I am writing to you on behalf of the President’s Cabinet.
If we are not allowed to bring students back in the fall, the College faces a shortfall of $12.3 million, which is approximately 25% of our annual operating budget. We cannot meet this shortfall with operating budget cuts alone, since approximately 63% of the budget consists of salaries and benefits.
As you know, we have already put a hiring freeze in place. In addition, we are considering furloughs. A furlough is a reduction of time worked, either partial or complete, which produces salary savings, which will go toward reduction of the deficit.
The attached memo (below) from the President’s Cabinet contains a detailed message about furloughs. We are grateful to have heard already from some individuals that they may be willing to consider volunteering for a furlough.
Please read the memo and contact Dana Nagengast, AVP for Human Resources if you have questions or would like to volunteer to take a furlough. You can reach her at firstname.lastname@example.org
All the Best,
Dana Nagengast, SHRM-SCP
Assistant Vice President for Human Resources
Date: August 3, 2020
To: HMC Staff
From: The President’s Cabinet
Re: Contingency Planning – Reduced Hours, Furloughs and Persons Who Wish to Volunteer
We are presently waiting on guidance from the State of California as to whether the College can resume in-person classes and students will be permitted to return to campus this fall. If students are unable to return to campus this fall, this will result in significant financial challenges to the College due to a reduction in revenue by over $12 million dollars. Even after a projected 25% reduction in non-salary expenses, receipt of CARES Act funding and other measures we have taken, it will still be necessary to consider further cost cutting measures, including: a) an elimination of the college’s 12% retirement contribution to the retirement plan, b) salary reductions and c) furloughs. Regrettably, the revenue gap is so significant that the College has come to the conclusion that if students are not allowed to return to campus, the hours of certain staff must be reduced and that other staff will be furloughed.
We expect to know any day whether we will be in a position to welcome students back to campus this fall. If we are not able to do so, we will quickly announce staffing plans, including necessary reductions in hours and furloughs. In the meantime, we have heard from some of you that if it becomes necessary to take measures like this you would be interested in volunteering to be added to the list of those whose hours are reduced and/or furloughed.
We will consider anyone who volunteers, but in the end, the college reserves the right to decide, based on its operational and staffing needs, whose hours will be reduced, schedules to be worked, and who will be furloughed; and will do so irrespective of whether someone volunteers or not. Further, please understand that if someone volunteers, the College cannot guarantee that their hours will not be further reduced or be subject to a reduction in force (i.e., a permanent layoff). We certainly hope that it will not come to this and one of the reasons why we are taking these measures is to minimize that possibility.
We have also heard from faculty regarding how they can help mitigate the impact of staff furloughs and mandatory salary cuts on staff. Since faculty are providing instruction to students, there are no planned mandatory faculty furloughs. There are different considerations and constraints when addressing volunteer faculty furloughs. Sometime in the next week or so, the Dean of Faculty will send an email to the faculty on how they can voluntarily help to mitigate the impact of staff furloughs and mandatory salary cuts on all staff.
Those employees whose hours are reduced will experience a reduction in pay and any corresponding adjustments to benefits. Depending on the operational needs of the college, employees whose hours are reduced will be scheduled to work fewer hours per day or fewer days per week/pay period. In certain cases, exempt employees, will be furloughed one day per week or one day every other week, or similar configuration, with a corresponding reduction in compensation and benefit accrual adjustments.
Employees who are fully furloughed will be placed on an unpaid leave for a period that is likely to extend through the fall 2020 semester. Furloughed employees will not be eligible for benefits, but the College will provide some financial assistance to allow such employees to continue to participate in our group health insurance plans (i.e. medical, dental and vision). One of the eligibility requirements for health insurance is working a minimum of 20 hours a week. If your partial furlough does not result in going below 20 hours a week, your health benefits, in the current form, are unaffected.
We believe that full-time furloughed employees will be eligible for unemployment insurance (“UI”) benefits. Employees whose hours are reduced may be eligible for UI benefits, but that will depend on the level of the reduction and whether other individual eligibility criteria have been met. Here again, eligibility for such benefits is determined by the State of California and not the College.
Again, we sincerely regret the need for any of these actions. However, if you are interested in volunteering to be placed on the list of those whose hours will be reduced or furloughed, please immediately contact Dana Nagengast at email@example.com. Please reply by Friday, August 7, 2020.
The President’s Cabinet