furlough model presented to the faculty senate 21 january 2014 by tom gruszka all information in...

Furlough ModelPresented to the Faculty Senate

21 January 2014by Tom Gruszka

All information in this presentation can be accessed in Gruszka’s Professor Folder

(Mustang Express, Faculty Tab, Professor’s Folder Link, Dr. Gruszka, Salary Related Workshops, 21

January 2014)

Purpose

• If a furlough is mandated, the faculty can make an offering as to how the furlough is to be carried out.

Assumptions

• Personnel in Athletics (15) will not be held responsible for the deficit.

• Personnel in the Foundation (3) will not be held responsible for the deficit.

• Personnel for which greater than 90% of their salary is grant funded (13) will not be held responsible for the deficit.

Assumptions (cont.)

• Personnel who are part of the bargaining unit (35) will not be included because of the time that would be necessary for negotiations to take place.

Decisions, Part 1 (values)

• Faculty (5)/staff (?) retiring before the Fall 2014 semester will be exempt from being furloughed, since any salary loss could not be recovered.

Decisions, Part 1 (values) (cont.)

• Faculty new to WNMU with a salary less than $65,000 (17 out of the 20 new faculty) will be exempt from being furloughed. This group can be considered to be “held harmless” of the current financial deficit; further, it is possible that this group is the most vulnerable to be laid off.

Decisions, Part 1 (values) (cont.)

• Staff (43) with a salary less than $25,500 will be exempt from being furloughed. Besides being the lowest paid employees, this would avoid the possibility of an employee dropping into a lower bracket for paying insurance while still paying the higher rate.

Consequence of Assumptions and Decisions, Part 1

• Based on the Assumptions and the Decisions, Part 1, the remaining employee pool (236) would be affected by a furlough.

Decisions, Part 2 (affecting the furloughed faculty/staff)

• Furloughed faculty/staff would be divided into three groups, based on salary:

Decisions, Part 2 (affecting the furloughed faculty/staff) (cont.)

• Furlough pay reduction amounts would be calculated using marginal rates according to the following rules :

Example: If Rate 1 = 2%, then Rate 2 = 4% and Rate 3 = 8%

Example: If Rate 1 = 2%, then Rate 2 = 4% and Rate 3 = 8%

• Percent of total salaries versus percent of total furlough debt:

Worse Case Scenario• Marginal Rates (& Actual Salary Reduction

Rates):oRate 1 = 3.2% (Actual Salary Reduction Rate:

Range: 0.07% - 1.9%);oRate 2 = 6.4% (Actual Salary Reduction Rate

Range: 1.9% - 3.4%)oRate 3 = 12.8% (Actual Salary Reduction

Rate Range: 4.0% - 9.1%)o Total Savings (Salary and Fringe): $297,500

Decisions, Part 2 (affecting the furloughed faculty/staff) (cont.)

• Number of furlough days (or hours) is calculated based on the actual percent of salary reduction and the length of contract.

Example: Using Rate 1 = 2%, then Rate 2 = 4% and Rate 3 = 8%

Talking Points• Accrued sick/vacation time should not be

reduced because of a furlough.

• Faculty (and maybe staff, too) should be able to decide the timing of any salary reductions.

• Should employer contributions to ERA and ARP still be made for furloughed time?

Talking Points (cont.)• Should a request be made that any

employee whose furlough days exceed 5 days be requested to take a Voluntary Salary Reduction for the remaining calculated furlough days (this could affect Group 2 and Group 3 employees)?

• Should stipends be added to an employee’s salary before calculations?