(a) An institution of higher education as defined by § 61.003 may grant merit salary increases, including one-time merit payments, to employees described by this section.
(b) A merit salary increase made under this section is compensation for purposes of Chapter 659, Government Code, and salary and wages and member compensation for purposes of Title 8, Government Code.

(c) An institution of higher education may pay merit salary increases under this section from any funds.
(d) Before awarding a merit salary increase under this section, an institution of higher education must adopt criteria for the granting of merit salary increases.
(e) To be eligible for a merit salary increase under this section, an employee must have been employed by the institution of higher education for the six months immediately preceding the effective date of the increase and at least six months must have elapsed since the employee’s last merit salary increase.
(f) This subsection applies to an employee employed by the institution of higher education for more than six months. The requirement that six months elapse between merit salary increases prescribed by Subsection (e) does not apply to a one-time merit payment if the chief administrative officer of the institution of higher education determines in writing that the one-time merit payment is made in relation to the employee’s performance during a natural disaster or other extraordinary circumstance.