Generally, pay is negotiated by the labor unions and in the MOUs. You should recommend that they speak with their union representative about negotiating a new pay scale for the position the next time the MOU is negotiated.  If the employee is asking to advance to the next step within their classification range, you should advise the employee that they will be eligible for a merit increase at their next review period, which should be every 2080 hours (12 months if full-time). If there are special circumstances such as a special merit, consult with Human Resources.