There is a Standard Pay Plan and an Executive Pay Plan for this State, as established by the Secretary with the approval of the Governor and as amended or adjusted in accordance with this subtitle. The purpose of the pay plans is to provide employees in positions that involve comparable effort, knowledge, responsibilities, skills, and working conditions with comparable pay according to the relative value of services to be performed. A pay plan is effective for a fiscal year only to the extent that sufficient money is available in the State budget for that purpose.

Except as provided in paragraph (2) of this subsection, the pay plans established under this subtitle shall include: all positions in the State Personnel Management System; and all other positions for which the Secretary has authority to administer pay. The pay plans established under this subtitle do not apply to: any position for which the pay is provided for by the Maryland Constitution; any position for which the pay is based, by law, on judicial pay; and except as provided in subsection (b) of this section, a position for which the pay is set by a unit with independent pay-setting authority. The Executive Pay Plan shall include each permanent position in the Executive Branch of State government, including each permanent position in the Governor's office, that is not included in the Standard Pay Plan and has a pay rate equal to or exceeding the lowest pay rate in the Executive Pay Plan. In addition, and notwithstanding any other law, the Governor may include in the Executive Pay Plan any executive management position in a unit in the Executive Branch with independent pay-setting authority, except a position in the University System of Maryland, Morgan State University, or St. Mary's College.

Subject to the approval of the Governor, the Secretary shall adopt regulations to carry out this subtitle. Subject to § 2–1257 of the State Government Article, the Secretary shall submit to the Department of Legislative Services, on or before July 15, October 15, January 15, and April 15 of each fiscal year: a list of the position, pay grade and step, title, name, and pay rate of each employee who was included in the Executive Pay Plan as of the last day of the preceding fiscal quarter; and the details of any lump–sum increases given to employees in the Executive Pay Plan during the preceding fiscal quarter. The quarterly reports required under paragraph (1) of this subsection shall include each flat–rate employee position in the Executive Pay Plan. Each flat–rate employee position included in the quarterly reports under subparagraph (i) of this paragraph shall be assigned a unique identifier that: describes the program to which the position is assigned for budgetary purposes; and corresponds to the position identification number used in the budget data provided annually by the Secretary to the Department of Legislative Services.

Pay rates in the Standard Pay Plan may be set by: a series of pay grades and steps within each grade; fixed rates; or minimum and maximum amounts. Pay rates in the Executive Pay Plan may be set by: a series of executive pay grades and steps within each grade; fixed rates; or minimum and maximum amounts. In setting or amending a pay rate, the Secretary shall consider: the prevailing pay rates for comparable services in private and public employment; experience; living costs; benefits; and the financial condition and policies of this State. A pay rate in either pay plan is subject to any limitations included in the State budget.

This section applies only to the Standard Pay Plan. With the approval of the Governor, the Secretary may amend the Standard Pay Plan to increase pay rates for specific classes to: recruit or retain competent personnel; or ensure that pay rates adequately compensate for the effort, knowledge, responsibility, skills, and working conditions of employees in the class. If an amendment affects a position in the Executive Branch that is listed in the budget bill in accordance with § 7-109 of the State Finance and Procurement Article, the amendment is contingent on the approval of the Board of Public Works. An amendment to the Standard Pay Plan may not take effect unless sufficient money is available in the budget to cover the resulting pay rates. Subject to § 2-1257 of the State Government Article, the Secretary shall report all amendments to the Standard Pay Plan to the General Assembly on or before the 15th day of the next regular legislative session. If the General Assembly rejects an amendment, the appropriate reduction in pay rates takes effect as of the next fiscal year.

This section applies only to the Standard Pay Plan. The regulations adopted under this subtitle shall provide for automatic increases, from minimum to maximum steps in a pay grade, of the pay rates set by the Standard Pay Plan for an employee whose overall performance is rated satisfactory or above on the employee’s annual performance appraisal.

This section applies only to employees whose positions are in the Standard Pay Plan. An employee in the Standard Pay Plan shall be denied a pay increase in any year if: an appointing authority has imposed the denial as a disciplinary action under Title 11, Subtitle 1 of this article; or the appointing authority denies the increase because of: an extension of an employee's period of probation under § 7-403 of this article; lack of productivity; or excessive, unexcused absenteeism. An employee may not be denied a pay increase for reasons of performance that adversely affects the value of the employee to this State unless substantial reasons of performance were cited on the employee’s midyear or final performance appraisal forms. An employee who is denied a pay increase under this section may appeal the denial under the appeal procedures for disciplinary actions in Title 11 of this article.

This section applies only to the Executive Pay Plan. An increase in a pay rate under this subsection shall be based on the employee’s performance. For or during a fiscal year, the head of a unit may recommend an increase in an employee’s pay rate above the rate for the previous fiscal year in the same grade in accordance with guidelines promulgated by the Secretary, provided that funds are available. A pay increase under this subsection may be made to recruit or retain competent employees or to recognize increased duties and responsibilities. Subject to the approval of the Governor, the Secretary may approve: a change in pay grade; a change from one class in a series to a different class in the same series; a new class or position; or another form of pay increase.

Subject to the approval of the Governor, the Secretary at any time may decrease the pay rate for any class included in: the Standard Pay Plan; or except for a position for which pay is set by a unit with independent pay-setting authority, the Executive Pay Plan. A decrease of a pay rate under this section applies to all employees in the affected class.