Dear Faculty, Administrators and Staff Members,
Due to the financial impact of the COVID-19 pandemic, Salem State University faced a revenue deficit of approximately $26 million for FY21. As has been mentioned in previous communications and in open forums, the university worked hard to identify and include significant cost savings in our budget to reduce an unfunded gap. Unfortunately, we found ourselves $8.5 million short, and included a furlough plan as an additional cost reduction measure to make up the difference within the FY21 budget. These budget-balancing measures were approved by the Board of Trustees on June 10.
Pursuant to a recent notification from the Department of Higher Education, Salem State leadership is submitting today a proposal to the university’s three unions—MSCA, APA and AFSCME. In these proposals, furlough is defined as an uncompensated leave of absence from work (therefore vacation or other earned time does not substitute for furlough). In compliance with the FLSA (Fair Labor Standards Act), during furloughed time, employees will not be permitted to conduct any university-related business. Of course, Non-Unit Personnel (NUP) and Non-Unit Classified (NUC) employees will participate as well. Savings from NUPs are estimated to generate $758,000 in savings, which is 10.6% of the total savings from the furlough program. NUP employees comprise 6.6% of the benefitted workforce, by count.
While subject to negotiation, we have proposed a standard of 25 furlough days (five equivalent work weeks) for all eligible employees. I recognize this is substantial and I do not make this decision lightly. In fact, the five-week program will fall short of the full $8.5 million targeted in the budget; it will generate $7.4 million. After agreements have been reached with respective unions, and with supervisory approval, it is anticipated MSCA, APA, AFSCME, NUP, and NUC furlough time will be completed in FY21. Details about the 25 furlough days for NUP employees will be shared shortly.
I’m sure there are many questions and I want to briefly address some of these concerns. Below is information from the furlough proposals that responds to questions we’ve heard:
- Benefits like health insurance will remain in place during a furlough period if the employee continues to pay their portion.
- Employees on furlough may apply to receive unemployment benefits. Eligibility is solely determined by the Massachusetts Department of Unemployment Assistance.
- An individual can use up to 20 days of furlough per calendar year with no impact on creditable pension time (thus, an employee could use 40 days during an academic year). However, if an employee is close to retirement, the furlough could impact their pension’s average earnings calculation.
- To reiterate, employees will not be expected to or allowed to work during their furlough period. Supervisors are to work with their staff to reduce workload expectations. This is not a pay cut program; it is strictly a furlough.
The implementation of such leave will vary from union to union and is laid out in the proposal sent to each of their representatives. The university is fully committed to working with the MSCA, APA and AFSCME unions on this difficult but necessary matter and I look forward to our collaboration.
Sincerely,
John D. Keenan
President