LOUISVILLE, Ky. (WDRB) – The University of Louisville will temporarily cut pay for more employees, furlough some workers and stop making contributions to employee retirement accounts to preserve cash amid the COVID-19 pandemic.
U of L President Neeli Bendapudi disclosed the latest budget-balancing moves in an email to university employees on Tuesday.
The impact of the COVID-19 pandemic on our university has created a great deal of uncertainty for all of us. It has forced us to not only be agile, but to also make difficult decisions to protect the health and well-being of our students, faculty and staff. (1/8)
— Neeli Bendapudi (@UofLPresNeeli) April 21, 2020
U of L has a generous retirement benefit under which the university contributes 7.5% of employee pay and up to a total of 10% with an employee match.
Those contributions will not be made in May, June or July, saving $9 million, Bendapudi said. U of L has a little more than 7,000 employees.
"Suspension of our retirement match program was not an easy decision, but it is a fair process that will be shared by all faculty, staff and administrators," Bendapudi said in the email.
The hope is to resume retirement contributions on Aug. 1, she said.
And “all faculty and some staff members” who earn between $58,000 to $99,999 per year will see a 1% pay cut for May and June, she said.
Employees who earn less than $58,000 will not be subject to the pay cut, though their could be laid off temporarily as the university also plans an unspecified number of furloughs.
The furloughed employees will retain benefits such as health insurance, and the university noted that the additional $600 per week federal unemployment benefit is available in addition to Kentucky's maximum of $552 per week.
"(I)t is possible that during a furlough period, an employee could receive a similar or higher level of weekly compensation than from their current salary," the university said in a document distributed to employees.
U of L earlier this month announced pay cuts for employees earning more than $100,000.
In a video released with Bendapudi’s message, U of L Chief Financial Officer Dan Durbin said the university faces a $39 million shortfall because of the pandemic.
The biggest driver ($16 million) is lost healthcare revenue in the U of L Health system – which runs hospitals, outpatient centers and doctors’ offices – because of Gov. Andy Beshear’s mandate to cancel elective procedures to preserve capacity and protective gear, as well as people canceling doctors’ visits.
The university also took a $15 million hit in tuition from canceling in-person classes over summer term, although 550 were converted to online classes.
