Over two hectic months, COVID-19 has dramatically changed the world we live in and our campus operations. I am tremendously proud of the ways UW-Madison has responded. The value of a great public university has never been clearer, providing research, information and education related to the pandemic. Unfortunately, the costs of this crisis to the university are substantial. This memo outlines our necessary expense reductions, including employee furloughs.
Thanks to your energy, spirit and dedication, our university has been a leader in the response across Wisconsin, acting decisively to preserve public health, loaning facilities to our state, opening our residence halls to UW Health employees and first responders, and sharing much needed expertise to aid the state in decision-making. You have exemplified the Wisconsin Idea in ways large and small, ranging from development work on vaccines to creating open-source designs for face shields.
Protecting the health and safety of our community is our first priority. While the rapid reduction in campus operations presented challenges for us all, it was the right thing to do to protect our community and limit the spread of this virus.
I am grateful to all our employees, and especially want to thank those who are working onsite in essential capacities to preserve campus operations. Each of you has played an important role in our response, whether you participated in the shift to alternate delivery of classes, are supporting our students or instructors in virtual environments, have helped keep research going, or are conducting outreach to communities around Wisconsin.
You’re already aware that this crisis has had a profound impact on our finances, which we had initially and conservatively estimated to be $100 million; it’s possible that the shortfall could be much larger. As we have continued to respond to this pandemic, the financial impacts have grown. Indeed, just last night the state announced that all executive branch agencies, including the university, will be asked to cut 5 percent of its state tax dollar funding yet this fiscal year (which ends on June 30).
We are fortunate to have confronted this crisis from a relatively sound financial footing and prior to allocating new budget dollars as part of the FY21 budgeting process. This money, in combination with drawing on our limited reserves and other cost-control actions, will allow us to address most of the $100 million shortfall through central campus actions. The immediate actions we took to control current and future costs in order to shield our employees from immediate impact included:
- Cancelling planned budget allocations and new investments
- Freezing travel and limiting non-essential expenses
- Deferring or altering some infrastructure projects
- Redoubling our efforts to enroll a strong freshman class
- Enacting a partial hiring and salary freeze, with limited exceptions
Given the expected financial challenges, however, we must take additional steps that, unfortunately, will have a direct impact on all of our employees. We will face this challenge as a community, asking for a shared sacrifice among faculty, academic and university staff, while expecting the largest contributions from our leadership and highest earners.
We will take the following steps:
Campus-wide Furloughs: For most faculty, academic and university staff, we will institute a graduated, progressive program of unpaid furloughs beginning no earlier than May 15 and running through Oct. 31, 2020. A furlough is mandated unpaid leave and is not a layoff or non-renewal. Employees retain their job and, when back in work status, have full access to their accrued benefits.
The policy will apply to most employees, including those on grant or other non-101 funding. We will exempt graduate assistant, post-doctoral, temporary and student employees and non-FTE appointments.
Employees earning over $150,000 will take six days of furlough over the next six months (a 4.6% reduction per month). Those earning between $80,001 and $150,000 will take five days (a 3.8% reduction per month), those earning between $50,000 and $80,000 will take four days (a 3.1% reduction per month), and employees earning under $50,000 will take three days of furlough during the six months between May and October (a 2.3% reduction per month). The number of furlough days will be adjusted for those with 9-month appointments, so they bear a similar salary reduction over the course of the year as others with the same annual income.
Leadership pay cuts: The provost, vice chancellors and I are voluntarily taking a fifteen percent reduction in pay for the next six months. This is approximately the equivalent of a 10 percent pay cut, plus six furlough days.
Work-Share Program: Units that are either heavily impacted by financial losses or that have had major impacts to on-site operations will have to reduce their workforce more. In order to avoid full furloughs among these employees, we are seeking to operate a Work-Share program, under guidelines from the Wisconsin Department of Workforce Development (DWD) and the federal CARES Act. This will require approval from DWD but we are hopeful we will receive that approval and be able to avoid more extensive furloughs.
A Work-Share program keeps employees partially employed by sharing available work so that all workers continue to work part-time. Under the program, employees will see a reduction in their working hours of between ten and sixty percent and will share shifts to cover remaining work in the units. Workers in the Work-Share program can apply for expanded unemployment benefits that are pro-rated for the partial work reduction.
Employees participating in the Work-Share program will not need to take any of the intermittent furlough days described above. Units that will participate in the Work-Share program in full or in part include University Housing, Facilities Planning & Management and the Wisconsin Union, among others. In the next two weeks, employees will be formally notified if their work unit will take part in the Work-Share program.
Employees with Reduced Work in Units that are Not Eligible for the Work-Share Program: The Work-Share program is designed for units where many employees are affected by cutbacks. Some units have only a limited number of employees without full-time work or who cannot telecommute. In these circumstances, supervisors will work with employees to determine if they can be reassigned to other work or if a position-specific furlough is needed, involving the reduction of work hours based on the amount of work available.
Implementation of the Work-Share program and identification of potential reassignment opportunities for those not eligible for Work-Share is ongoing and the use of campus COVID-19 emergency leave will be extended through May 15 for those who need it. Campus COVID-19 leave will not be available after May 15.
Voluntary Leave Without Pay: Finally, we will also offer voluntary leave without pay (typically part-time) to those who would like to take this step and whose workload allows for it. Please contact your supervisor or HR representative if you want to pursue this option.
These short-term HR actions will save us up to $30 million toward the $100 million-plus shortfall we are currently facing.
Between now and the fall I do not anticipate any further actions or cuts and believe that these steps will prove to be sufficient. But we are still facing significant uncertainty about the future. Although we’re planning for any number of scenarios, none of us knows exactly how we’ll be operating this fall, or the condition of the state’s budget headed into the next biennium. Both of these factors could significantly deepen our financial problems and may require further expense reductions that could be considered as early as this fall.
I know this is a lot to ask in a time period when we have all worked so hard, and so many other parts of our lives have already been disrupted. As we move through the summer and into the fall, I pledge that we will continue to provide as much information as we can as well as opportunities through governance to share input and ask questions.
To read the furlough policy and an FAQ from the Office of Human Resources, please visit https://hr.wisc.edu/covid19/furlough
Further updates will be provided directly from the Office of Human Resources via deans, directors and human resources representatives. Questions can be directed to your supervisor or HR representative, or to the Office of Human Resources at (608) 265-2257 or firstname.lastname@example.org.
Again, I deeply appreciate everything you are doing and look forward to moving our institution out of this difficult period as quickly and safely as possible.
Chancellor Rebecca Blank