Furlough and Pay Reduction Program FAQ

To address the extraordinary budget impacts of the COVID-19 pandemic, the University has announced a Furlough and Pay Reduction Program. The plan is weighted toward employees with higher incomes. Labor-Represented and Civil Service employees, who are paid hourly, will be required to take unpaid hours off of work, based on their income. Faculty and P&A staff will receive a pay cut with equivalent days off. The program exempts:

  • Employees with an institutional base salary of less than $60,000
  • New employees with a hire date of June 22, 2020 to December 20, 2020, are excluded for period 1. New employees with a hire date of December 21, 2020, or later are excluded from both program periods.
  • Professionals-in-training (including predoctoral and postdoctoral associates and residents)
  • Graduate assistants
  • Undergraduate student workers
  • H-1B and E-3 visa holders
  • Academic temp casuals and temp/casuals
  • Employees in phased retirement
  • Employees on military leave while on active duty
  • Employees on academic disability leave as of June 21, 2020 (excluded only for the duration of their disability leave)

For Faculty employees covered by the University Education Association collective bargaining agreement (eligible UM Duluth and UM Crookston Faculty), contract negotiations are continuing. Please consult with your UEA representatives if you have questions.

The following questions and answers will provide more details on how the program will be implemented.

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GENERAL QUESTIONS (All Employees)

FURLOUGHS (Civil Service and Labor-Represented Employees)

PAY REDUCTIONS (Faculty and P&A Employees)

MISCELLANEOUS AND SPECIAL CIRCUMSTANCES

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General Questions

Question: How do I know what my furlough hours or pay reduction will be?
Answer: Furlough hours and pay reductions are determined by your institutional base salary (IBS). To find your IBS, follow the instructions in this help guide. Once you have your IBS, see this earnings table to find your furlough hours or pay reduction.

Q: What is institutional base salary, and what earnings are used to determine it?
A: An employee's institutional base salary (IBS) is the sum of an employee's base salary, administrative augmentations, increments, and Regents Professorships pay amounts from all appointments. IBS does not include items such as overtime pay, shift differentials, or augments that are paid through additional pay. Separate Faculty summer appointments are not included.

Q: Does my supervisor have to approve when I take furlough hours or Faculty/P&A time off?
A: Yes. As with other leave time, your supervisor must approve furlough hours (to be taken in quarter-hour increments) or pay reduction time off before the pay period in which the leave will be taken.

Q: Will furlough or pay reduction time off affect my vacation or sick leave accruals?
A: No. There is no impact to leave accruals. Annual leave and sick time will continue as usual.

Q: Can employees give more by taking more furlough hours or a higher pay reduction than assigned?
A: No, employees are not able to increase furlough hours or pay reductions beyond what has been assigned. However, for employees who want to give more, a hardship fund is being developed to help University employees that will be funded by voluntary contributions from employees. There is also a fund to help students facing economic hardship.

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Furloughs

Q: When should furlough hours be used?
A: Employees must use half of their required furlough hours in each furlough period.

  • Period 1: June 22, 2020 through December 20, 2020
  • Period 2: December 21, 2020 through June 20, 2021

Employees who have not scheduled their period 1 furlough hours before December 7, 2020, will have the hours scheduled by their department to be taken by December 20, 2020. Employees who have not scheduled their period 2 furlough hours before June 7, 2021, will have the hours scheduled by their department to be taken by June 20, 2021.

Q: How do I arrange to take my furlough hours?
A: Starting July 1, submit requests for furlough hours as you do for any other absence—by using the My Time tab in MyU. Choose "Furlough" as the reason for the absence. (Some employees will use a time-tracking system unique to their unit.) For detailed instructions on submitting a furlough absence request, see this help guide.

Q: Why are the numbers on the earnings table sometimes different in period 1 and 2?
A: Annual furlough hours were split between periods 1 and 2. When splitting resulted in an hour increment smaller than a quarter hour, the split was adjusted with the smaller number of hours assigned to period 1. Example:

Annual furlough hours = 42.75
Period 1 furlough hours = 21.25
Period 2 furlough hours = 21.50

Q: Can I use paid leave in lieu of a furlough day?
A: No. You cannot use annual leave, personal, or sick time to offset furlough time.

Q: Can I take a furlough day before or after a University-designated holiday?
A: Yes, with your supervisor's approval. It will have no effect on holiday pay.

Q: How will the furlough program affect my benefits?
A: See this table.

Q: How do unpaid furlough days affect my MSRS pension?
A: While the percentage of contribution is not changing, contributions (both employee and employer) decrease based on the lower earnings. This may affect an employee's pension benefit if they are in their five years of highest earnings used in the pension benefit calculation. Employees can personally make up the missed pension contributions (both employee and employer), but this typically only makes sense for those who are in the five years of highest salary. Service credit would only be affected if the furlough time causes the employee to drop below 40 hours per 80-hour pay period. For more information, contact MSRS at www.msrs.state.mn.us or 800-657-5757 before taking any furlough time.

Q: Will furloughs affect seniority?
A: No.

Q: Do furlough hours affect my FMLA leave?
A: Employees who are subject to furlough hours may use their unpaid furlough hours concurrent with FMLA leave. (The parental leave would not necessarily be the first leave used on FMLA.) Furlough hours will not affect an hourly employee's ability to take paid parental leave, but employees must work with their supervisors to schedule the designated number of unpaid furlough hours within the applicable period (period 1 or period 2).

Q: What happens to my furlough hours if my rate of pay changes during the coming year?
A: Employees who see a decrease in their institutional base salary that moves them to a lower pay tier will have their furlough hours reduced accordingly. Adjustments will not be made for employees who see an increase in their institutional base salary during period 1 or period 2.

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Pay Reductions

Q: How do I arrange to take my pay reduction time off?
A: Starting July 1, you will see a balance for a new leave type called "Pay Reduction Program" in the My Time tab in MyU. It is important to note that use of these paid hours is optional. If you decide to take any of this time, starting July 1 you can simply submit requests for Pay Reduction Program hours as you would for any other absence—by using the My Time tab in MyU and with approval of your supervisor. For further instructions on submitting a request for pay reduction time off, see this help guide.

Q: How will the pay reduction program affect my benefits?
A: See this table.

Q: How does a salary decrease over the year impact the MSRS pension?
A: If you elected to remain in MSRS when you moved into a P&A position, the percentage of contribution is not changing. Contribution amounts, both employee and employer, will decrease based on the lower salary. This may affect your pension benefit if you are in your five years of highest salary ("high 5") used in the pension benefit calculation. Due to Minnesota statute, employees will not be able to pay for the missed pension contributions. Service credit will not be affected by the pay reduction.

Q: What happens to my pay reduction if my salary changes during the coming year?
A: Employees who see a decrease in their institutional base salary that moves their salary to a lower pay tier will have their pay reduction reduced accordingly. Adjustments will not be made for employees who see an increase in their institutional base salary during period 1 or period 2.

Q: Can Faculty choose to take the reduction as a reduction in salary or a reduction in retirement contributions?
A: No, this option is not available.

Q: Will Faculty and P&A leaving the University have their vacation paid out at their rate before the pay reduction or at the reduced rate?
A: Vacation cash-outs will not be affected. They will be paid at the rate before the Pay Reduction Program.

Q: Are Faculty on a sabbatical or phased retirement included in the Pay Reduction Program?
A: Employees on a sabbatical are included in the program and will receive a pay reduction determined by their institutional base salary. Employees on a phased retirement are excluded.

Q: How was my sabbatical pay reduction amount calculated?
A: The Pay Reduction Program amount for those on sabbatical was calculated using the same institutional base salary (IBS) as other employees. Your administrative or collegiate unit also reviewed employees in their area on sabbatical and alerted OHR to cases in which a sabbatical was less than 100% so the Pay Reduction Program amount could be prorated. Sabbatical supplements paid to the employee are not included in the Pay Reduction Program calculation.

Q: What if I sign up for a phased retirement during the first period of the Furlough or Pay Reduction Program?
A: Faculty who enter a phased retirement during period 1 would be excluded from any further furlough hours or temporary pay reductions.

Q: How will the University ensure that Faculty who are paid from multiple sources (sponsored and non-sponsored accounts, clinical and academic funds, and so on) do not receive disproportionately large reductions due to separate cuts to those other sources?
A: For Faculty, the pay reductions are determined by their institutional base salary, which is defined as the total of base pay, Faculty and administrative augments, increments, and Regent's Professorship payments across all appointments. Income from other sources outside the University may be subject to other reductions beyond the University's control. Specific budgeting questions from Faculty in unique situations will be handled on a case-by-case basis.

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Miscellaneous and Special Circumstances

Q: Am I eligible for unemployment? Where can I get more information?
A: The State of Minnesota determines eligibility for unemployment insurance. When an employee files for unemployment through the state, use the reason code "COVID 19." The state will ask a number of questions to determine your eligibility, including other sources of income (such as paid leave, Social Security, retirement, and so on). These questions are factored into the state's 52-week look back at earnings, called your base period. Employees who want to file for unemployment should do so when their work is reduced below 32 hours a week, through no fault of the employee. Being furloughed is one factor that may determine eligibility. You are not eligible for benefits in any week in which you work 32 or more hours, or when your gross earnings for the week are equal to or greater than your weekly benefit amount. A partial benefit payment will be made for any week you work less than 32 hours and your earnings are less than your weekly benefit amount. The system will deduct 50% of your earnings from your benefit payment. In summary, employees considering filing for unemployment should:

  • File the week of impact
  • Use COVID 19 as the reason code
  • Direct questions on eligibility to the state. The University cannot make this determination.

Find information on Minnesota unemployment insurance at https://www.uimn.org.

Q: How will employees complete work they didn't perform during furlough or time off without using overtime later?
A: This will be handled between the employee and their supervisor. Options include identifying ways to streamline work, delaying timelines where possible, and managing furlough or pay reduction time away to ensure adequate coverage.

Q: Are employees on active duty military leave subject to the furlough?
A: No. Employees on military leave for active duty (excluding annual military leave) are not subject to furloughs or pay reductions. However, employees who have been on active duty and return to their position will have furloughs prorated for their remaining furlough obligation.

Q: I work as a Trades employee. Will the institutional base salary (IBS) report capture my reduced standard hours of 1,850 for furlough calculation purposes?
A: The report does not capture the reduced IBS for Trades employees. The calculation to determine your furlough hours will be handled manually in OHR, and you will receive a communication from University Services about your furlough requirement.

Q: Are employees in clinical positions or those 100% funded by research included in furloughs or pay reductions?
A: Yes. Furloughs or pay reductions apply to all positions that meet the earnings minimum.

Q: What is the benefit to the University of furloughing staff who are grant funded?
A: It would be a violation of cost accounting standards if a furlough program resulted in compensation or benefit costs being charged inconsistently across the University. Any costs charged to a federal account or project under those circumstances would be deemed unallowable and pushed back onto an institutional funding source.

Q: Does the Furlough or Pay Reduction Program affect the Retirement Incentive Program that is being considered for later this summer?
A: No, the two programs are separate from each other.

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