The market modifier is a salary modifier used in exceptional situations where a higher salary is critical to attract or retain employees, or where inversion or compression issues need to be addressed. The following circumstances may apply when identifying the need for a market modifier:

  • a significant gap with relevant market rates for similar positions, or
  • a skills shortage for a particular type of position, or
  • a significant compression or inversion situation exists

With the concurrence of the Deputy Minister of Executive Council, the deputy head may apply a market modifier to a management or opted out and excluded position (assigned to Schedule 1 Part 2-A of the Classification Plan), or to groups of ten or fewer positions, of up to 20% over the maximum of the salary range, pay band or pay zone for the assigned class, where this is critical to the recruitment or retention of an employee, or where inversion or compression issues need to be addressed.

A market modifier for a management or opted out and excluded employee over 20% of the maximum of the salary range, pay band or pay zone for the assigned class, or for groups larger than ten employees, requires Treasury Board approval.

The market modifier shall be added directly to the employee's bi-weekly salary payment and is pensionable salary.


Documentation for market modifiers should include some or all of the following:

  • relevant market data including public sector comparators (evidence that market rates for comparable positions are higher)
  • demonstration of skill shortages (evidence that the particular skill-set required is in high demand and short supply)
  • competition statistics (evidence that the department has been unable to fill the position)
  • impact (evidence of the problem this creates for the department)
  • number of employees or positions affected
  • estimated costs
  • evidence of a compression or inversion situation

Market modifiers up to 20% of the maximum of the salary range, pay band or pay zone for the assigned class may be used for emerging situations in which detailed documentation is not available. In these situations the deputy head shall provide the Deputy Minister of Executive Council with a statement of the problem to be addressed through the market modifier, and any supporting information that may be available.

The deputy head shall report to the Public Service Commissioner as required.

Annual review

All market modifiers approved by the Deputy Minister of Executive Council shall be reviewed annually by the deputy head for their continuance, as changing market conditions may warrant removal or reduction of the modifier. Treasury Board may stipulate additional requirements as part of the approval of market modifiers over 20% of maximum, or for groups of ten or more employees.

The deputy head will report annually to the Deputy Minister of Executive Council on the status of all market modifiers. This report shall contain:

  • a review of the original documentation with an assessment of any changes that have occurred; and
  • a rationale for continuing, removing, reducing or increasing a market modifier.

Reducing or removing a market modifier

The market modifier will normally be reduced or removed when markets or salaries have changed or the original reason for the modifier no longer exists. In these cases employees will receive up to six (6) months notice of the removal or reduction.

Where removal or reduction of a market modifier will result in a significant decrease in salary, the deputy head may arrange a phased approach as appropriate.

About this directive

Authority: Public Service Act
Public Service Employment Regulation (PDF, 1.1 MB)
Application: Organizations under the Public Service Act
Effective Date: October 1, 2009
Contact: Alberta Public Service Commission:
Labour and Employment Practices; Classification, Compensation and Benefit Services

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