CSU Urges Faculty Union to Bring Furlough Option to a Vote

Facts About Furloughs Outlined by Chancellor's Office

June 29, 2009

From the CSU Chancellor's Office

The California State University administration today urged the leadership of the California Faculty Association (CFA) to bring the concept of a two-day-per-month furlough to a vote of its members. CSU has met with the faculty union three times to discuss the furlough option, but CFA has not yet scheduled a vote of its members. There are approximately 23,000 faculty members in the CSU; only dues-paying members of the CFA would be allowed to participate in a vote.

The concept of furloughs was proposed to all of the CSU’s labor unions as a way to address an anticipated $584 million cut, or 13 percent reduction, to CSU’s 2009-10 budget. Collective bargaining agreements between the CSU and its employee unions include provisions covering mandated nonretention and layoffs, but not furloughs. Each bargaining unit, therefore, must agree to negotiate furloughs. Two groups — the California State University Employees Union (CSUEU) representing 16,000 nonacademic employees and the Academic Professionals of California (APC) representing 2,400 student service employees — have agreed to discuss furloughs.

“Time is of the essence, and we need to prepare for the upcoming fall academic year on all of our campuses,” said CSU Chancellor Charles B. Reed. “We have provided answers to the questions posed by the CFA during our last meeting and are urging them to present the furlough option to their members for a vote. We need to move forward to address the massive budget cuts that the system is facing before the impacts are magnified.

“The CSU is facing an unprecedented crisis, and it will take cooperation and shared sacrifice from all of us to get through this next fiscal year and beyond.” The CFA’s questions and the CSU’s responses can be found here.

Approximately 80 percent of the CSU’s costs are salary and benefits payments. The CSU is proposing to furlough all of its employees (with the exception of public safety personnel) in all classifications, including management and executives, to help close the anticipated budget deficit. To date, approximately 21,000 of CSU’s overall workforce of 47,000 employees are looking at furloughs.

If adopted by all employees, furloughs would reduce the CSU’s salary expenditures by approximately $275 million. Other cost-saving options are being discussed to address the remaining deficit. The guiding principles Chancellor Reed has been working under are to “serve as many students as possible without sacrificing quality, and to preserve as many jobs as possible.”

CSU has also initiated changes to Title 5 of the California Code of Regulations for management and executive personnel. The modifications would allow the system to alter provisions related to furlough, salary reductions and unpaid holidays. The change was put into place to meet a 45-day requirement should any action be needed at the July 21 CSU Board of Trustees meeting. The Title 5 revision can be found here.

A furlough is a mandated period of time off without pay. Furloughs differ from salary reductions and pay cuts in that they are temporary and do not affect employment status, health benefit eligibility or pay rate for retirement benefits. Employees are not required to work on furlough days.

Fact Sheet: CSU’s Employee Furlough Proposal

As part of the state’s overall effort to close a $24.3 billion shortfall, Gov. Schwarzenegger’s May revision proposes a $584 million cut to the CSU’s general fund support for 2009-10, representing a 13 percent reduction in state support from 2007-08. The joint conference committee on the budget also has included the cuts in the budget they are continuing to debate. As part of an overall strategy to address this unprecedented funding reduction, the CSU is proposing a two-day- per-month furlough for all employees, including management and executives, but not public safety personnel.

A furlough is a mandated period of time off without pay. Furloughs differ from salary reductions and pay cuts in that they are temporary and do not affect employment status, health benefit eligibility, or pay rate for retirement benefits. Employees are not required to work on furlough days.

For full-time employees, this proposal would mean a total of 24 unpaid days for 12-month employees and 20 days for academic year (10 month) employees over the next fiscal year. Employees who are not in full-time positions would have the unpaid time calculated pro rata to their timebase.

The furlough, as proposed, would save approximately $275 million. Although this furlough proposal will not generate all of the cost savings needed by the CSU, it will produce significant savings, and other cost-saving options will need to be implemented. * Employees Covered by Collective Bargaining Agreements*

Collective bargaining agreements between the CSU and its employee unions include provisions covering mandated nonretention and layoffs, but not furloughs. Each bargaining unit, therefore, must agree to negotiate furloughs. As of June 23, two of CSU’s employee unions representing more than 18,000 employees — California State University Employee Union and the Academic Professionals of America — already have voted to enter negotiations over furloughs.

Management Employees

Although employees classified under the Management Personnel Plan (MPP) are not covered by a collective bargaining agreement, the CSU’s ability to furlough its approximately 3,200 MPP employees requires changes to Title 5 of the California Code of Regulations for management and executive personnel. On June 5, the CSU initiated changes to Title 5 altering provisions related to furlough, salary reductions and unpaid holidays. The change was put into place to meet a 45-day requirement for action at the CSU’s Board of Trustees meeting on July 21. The Title 5 revision can be found here.

Below are some additional facts on furloughs:

• Furloughs would not affect health benefit eligibility, rate of pay for retirement benefits or vacation/sick leave accrual. This has been confirmed by CalPERS.
• CSU has not finalized the details of how furloughs would be implemented, but expects to negotiate the details over the next few weeks with labor unions that have agreed to furlough.
• If any collective bargaining unit does not agree to furlough, the CSU would need to follow the process outlined in the labor agreements.
• The CSU is proposing to furlough all employees, including part-time employees, with the exception of public safety personnel
• The two-day-per-month furlough is the equivalent of about a 10 percent pay reduction.