OA Feedback on Progressive Pay Reduction (PPR) plan
Updated information about the PPR plan is located on UO’s Human Resources website: https://hr.uoregon.edu/programs-services/covid-19-resources/covid-19-progressive-pay-reduction-plan.
(This text was sent via email to the oanews listserve on April 29, 2020.)
Thank you for joining us last Friday for a drop-in Zoom session on the proposed Progressive Pay Reduction plan (PPR) put forward by UO Employee and Labor Relations. Almost 300 OAs attended the session to ask questions and share thoughts about the proposal. Additionally, 75 OAs emailed responses to the questions we sent out last week. In this email we will identify next steps the OA Council is taking, recap the questions we asked last week, and outline major themes from the responses and drop-in session.
OA Council co-chairs Brady Nittmann and Larissa Ennis will meet with Missy Matella and Peter Fehrs in ELR later this week. We will explore OAs’ broad interest in a partial furlough plan where OAs would take a progressive, set number of unpaid days off each year, resulting in savings equal to those proposed in the PPR, rather than taking a pay cut. We will also share with them the themes and questions that came up in the open session.
In the interest of being transparent and comprehensive, we are sharing a great deal of information in this communication, so thank you for bearing with us! If you have questions or want to connect with us, please email firstname.lastname@example.org.
Warm regards, your OA Council: Larissa Ennis, co-chair
Brady Nittmann, co-chair
Thor Mikesell, vice-chair
Anna Duncan, secretary
–Last week, the OA Council asked these questions via email in advance of the Friday meeting:
- Should the expense reduction program for Officers of Administration mirror by default the program for United Academics? For example, if UA rejects the progressive pay reduction plan and elects layoffs, should OAs also face layoffs rather than pay reduction?
- What feedback do you have on the draft PPR plan itself? See https://provost.uoregon.edu/files/ppr_plan_-_program_description_draft_-_4-16-20_with_calculator.pdf
- In the current situation, other universities have implemented unpaid time off (furloughs) instead of pay reductions, or layoffs. Which of these strategies do you think would work the best for OAs at UO?
–We gathered responses via email and aggregated them anonymously to protect respondent confidentiality. The major themes from these responses were the following, many of which were reiterated during the open session:
- General feeling that OAs should not follow United Academics’ decision by default
- OAs are overwhelmingly in favor of some kind of plan that avoids layoffs
- Strong interest in exploring a furlough program (unpaid days off rather than pay cut with same expectation of hours worked)
- Concern about impacting base salary for many reasons, including recognizing past merit, possibility of future merit, and unemployment benefits
- Positive feelings about the progressive nature of the proposed cuts
- Suggestions that the cuts start at a higher salary, and that cut bands should continue to increase above the current $200,000 top level
-Based on the email responses we’d received as of last Thursday, we sent the following questions to HR and received these answers:
How do the proposed cuts take into account the savings the UO has had due to fewer activities (events, travel, etc.) as well as the federal compensation we have/will receive?
The proposed cuts would have to be triggered by a loss in state expenditure or reduced enrollment. While we may receive money from the federal government or save money from reduced employee travel, etc., PPR would kick in only when one of the triggering events occur. While other savings might be helpful in other ways, they aren’t directly linked to one of these triggering events. PPR is designed to offset the specific financial impact of one of these triggers.
How many employees are in each of the salary bands proposed, and what are the amounts of revenue that will be derived from each salary band?
We (HR) don’t have those exact calculations but we can say that the savings derived from each scenario is at or less than the expected loss. So the expected loss in revenue from a triggering event is not completely offset by all the reduction in expenditures from PPR.
If we were to propose raising the floor to $50k from $40k, and to add tiers above the current top-most tiers, would that balance out?
The program would have to be significantly redesigned. Given where the majority of our employee population is in terms of salary, it isn’t so much that we would have to add tiers above but rather increase the percentages at the new low to middle tiers to offset the loss from those employees who would receive no cuts. This is to say, we have far more employees at the $0-100k level than we do at the $250k+ level. Given the losses we’d be talking about (multiple millions of dollars), if we raised the floor we couldn’t just raise the ceiling, we would need to offset the loss of the lower paid folks in the PPR program through all remaining income levels. While a progressive pay reduction system will inherently “tax” those at the highest end the most, the bulk of our employees are not at that high end and we would still need to tax them to hit those savings targets.
If an OA has two positions at different base rates, will the % cut be calculated on each of those two base rates separately, or will base rates be added together then the % cut calculated?
The entire non-grant portion of the employee’s salary will be reviewed for determining the % reduction. As we get closer to finalizing the PPR plan, the University will need to issue specific guidance regarding split appointments.
The plan says that those paid on research grants will be exempt from the reductions, but what about those of us paid on ICC grant returns? Our workload will not likely change much even if enrollment drops drastically. Our budgets work on a longer term with a great deal of lag.
As we get closer to finalizing the PPR plan, the University will need to issue specific guidance regarding this question.
There are retired OAs and faculty working in post-retirement positions. If these OAs (Executives) and faculty post-retirement appointments meet the salary dollar threshold for a pay reduction will those positions be included in the PPR plan?
Generally, the goal is to have employees covered by PPR, including retirees.
What will happen with the money saved? Will it stay in the units or will it be moved to Central and managed appropriately?
If we have a $5 mil. loss we would be using PPR to respond to the loss in the short term, even if there might need to be more significant actions needed to address the recurring losses. It isn’t that the University is “saving” money, we are responding to triggering events that cause a loss in revenue, and will have to reduce salary/expenditures in direct response to that loss.
–We gathered the following questions during Friday’s call, and will be sharing these with ELR:
Does the proposed PPR plan reduce base salaries? If so, how will the restored base salary be calculated at the end of the PPR? Will across the board and merit increases be calculated on the normal base salary, or the reduced base salary?
What does this mean in terms of pay bands within the levels of OA groups? Would there be a reduction in an OA’s band level if they fall below the minimum pay in their current band?
Does a reduction in pay due to COVID-19 impacts allow for collecting unemployment benefits?
The current C.A.R.E.S Act allows for an additional $600 on unemployment income. In many cases, people who have been furloughed or let go will actually be receiving more income than they would while working. Is there any consideration to potentially offering voluntary layoffs , for those who would, from a financial aspect, be better off than while working?
Retirement and other benefits
Would PPR decrease employees’ salaries for retirement calculations, or have other impacts on existing retirement contributions?
I am an OA planning on retiring in a few years. I am concerned about the proposed pay reduction, as this would affect my retirement calculations, which will be based on my last 3 years’ salary. I would be happy to volunteer for unpaid leave, etc., but would not want to impact those payments. Will any special arrangement be possible for employees with close-in retirement dates?
How does the PPR affect health insurance coverage? Other non-insurance benefits, like staff tuition discount?
Does UO have to pay for unemployment benefits?
Who is impacted
How will people paid from funds other than E&G (for example ASUO funds, student fees, ICC returns) be impacted?
Will the employees who are already in extended LWOP also be part of the PPR plan?
Should essential OAs be subject to the same loss of pay? (They’ve already been in harm’s way since the stay at home order.)
Has there been any conversation around offering incentives for staff to retire that are close to retirement as a means to create some attrition to free up budget lines, while also benefitting eligible staff?
Will individual departments be afforded the option of cutting an S&S amount equal to the pay reduction instead of making salary cuts?
How does a PPR affect international employees on visas that are tied to pay ranges? What considerations are there for these?
PPR structure and timeline
Will the reduced salary be permanent? Or, go up once the university rebounds?
Many OAs are concerned that the starting point ($40K salary) is too low, and that the percent cuts should continue to increase beyond the $200K salary level. Can you help us understand the reasoning behind the low and high tiers of the plan? Will the pay reduction timeline be connected to ending the hiring freeze? If not, will new employees be hired at a similarly reduced pay rate?
Can the plan provide more flexibility – e.g. can employees “give back” accrued vacation or sick time? Preserving a base salary is optimal for many reasons and if it is possible to offer the UO a savings through reduced hours or forfeiting other benefits, can these be offered as options?
Has there been discussion, or precedent, for a voluntary FTE reduction option whereby those of us who feel that we would be okay taking a larger cut (e.g. going down to .8 FTE) could opt to do so, to spare others from having to take a cut?
Do any of the federal funding programs provide assistance that could offset the changes we need to make? For example, do they have incentives for continuing payroll for which we may qualify?