Budget Message - May 15, 2020
To Eastern Michigan University faculty and staff:
You don’t have to look far to see that substantial budget challenges, and the responses to them, permeate the entire higher education community in response to COVID-19.
Every university in the nation is making significant adjustments to address the financial impact of the disease. Sadly, Eastern Michigan University is no exception. (For a national snapshot of this impact, visit our budget impact website, which has a long list of universities and the budget reductions they have announced over the past month.)
As noted in my prior messages to our campus community, these are unprecedented times that require unprecedented actions. And while these actions may not be the kind we like to take, they are necessary to address the mounting budgetary challenges we face.
We don’t yet know, nor can we yet predict, COVID-19’s substantial impact on our primary revenue drivers – tuition, auxiliaries, and room and board. Meanwhile, the future availability of state aid is another great unknown, and it, too, is sure to have a significant revenue impact. While Michigan has not yet announced its state aid plans in response to the disease, discussions of a 10-20 percent state aid reduction for both the state’s current fiscal year (which expires in September) and next fiscal year, are receiving considerable attention.
For Eastern Michigan University, this situation requires us to continue to plan for significant budgetary impacts. We have taken great effort to research, evaluate and implement these next steps in the most respectful and supportive manner for our valued employees.
As a result of that effort, effective Monday, May 18, most of the University’s employees not covered under a collective bargaining agreement will begin a reduced work schedule/three- or four-day work week under the State of Michigan’s Work Share program, with a corresponding reduction in pay of 40 or 20 percent. This will be in place through August 1, 2020, and will affect more than 200 administrators and staff in all areas of the University. Further, effective today, six positions have been eliminated. One of these was unfilled, but five individuals have been separated.
These are not actions we had thought were part of our University’s future only a few months back, prior to the COVID-19 disruption to operations. I am aware that this is a difficult time to be without work, and I am very sorry to those affected by the position eliminations. Again, a few months ago I couldn’t have dreamt of a more unlikely prospect – eliminating positions and moving to a three/four day week for most of our administrative staff. It was not in any playbook that I ever anticipated, but this pandemic and its resulting economic impact is not in any historical playbook either.
The University will participate in the Work Share program through at least August 1, 2020. Our participation in the program exemplifies our determined efforts to proceed in a way that minimizes the financial impact on our employees to the best of our ability.
What is Work Share?
The Work Share program is offered through the Michigan Unemployment Insurance Agency (UIA). Under Work Share, the UIA will pay unemployment benefits to employees based on the 20 percent or 40 percent they will not be working.
Plus, there is an important, additional benefit now available (currently through the end of July 2020) through the federal CARES Act. The federal CARES Act provides an additional $600 per week for anyone receiving state unemployment benefits. Although we cannot guarantee or promise any federal benefit, we believe we are doing what is required to ensure our Workshare participants are eligible for it.
We anticipate that, due to our expected involvement in the Work Share program, our administrative staff members may receive federal and state benefits in addition to their salaries that, depending on their base salaries, could more than compensate them for the decrease in their base salary during their participation in the Work Share program.
Individual employees will not need to file for unemployment benefits as part of this program. The Work Share program is entirely employer-driven. Once the UIA approves an employer’s Work Share application, employees are paid unemployment benefits by the UIA in accordance with the details included in the University’s application. According to the state, all employees participating in the programs should be automatically eligible to receive the federal $600 weekly CARES Act supplement as well.
Our affected administrative personnel have been notified about the Work Share program by supervisors and divisional vice presidents over the past week. We appreciate the many questions that have been raised, as well as the overall understanding that these work reductions are necessary. Many employees also expressed appreciation for the steps the University is taking to manage this process in a way that supports employees to the degree possible.
The UIA has developed a helpful FAQ for employees participating in Work Share. University Human Resources is also developing its own FAQ, which will soon be available on the UHR website.
On April 29, I announced a salary reduction of 7 percent for myself and the executive leadership team, who will continue working full-time. Those efforts, along with the Work Share program, are among the first steps to be announced to address the budget challenges brought about by COVID-19. As a reminder, all University travel remains frozen until further notice and many capital projects are being suspended or delayed. All divisions of the University are equally affected by these earlier steps, including Athletics: the Athletic Director and three highest-paid coaches in football and men’s and women’s basketball have also taken 7 percent pay reductions, and the large majority of athletics administrative staff will take part in the University’s Workshare program.
The University is now in the process of working with the leaders of our collective bargaining units to implement the Work Share program for our bargained-for staff. We appreciate the dialogue we have had with those leaders and the insight they have provided us. We hope to have further information to share in the days ahead.
Thank you for your understanding as we work through the many challenges ahead of us. I am confident we are pursuing this difficult process with as much care and concern as possible for our employees. I understand that these are difficult times and understand the impact these actions may have on your lives and the lives or your families, friends and associates.
We will have more to share in the days and weeks ahead. We will continue to work to be as transparent as possible as we undertake these actions.
Stay safe, all, and my best wishes to each of you.
James Smith, Ph.D.