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Thousands of University of Wisconsin System employees would receive 3 percent annual raises over each of the next two years if lawmakers and the System’s governing board approve a plan officials released Monday.

The state typically funds about 70 percent of the cost of UW System pay increases, with the rest coming out of tuition revenues. But with an in-state undergraduate tuition freeze expected to continue through the 2019-21 biennium limiting the System’s ability to fund its portion of the two-year, $123.4 million pay-raise plan, the System is requesting the state fully fund it, according to System spokeswoman Heather LaRoi.

The UW System employs about 39,000 people statewide.

“As labor markets tighten, salaries rise and inflation increases, reinvesting in UW faculty and staff with modest wage increases will ensure we are not falling behind and losing out on talent we need in Wisconsin,” UW System President Ray Cross said in an announcement. “Attraction, retention and recognition of high-quality faculty and staff are critical investment opportunities for future student success.”

The last pay-hike request came in 2016, when the UW Board of Regents and lawmakers approved a 2 percent increase for each year of the 2017-19 biennium. In five of the last eight fiscal years, however, UW System employees have received no pay increases, with increases averaging less than one percent a year between June 2011 and July 2019, according to the System.

Faculty salaries lag behind salaries at peer institutions, the System said. For example, salaries for full professors at UW-Madison are about 10 percent below the median for its peer group.

That has led to chancellors fighting for their faculty to remain on campus despite outside recruitment efforts.

The System’s annual faculty turnover report, released Monday ahead of the Regents’ scheduled meeting on Thursday, shows about 7 percent of UW faculty, or 434 people, departed in the 2017-18 academic year. That’s down from the 509 who departed in the 2015-16 school year, but still higher than in 2013-14, when about 330 people left.

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The proposed raises still would not bring salaries in the System even with peer institutions, but would give chancellors the ability to recognize employees’ work, according to meeting materials published Monday.

The Board of Regents will consider the employee compensation plan — submitted separately from the System’s capital and operating budgets — at its Thursday meeting in La Crosse. If it’s approved there, the proposal would go to the Legislature’s Joint Committee on Employment Relations and would have to be approved by the Legislature and incoming Gov. Tony Evers.

Evers, Senate Majority Leader Scott Fitzgerald, R-Juneau, and Assembly Speaker Robin Vos, R-Rochester, did not respond Monday to requests for comment.

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