Dear Colleagues:

I am pleased to announce that our administration has partnered with the Board of Trustees, resulting in the reimbursement of faculty and staff for salary reductions imposed in response to the extraordinary budgetary pressures related to COVID-19. These salary reductions occurred from July 1, 2020, through March 31, 2021. 

Each member of our current faculty and staff whose salaries or wages were reduced will receive a one-time bonus payment matching that reduction, subject to applicable taxes. This set of FAQs will help answer questions you may have, including ones about eligibility and timing. This action does not affect the suspension of retirement contributions that occurred during the same time as the wage and salary reductions. 

You will recall that in summer 2020, the College anticipated significant strains on the FY21 budget. The decision to go fully remote would result in reduced revenue due to a likely drop in projected enrollment and a 10 percent reduction in tuition. There also would be increased expenses for technology enhancements to facilitate online instruction, as well as costs for testing and other charges relating directly to COVID-19.

What was not known with certainty was the scale of the revenue reductions and increased expenses. In order to preserve employment positions while also protecting the long-term financial health of the College, the campus community was called upon to share in the sacrifice. Some staff experienced furloughs; we made cuts in operating expenses; moved money from the capital reserve to help meet ongoing expenses; instituted pay reductions of up to 6 percent based on income levels; and suspended the College’s retirement contributions. Employees earning less than $37,000 did not have their salaries or wages reduced.

While record financial losses were initially anticipated, it was determined in the spring that the financial picture was strong enough to discontinue the compensation cuts effective April 1, 2021, restoring pay and the College’s retirement contributions three months before the end of the fiscal year. Now that we have “closed” the College’s books for 2020-21, the final COVID-19-related and other expenses were less than anticipated and revenue was stronger than predicted, thanks in part to three rounds of federal relief payments to colleges and universities. The College is now in a position to reimburse faculty and staff for their lost salary and wages.

I share this news with immense gratitude for the extraordinary efforts made by each of you to deliver on our mission in extremely challenging circumstances. From the sudden pivot to remote instruction in March 2020, through a fall 2020 semester of exclusively remote instruction, followed by a spring 2021 term with many students on campus, but most of our instruction still online, and now during a fully in-person semester in which we encountered a virus spike and imposed masking mandates—through it all, faculty and staff alike have stepped up in exemplary ways to educate and care for our students.

I also want to take this opportunity to let you know that we will be working with faculty leadership in the College’s shared governance structure to create a College-wide committee to help us make budget allocation decisions moving forward. Formation of this committee, which also will include staff representation, will allow us to set budget priorities as we take a pause from the current strategic direction and continue to monitor the impact of the pandemic. I also hope such a group will help us look beyond the yearly horizon and set spending priorities that span multiple fiscal years. There will be more to share about the formation of this committee in the days ahead.

Again, I recognize that this salary reimbursement only partially mitigates the impact on your personal finances from the College’s response to COVID-19. Still, I hope you will receive this news as a sign of our commitment to you and your well being, to our community as we move forward together, and with immense gratitude for your sacrifice and service.

With gratitude,

Nicole Farmer Hurd
President

 

FAQ: Pay Cut Reimbursement

When and how will payments be made?

The reimbursement will be made on or about Oct. 22 in a separate pay from your regular earnings.

How will I know the amount of my reimbursement?

The reimbursement will appear on your pay statement — accessible through Banner Self-Service — as a separate earnings code labeled “one time bonus.”

Will taxes be withheld?

Yes, based on each employee’s payroll withholding instructions for 2021. The payment is subject to all applicable withholding taxes.

Will the reimbursement be subject to the College’s retirement contribution?

No; the payment is not subject to retirement contributions.

Will insurance premiums, employee retirement contributions, or any other benefit costs be deducted?

No.

Are retirement contributions that were reduced between July 1 , 2020 and March 31, 2021, also being restored?

No.

Will salary increases that would have occurred effective July 1, 2020, be accounted for in this reimbursement?

No. The reimbursement is for reduced salary only. However, employees who received promotions between July 1, 2020 and March 31, 2021, will also receive reimbursement up to the new rate associated with their new position, based on the effective date of their promotion.

Who is eligible?

Those employees who were employed by the College on Oct. 1, 2021, and had their pay reduced due to salary or wage rollbacks between July 1, 2020 and March 31, 2021.

If I have additional questions, whom should I contact?

Call the Human Resources Office (610-330-5060, hroffice@lafayette.edu).

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