds regularly will be covered by this plan, contracted workers whose employers only provide episodic services to the University will not experience an increase in wages.
In March, the University’s community working group identified jobs and wages as the most important issue facing the Charlottesville and University communities based on a survey that received over 3,000 responses.
According to MIT’s living wage calculator — which estimates the living wage needed to support individuals and families based on the cost of basic necessities — a living wage in Charlottesville stands at $12.49 for a single adult or $17.16 for a family of four in which both parents work.
Hester said the University plans to conduct a compensation review at the end of every year to reevaluate base wages and consider indexing the wage to inflation.
“U.Va.’s base wage will be reviewed as a part of that cycle, including considerations for cost of living and socio-economic factors,” Hester said. “Any changes to the base wage will be made based on this annual review.”
Affected employees were notified of increased wages by email the week of Dec. 9. Employees in the Medical Center and the University’s Physicians Group will see the increase in their Jan. 17 paycheck, and those in the Academic Division will see the increase in their Jan. 24 paycheck.