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PHASE II. ANNUAL COMPENSATION ADJUSTMENT The Annual Compensation Adjustment (ACA) is the Council-approved adjustment often referred to as a Cost of Living Adjustment (COLA). Implementation When deemed appropriate by the City Council, the wages for each regular full-time and part-time employee not represented by a collective bargaining may be adjusted, effective January 1 of each year. The percentage increase approved by the City Council represents the second phase in the overall compensation policy. Adjustment Criteria The ACA shall be granted only when earned based on demonstrated on-the job perFormance, supported by the recommendation of the employee's immediate supervisor and preceded by a year-end performance evaluation rated satisfactory or above. All recommendations will be reviewed by the City Administrator who will recommend approval or denial of the ACA to the City Council for final approval. If a performance evaluation is rated less than satisfactory or it is determined that the employee has areas of job perFormance in need of improvement, the employee may receive less than the full ACA percentage increase. PHASE III. PAY EQUITY COMPLIANCE The State of Minnesota's Pay Equity Law requires that "every political subdivision of this state shall establish equitable compensation relationships between female-dominated, male-dominated, and balanced classes of employees in order to eliminate sex-based wage disparities in public employment in this state." (Minn. Stat. § 471.992, subd. 1) The term "equitable compensation relationship" means that the compensation for female- dominated classes is not consistently below the compensation for male-dominated classes of comparable work value ..." (Minn. Stat. §. 471.991, subd. 5). A. In order to meet the requirements of the Pay Equity Law, the City Administrator shall annually conduct an analysis of compensation using the job evaluation study method determined by the City Council. B A Pay Equity Adjustment may be necessary if the annual Pay Equity analysis indicates a pattern of compensation for female and male-dominated classes which is inconsistent with the requirements of State Law and the Pay Equity Regulations as set forth by the Department of Employee Relations. C. The Pay Equity Analysis and any subsequent compensation adjustment represents the final Step in the overall compensation process. (Policy revised per Resolution 7616, adopted May 24, 2010) 43