Pay Reduction Program

Faculty and P&A Employees

About Pay Reductions

A pay reduction is an alternative to furlough for P&A and Faculty employees. Pay reductions allow the University to save salary costs to help meet budget challenges caused by the COVID-19 pandemic. Affected employees receive a reduction in pay in an amount corresponding to their institutional base salary (IBS). To offset the pay reduction, employees will receive a bank of hours off, which they have the option of taking.

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.

Annual Pay Reduction Hours Split Between Periods 1 and 2

Pay Reduction Program hours off were divided between periods 1 and 2. When splitting resulted in an increment smaller than four hours, the split was adjusted so that a larger number of time-off hours was assigned to the first period, as illustrated in this example:

Annual pay reduction percentage = 2.055%
Preliminary annual pay reduction hours = 42.75 hours
Hours rounded to the nearest four-hour increment = 44 hours
Period 1 hours = 24 hours
Period 2 hours = 20 hours

Taking Your Pay Reduction Program Hours

You will see a balance for a new leave type called "Pay Reduction Program" in the My Time tab in MyU starting July 1, 2020. You can begin taking your Pay Reduction Program hours starting July 1. It is important to note that use of these paid hours is optional. If you decide to take any of this time, 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.

Pay Reduction Program hours off may be taken in consecutive or intermittent workdays and may be taken in half- or full-day increments.

Pay Reduction Program hours will not affect vacation accrual.

Pay Reduction Program hours may be taken adjacent to other leave time and holidays.

Pay Reduction Program hours expire December 20, 2020, for period 1 and June 20, 2021, for period 2. They cannot be "cashed out" if an employee leaves the University before that time.

Employees in 9- and 10-month appointments who do not have vacation hours as part of their benefits are entitled to use these special paid hours off during the timeframe of the program. 

Pay Reductions and Your Benefits

BENEFIT                        

IMPACT

Medical

No Impact

Dental

Basic Life

Additional Employee Life

Spouse Life

Child Life

Voluntary Short-Term Disability

Severance–nonrenewal

Severance payment is based on years of service, annual salary on your last day of work, and percentage of appointment. So the salary decrease over the fiscal year will reduce your annual salary and would affect a severance payment calculated with that rate only if an employee is non-renewed and their last day of work occurs while on a decreased salary.

Retirement: Faculty Retirement Plan

While the percentage of contribution is not changing, contribution amounts (both employee and employer) will be decreased based on the pay reduction.

Retirement: Minnesota State Retirement System

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. For more information, contact MSRS at www.msrs.state.mn.us or 800-657-5757.

Academic Disability Plan

If you are already receiving academic disability benefits, your benefits will not be affected; however, if you become newly disabled after the reduced pay has gone into effect, your academic disability benefits will reflect the reduced pay.

Frequently Asked Questions

For more detailed information on the Pay Reduction Program, see this Frequently Asked Questions page.

More Information

OHR Contact Center: ohr@umn.edu, 612-624-8647 or 800-756-2363.