Compensation - Retention Payment

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Compensation

1. Compensation
2. Retention payment

Retention payment

Table of Contents

Eligibility

Payment and amount

Employee responsibilities and repayment

Project-based retention incentives for professional staff

Department responsibilities

Last updated: February 23, 2026

A retention payment (sometimes called a “stay bonus” or “retention incentive”) is a lump sum payment outside of an employee’s base pay that is offered as an incentive to convince a key employee to remain in their current position for a specific amount of time to meet critical and priority business needs. It is offered to an individual performing critical work where interruption through turnover could be costly. Retention payments are not intended to be offered to an entire group of employees in a job profile.

Eligibility

A retention payment is available to current, regular staff who are in positions identified by the unit’s administrative official as being difficult to fill. A position that is difficult to fill is one that has taken a very long time to fill, or for which qualified candidates could not be found despite extensive recruiting efforts due to factors such as labor market shortages, aggressive growth in compensation levels for particular positions or unique skillsets.

Unless their CBA says otherwise, employees will not be eligible for a retention payment if they have received a retention incentive within the previous 24 months.

Recipients must have been in their current position for 12 months to be eligible and must agree to work in the same position that paid the retention payment the duration of the continuous service obligation. Retention payments made for professional staff grades 13-14 or any professional staff  who have received an in-grade or position review resulting in a pay increase within the last 6 months must be reviewed by the UWHR Compensation office.

Employees in temporary positions such as nonpermanent staff, per diem nurse, professional staff temporary project position, or fixed duration appointments are not eligible.

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Payment and amount

A retention incentive is paid as a lump sum up to a maximum of 10% of the employee’s full-time annualized salary unless an exception is approved by the vice president for Human Resources. Under no circumstances may a payment exceed 15% for classified non-union employees, as specified by WAC 357-28-095.

Retention incentive payments must be made from the organization’s existing resources and amounts should be based on degree of difficulty to fill, labor shortages, substantial or rapid growth in compensation levels for particular positions, uniqueness of skills, or labor market variables.

If your unit has a need to retain an employee but has demonstrably insufficient fiscal resources within any fund type to accommodate the action(s), a request for Provost Reinvestment Funds can be submitted for consideration if the request meets funding thresholds. Please accompany your request with an email to [email protected] if the need is urgent.

This additional pay does not count as wages toward the calculation of the employee’s retirement benefit.

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Employee responsibilities and repayment

Retention incentive payments may be paid to eligible employees after they sign the Retention Incentive Payment Repayment Attestation (PDF), which includes repayment conditions. With the exception of project-based retention incentives for professional staff, employees who voluntarily terminate, change jobs, positions or departments, or engage in behavior that makes termination necessary before the continuous service obligations are met are required to pay back the full amount of the retention payment. Unless a CBA says otherwise, the continuous service obligation for campus is 12 months and for UW Medicine Health Systems, the continuous service obligation is 24 months. Units may exercise discretion regarding repayment obligations if an employee’s FTE changes.

Exceptions: Employees shall not be required to repay the retention incentive payment if they:

• Are involuntarily separated as part of a reduction in force.
• Are promoted or laterally move to a new position within the same employing department.
• Leave UW employment due to receipt of military orders for themselves or their spouse.
• Have an injury or illness that prevents them from working resulting in a medical separation.

Federal law requires that employees pay payroll taxes on lump sum retention payments. UW reports these payments on the W-2 form. Employees may wish to seek advice from a tax professional.

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Project-based retention incentives for professional staff

For professional staff employees working on large scale and high priority projects where retention through the completion of a deliverable is critical to the successful and timely completion of the project, a retention payment may be made contingent upon completion of the project. While eligibility and payment amounts are similar to the retention incentive payments outlined above, project-based retention incentive payments:

• Are made at the conclusion of agreed upon deliverables such as completion of a project, project phase, or delivery of a product.
• May be made to employees working in professional staff temporary project positions.

Eligible professional staff employees must sign an agreement that describes the deliverable and completion date and agree to stay through the completion of the deliverable in order to receive payment; if agreed upon deliverable(s) are not met, the retention incentive payment is not paid.

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Department responsibilities

Managers who want to make a retention payment must complete the retention payment authorization and repayment attestation form and receive approval from their unit’s administrative official who has delegated authority to approve such a payment such as an appointing authority, dean, vice president, or medical center CEO or their delegate.

Departments are responsible for ensuring compliance with retention incentive payment requirements including:

• Reviewing the request for pay equity
• Collecting department and employee approvals on the Retention Incentive Payment Repayment Attestation (PDF), which includes repayment conditions.
• Coordinating the one-time payment in Workday.
• Monitoring the employee’s completion of the payment terms and continuous service requirements. For project-based retention incentives, completion of agreed upon deliverables and timely payment upon completion of the deliverable.
• Collecting the full amount of the incentive payment should an employee trigger the repayment obligations outlined above or, for project-based recruitment incentives, removing future payments entered if deliverables are not met.
• At the medical centers, Workforce Management Systems facilitates completing department responsibilities.

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Contact

Compensation 206-543-9404

Campus: [email protected] Medical Centers: [email protected]

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