UA calls off furloughs for lowest-paid staff, details CV-19 pay cuts

The University of Arizona's lowest-paid workers will no longer be expected to give up pay under a plan to cope with coronavirus-related budget shortfalls, UA President Robert Robbins said Friday.

In March, Robbins announced a program of furloughs and pay cuts to help cover an expected $250 million deficit over the next year, with employees making up to $44,450 told to take 13 days off through next June.

Friday's revision lifts that requirement from those UA staffers: "any university employee earning less than $44,500 will now be exempt from furlough days," Robbins said.

The new plan includes about two dozen new brackets of furloughs — effectively pay cuts, with employees required to take unpaid days off — and more details about salary cuts for staffers paid more than $150,000 annually.

There are now 26 steps of expected furloughs, ranging from 14 days for workers paid $44,500 to $44,999, to 39 unpaid days for workers making $81,000 to $150,000.

Those furloughs are the equivalent of up to a 10% pay cut for employees making less than $75,000, with up to 15% cut from the pay of employees making up to $150,000.

The highest-paid UA employees will see pay cuts of 15.4% to 20%.

The initial plan, announced by Robbins on April 17, had just three furlough steps.

In an email to staff and faculty last month, Robbins said that the university anticipates losing more than $66 million by the end of the fiscal year, and the most credible projections show the university losing more than $250 million by June 2021.

The cuts include senior vice presidents, and Robbins' own salary, he said.

Furlough hours can be taken over time, but the university previously said that all employees must take at least eight hours of furlough time every pay period, beginning May 11 until the required furlough days are fulfilled.

Furloughs taken in increments shorter than a week likely make employees unable to apply for unemployment benefits for that period under the temporary expansion of UI during the pandemic.

Employees paid with grants and payments for sponsored research will not have their pay reduced for that portion covered by outside sources, UA officials said.

Robbins said in April that the Tucson university had already slashed spending in attempt to address an immediate cash flow shortfall of $40 million, slashing approved building projects worth about $7 million, and expenditures for the university's strategic plan, worth about $22 million. The UA will also "pause" hiring and delay merit increases, saving about $26 million, Robbins said. 

In total, the university expects to crawl back about $93 million in savings from May 11 to the end of next June.

The UA is one of Southern Arizona's largest employers, and the university's economic impact for the state was valued around $4.1 billion in 2017, according to a study completed last year for the Arizona Board of Regents.  In total, the state's public university system generates around 84,000 jobs with $4.6 billion in wages and produces about $11.1 in economic activity for the Arizona economy. 

"We will adapt if conditions change dramatically or we realize significant unexpected new sources of revenue, restructuring savings or expense reductions," Robbins said. While the cuts are "significant," Robbins said it will cover less than 40 percent of the project shortfall through June 2021, even as salaries and benefits are more than 60 percent of the UA's spending. 

Robbins warned that traditional layoffs "may be necessary in the future to ensure the long-term financial stability of the University," but said that a comprehensive layoff was not the right approach for university's "immediate response." 

"With this plan, employees will retain their employment and health care benefits," he said. "We all will share in this as a team and we all will sacrifice as a team, but in a manner that respects your work, your contributions and your compensation and benefits, to the highest extent possible."

UA plans live fall classes

This week, Robbins announced that the university "plans to resume in-person classes in the fall semester," but did not definitively announce that classes will be held.

UA canceled live classroom meetings in mid-March over the coronavirus outbreak. The semester begins August 24. University officials have predicted a dramatic drop in enrollment.

"I am pleased to publicly announce today our intention to return to in-person classes at the University of Arizona for the fall semester," Robbins said in a news release. "We will honor all local, state and federal protective measures that apply, and, of course, there are many factors that remain beyond our control."

"However, we are tackling what is within our control to ensure our students have the opportunity for a full on-campus experience," the UA president said.

Robbins made the announcement after having his blood drawn for testing on the first day of a COVID-19 antibody testing effort being carried out by the state and UA.