The University of California began its systemwide furlough program this week, with most UC employees sharing the pain of pay cuts to help offset the loss of more than a billion dollars in state support.
The furlough plan, formulated on the basis of suggestions from faculty and staff, uses a sliding scale to lessen the hardship for those earning the least, and the resulting salary reductions will be spread across a full year so that employees will know how much pay to expect each month.
More than 100,000 of the university system's 180,000 employees are subject to the provisions of the furlough program. For approximately 70,000 union-represented employees, implementation of furloughs or alternative approaches is subject to individual contract agreements and collective bargaining.
From Sept. 1, 2009, through Aug. 31, 2010, participating faculty and staff are required to take from 11 to 26 furlough days resulting in salary reductions of 4 to 10 percent. The number of furlough days is based on pay bands ranging from under $40,000 to more than $240,000.
"All of us — students, their families, others served by the university and UC leadership — owe the deepest gratitude to every faculty member and every staff employee participating in this painful but unfortunately necessary endeavor," said Dwaine Duckett, UC vice president for systemwide human resources. "It's their commitment to the university's mission that will enable us to continue to strive for excellence and access to opportunity despite formidable financial challenges."
As part of the effort to make the furlough plan as fair and low-impact as possible, pension calculations will continue to be based on pre-furlough salaries, accrual of vacation and sick leave will not be reduced, and health and welfare benefits will not be affected.
The Board of Regents approved systemwide furloughs July 16. Savings through furloughs are expected to cover approximately a quarter of an $813 million shortfall in state funding for the current and past fiscal years, as are previously approved student fee increases. More than $300 million will come from campus cuts, resulting in fewer faculty, lecturers and staff; fewer programs, courses and student services; and larger class sizes. Further administrative cost controls and debt refinancing account for $100 million.
In addition, increases in utility costs, employee and retiree health benefits, student over-enrollment and other expenses not funded by the state add up to more than $330 million, bringing the total state funding gap to more than $1 billion.
Campuses and other UC locations have flexibility in determining how furlough days are scheduled for full-time and part-time UC staff and faculty.
Employees not scheduled to be affected include Lawrence Berkeley National Laboratory staff, the majority of health and safety workers, foreign nationals working at UC with H visas and academic and staff employees whose pay is funded entirely by research or extramural funds such as government and private contracts and grants.
Those who volunteered for reduced hours under the START program do not have to participate if the reduction is equal to or greater than what it would be under the furlough program. Employees with contracts that cannot be changed unilaterally are also exempt, but have been asked for voluntary salary reductions consistent with their pay bands.
To protect patient safety, the five UC medical centers were allowed to generate the same level of savings as the furlough plan through alternative cost-cutting measures. These included elimination of vacant positions, planned attrition, layoffs, management of overtime pay, program closures and voluntary separation. In addition, the medical centers reduced use of contract and temporary labor, eliminated some pay increases — except those required by contract — and reduced salaries for senior management.
Discussions with union representatives about achieving savings equivalent to salary reductions resulting from furloughs have begun systemwide.
The campuses have been developing cost-cutting measures for some time, Duckett said, and their approaches to achieving salary savings in lieu of furloughs could range from reductions in hours worked to layoffs.
"We hope union leadership will allow their members to participate in the furlough program and share in these sacrifices by the lowest-impact means possible," Duckett said.
At UC Riverside, approximately 100 members of Local 501 of the International Union of Operating Engineers will participate in the furlough program under an agreement announced last week. Salary increases will go forward as scheduled on Oct. 1. Increases will be based on the unreduced salary, and then the increased salary will be reduced by the applicable furlough rate (www.universityofcalifornia.edu/news/article/21794).
Under a new contract with the Federated University Police Officers Association, more than 250 campus police officers, who are exempt from furloughs as safety workers, have agreed to forego any across-the-board wage increases or merit increases over the next two years. Also, in recognition of the fiscal environment, "step" and longevity increases during the next 12 months will be suspended, saving UC more than $800,000 (www.universityofcalifornia.edu/news/article/21793).
"Both the local union unit at UC Riverside and the university police officers association recognized the financial challenges facing the university," said Duckett, "and both stepped up in a spirit of partnership to do what's best for the entire UC community."