As announced in the President’s Roadmap 20/21 | Budget Adjustments letter to the community, to help cover the $20M budget gap for fiscal year 2021, the University is implementing a 4% pay cut for 18 months. This page is designed to describe those pay cuts.
Before diving into specific questions, it is helpful to start with a conceptual model of “the program.” By way of analogy, think of the program as similar to a time-bounded, payroll tax - a process that is blind to job function, source of funding, or academic/fiscal year boundaries. Payroll taxes have a set of individuals they impact and are calculated by examining that pay period’s gross amount each time payroll is run, over a set period of time.
The program is designed to reduce the wages received of all benefits eligible employees by 4% over the course of 18 consecutive months from all sources other than funds 26/27 (grants) and 47 (agency).
All employees (i.e. Faculty, Staff, and Executives) will be included in the program if they are:
- not an H1-B holder,
- not in a union,
- expected to earn over $50,000 in the 12 months following the start of their potential inclusion (excluding any income from funds 26/27/47.)
The reduction starts the first month of an employee's participation in the program.
All Staff will be tested for inclusion on November 2, 2020, or upon their date of hire through the duration of the program. Those staff who are ultimately included will have the start date of November 1, 2020.
Faculty will be tested for inclusion on November 2, 2020 if they volunteer to start with Staff, or on the day their next “contract” renews (or they receive their restatement of appointment) for their primary position. Those faculty who are ultimately included will have their start date set to the month they were tested for inclusion.
The program is 18 consecutive months in duration, blind to academic, calendar or fiscal year boundaries. The reduction will be calculated and applied to each pay-period as it occurs during the duration. Once an individual is in the program their personal clock starts ticking for 18 months from their start date.
Upon examination during each pay period throughout a person’s duration, all sources of paid compensation (with the exception of funding sources 26/27/47) for that period will be reduced by 4%. The 4% calculation will be tapered to ensure no employee’s gross is reduced below $50,000/year during their inclusion in the program.
Frequently Asked Questions
Does the salary reduction apply to supplemental contracts and stipends or just base salary?All salaries are affected except those paid from Funds 26, 27 (grants) and 47 (agency funds). All "assignments" and supplements are included for the pay periods that overlap with the 18 month duration.
Why not try a voluntary charitable give back? Is there any way that people with large salaries can give more to spare some who make over $50,000 but under $75,000?That’s an excellent question and one we support in spirit. Independent of the reductions, we’re exploring the idea of a fund within Advancement that could accept and distribute gifts in support of our employees.
What mechanisms will be put in place to guarantee restoration after no more than 18 months? What protections do faculty and staff have?It is our sincere intention to return, after the period of these pay reductions, to the status quo ante, and then to begin the salary increases envisioned in the Mercer compensation report. Like all employers, we will have to track and respond to exogenous forces that impact our revenue and expense structures during the pandemic.
Will faculty who are promoted during the pay cut period receive the 10% raise on their 'real' salary or their reduced one?The 10% promotion raise will apply to the unreduced salary, not the reduced one.
How will sabbaticals be handled? Will faculty on sabbatical receive compensation based on their 'real' salary or their reduced one?Faculty who are on sabbatical will be treated the same as those who are not. Specifically, the 4% reduction will be applied to their gross amount received in "real-time" per pay period.
What kinds of positions are expected to be eliminated from departments? Teaching faculty, research positions, staff, all of the above? What consultation will be taken before this is done, and who will be making these determinations?These issues will be administered by each Vice President for her/his area after consultation with those affected. The Provost working with the academic units will determine and implement these measures for the academic areas.
What actions are being taken to improve future finances?Here are a few current projects: We are investing in recruitment (search names) for future freshman class size growth, and developing a broad-based marketing campaign to grow interest and awareness in the University. We are launching a Dual Enrollment program for high school seniors. We are working on a project to monetize land use on the West Campus and elsewhere.
Many staff, faculty, and students are facing severe stress and anxiety. What can be done to help them? Can there be new ways to develop connections to the University and other social support mechanisms, mindfulness training, etc.?The University’s benefits package includes services from Carebridge to address personal wellness, mental health, social support organizations, etc. We encourage our employees to utilize this service. Students can avail themselves of the many support mechanisms within the Division of Student Affairs.
How will faculty indicate their option for salary reduction, if they choose to do it now?
We sent a form to every faculty member last week. Friday, November 6th, is the deadline to opt in to a November 2020 start for the 18 months of salary reduction.
The salary reduction for faculty who do not opt in will begin with the next appointment renewal.
An earlier start means an earlier completion for the faculty member, and less immediate fiscal stress for the University.
Will the faculty salary reduction affect only full-time faculty?The salary reductions will affect all employees (other than those covered by a collective bargaining agreement or those on H1-B visas) who are paid more than $50,000 per year (excluding any income from funds 26/27/47).
Full-time faculty often teach during the summer. Will this compensation be affected?
Yes for Summer 2021 for those who are in the program and their 18 month clock is in play.
No for Summer 2021 and Yes for Summer 2022 for those who start their clock on or after August 2021.
Over what time period is compensation calculated? Is it based on the compensation amount for a particular pay period or is it an annual amount [e.g., Fiscal Year (FY), Academic Year (AY), or Calendar Year (FY)]?"Total Addressable Compensation" will be recalculated each pay period for 18 months for those who are in the program. For most, this amount will be the same for all 18 months (their "monthly pay" unless their compensation is changed for other reasons), but for those who take on additional paid roles for some part of the 18 months, they will have that additional pay included in their "Total Addressable Compensation" for those months. FY/AY/CY are not relevant in terms of the per-pay period calculation.
When we begin the 4% reduction, will the employer-paid 1x salary life insurance be our base salary, or the reduced salary? When we go to do benefits next year, will the voluntary life insurance be limited by our base salary or our temporarily reduced salary?All life insurance calculations will be tied to the then current salary.
Can a Faculty volunteer to start some month other than November 2020?By default, Faculty will start on the day their next "contract" renews (or they receive their restatement of appointment) for their primary position. To ensure uniform application of the program, the only window for Faculty to volunteer for another start is to join Staff in November 2020.
I have an employee who earns $51,000, won’t their salary be reduced below $50,000 while they take the 4% reduction?No, the reduction will be tapered for those earning between $50,000 and $52,084 to ensure their gross income does not fall below $50,000 for the 12 months following the start of their participation in the program.
I have an employee whose position is donor funded (i.e. a fund 59), will they be included in the program?Yes, if the employee earns over $50,000 per year and is not an H1-B holder or union member, they will be included in the reduction program. Spending from fund 59 does impact the University in subtle but real ways and, as such, are included in the 4% reduction program.