MERIT SALARY INCREASES; ONE-TIME MERIT PAYMENTS.

(a) In this section:

(1) "Classified employee" means a state employee who holds a classified position.

(2) "Classified position" means a position classified under the state's position classification plan.

(3) "Merit salary increase" means an increase in compensation to:

(A) a higher step rate in the same classified salary group, if the classified employee is compensated under Salary Schedule A of the General Appropriations Act; or

(B) a higher rate within the range of the same classified salary group, if the classified employee is compensated under Salary Schedule B of the General Appropriations Act.

(b) The comptroller shall prescribe accounting and reporting procedures as necessary to ensure the availability of information reflecting each state agency's use of merit salary increases, including one-time merit payments.

(c) Each state agency shall establish:

(1) a procedure for determining the eligibility of a classified employee to receive a merit salary increase or a one-time merit payment from the agency; and

(2) requirements for substantiating the eligibility of a classified employee who receives a merit salary increase or a one-time merit payment from the agency.

(d) Merit salary increases and one-time merit payments shall be applied throughout the range of classified salary groups used by each state agency.

(e) A state agency may award a merit salary increase to a classified employee in relation to the employee's performance in the current classified position held by the employee if:

(1) the employee has been employed by the agency in that position for at least six continuous months before the effective date of the increase;

(2) the effective date of the increase is at least six months after the effective date of the employee's last:

(A) promotion; or

(B) merit salary increase for performance in that position;

(3) the agency has complied with Subsection (c);

(4) the employee's job performance and productivity in that position are consistently above that normally expected or required; and

(5) the effective date of the increase is at least six months after the effective date of the agency's last:

(A) payment to the employee of an enhanced compensation award authorized by the General Appropriations Act; or

(B) one-time merit payment for performance in that position.

(f) A state agency may make a one-time merit payment to a classified employee in relation to the employee's performance in the current classified position held by the employee if:

(1) the employee has been employed by the agency in that position for at least six continuous months before the effective date of the payment;

(2) the effective date of the payment is at least six months after the effective date of the employee's last:

(A) promotion; or

(B) merit salary increase for performance in that position;

(3) the agency has complied with Subsection (c);

(4) the employee's job performance and productivity in that position are consistently above that normally expected or required; and

(5) the effective date of the payment is at least six months after the effective date of the agency's last:

(A) payment to the employee of an enhanced compensation award authorized by the General Appropriations Act; or

(B) one-time merit payment for performance in that position.

(g) The six-month limitations prescribed by Subsections (f)(2) and (5) do not apply if the administrative head of the agency determines in writing that the merit payment is made in relation to the employee's performance during a natural disaster or other extraordinary circumstance.