Furlough/Salary Reduction Plan Implementation Guidelines Workshop for HR Administrators Local UCOP September 15, 2009

Slide 2 Purpose  Share information about how the furlough/salary reduction plan works and how it will be implemented at UCOP Not everything is fully decided; updates will be communicated as questions are resolved  Provide an opportunity to ask questions about the implementation

Slide 3 Agenda  UCOP Efforts Systemwide Local  Who is Furloughed?  Salary Reduction How it works One-time EDB Update Process/Key September Dates On-going EDB/OPTRS Maintenance  Furlough Timekeeping  Communications

Slide 4 UC Systemwide Efforts to Date  UC Board of Regents approved system-wide furloughs UC Board of Regents approved system-wide furloughs  UCOP posted FAQs General FAQs  FAQs For Administrators  Provisions Governing the Use of Furlough Time  Implementation Guidelines   UC is providing updates to OASIS One-time program to create EDB lines for the salary reduction On-going program to calculate/store furlough time accrued

Slide 5 UCOP Local Efforts to Date  Employee Status Confirmation: HR worked jointly with BRC, SCRT, Department Personnel Administrators confirming exemptions Contract, Visas, Students and START Timesheets Updated to include Furlough hours BRC Payroll will review program reductions  UCLA Payroll is implementing the UCOP Local programs One-time program to create EDB lines for the salary reduction On-going program to calculate/store furlough time accrued

Slide 6 Who is furloughed?  UC systemwide has identified specific exclusions from the furlough/salary reduction plan such as: Funding sources Type of employee Alternate plans for clinical enterprises  The program identifies exclusions by: Appointment Attributes Distribution Attributes  Location-specific exclusions/alternate plans beyond what is specified in the program must be approved by UCOP The exclusions must be consistent with the Regents’ intent and approved by the President

Slide 7 UCOP Exclusions CategoryHow to Identify Student EmployeesAppointment Type = 4 or Title Code Foreign national employees on H-type (H-1, H-2, H-3) & E3 visas. Visa Type = H1, H2, H3, E3 Contract employees Note: Refer to slide 9 for additional information Appointment Type = 1 Employees enrolled in START*RTP distribution lines for the employee exists * Note: Employees should be set up to participate in either the START program OR the Furlough Plan, not both.

Slide 8 Represented Staff  The furlough/salary reduction plan does not currently apply to represented staff unless they are Supervisors or Uncovered  If negotiations with unions result in represented staff participating in the Furlough/Salary Reduction Plan, the UC systemwide program would be run again for that bargaining unit only

Slide 9 Contract Employees  Does not apply to external agency employees.  Current contract employees: Departments should request that employees accept a voluntary amendment of the contract to permit the salary reduction. If the employee is unwilling to consider the amendment, the department may terminate the contract consistent with the contract’s provisions and offer a new contract that incorporates language related to the salary reduction plan.  New contracts must include the salary reduction language.  Contact Frank Tastevin at in HR for suggested language and department-specific guidance for existing and new contracts. If Frank is not available, contact Rene Jackson at

Slide 10 Determining the Furlough Band  Salary reductions and furlough accruals are based on a sliding scale of seven salary bands.  The Medical Contribution Base (MCB) as of 1/1/09 (or hire date if later) will be used to determine an employee’s furlough/salary reduction band.  What is MCB? An employee’s full-time salary equivalent as of January 1 st of a given year. This figure is used to determine an employee’s salary band for certain benefit premiums in the next calendar year – in this case for  MCB does not change throughout the year, even if the employee’s salary changes. Therefore, the employee’s furlough band will not change either, even if their salary changes.  MCB as of 1/1/09 (MCB Nxt in OASIS) will continue to determine the salary band, even when MCB Nxt is updated on 1/1/10.

Slide 11 Where to Find MCB-Nxt in OASIS Go to IINS screen, Field Name = Cur/Nxt ContBase (Current/Next Medical Contribution Base). Next Contribution Base, 088 ($88,000), is the MCB-Nxt for 1/1/09. This will be used to determine the Furlough/Salary Reduction band. Current Contribution Base, 086 ($86,000), was the MCB on 1/1/ LAST NAME,FIRST NAME HOME DEPARTMENT NAME

Slide 12 MCB  Most employees already have a value in MCB-Nxt.  As part of the UCOP one-time program to create pay reduction lines, any employee without a value in MCB- Nxt will have one calculated and populated. The MCB-Nxt will be provided based on the current salary as of the date the program runs.  For employees who return after a break in service, the MCB-Nxt must be recalculated if the break in service is more than 120 days. If the break in service is less than 120 days, the original MCB- Nxt should be used. Departments should work with Payroll to recalculate MCB-Nxt.

Slide 13 Furlough Band Table for Staff and Non-Faculty Academics Note: All Senior Management Group (SMG) members will be provided 10 furlough days regardless of their respective salary reduction levels. Salary Band MCB-Nxt Annual Compensation Furlough Days Total Equivalent Salary Reduction 1<=40k< $40,000114% k$40,001-$46,000135% k$46,001-$60,000166% k$60,001-$90,000187% k$90,001-$180,000218% k$180,001-$240,000249% 7>240k>$240, %

Slide 14 Salary Reduction Processing  The UC Furlough/Salary Reduction Plan reduces an employee’s pay regardless of whether furlough time is taken.  The pay reduction must be implemented in a way that preserves the employee’s original salary and benefits.

Slide 15 How the Salary Reduction Works  To create the salary reduction, new distribution lines with new DOS codes need to be added to the EDB (similar to RTP lines for employees on the START program). Two new DOS codes: SRB = time-based salary reductions SRS = flat $ rate reductions (e.g., stipends)  Every eligible distribution line requires the corresponding SRB/SRS line. One SRB/SRS line cannot correspond to multiple REG lines.  UCOP is developing a program that can be run once for every bargaining unit to create these SRB/SRS lines. The first time it will be run will be in September for September payroll (key dates will be discussed later).

Slide 16 SRB Line in the EDB (REG example) LAST NAME,FIRST NAME HOME DEPARTMENT NAME APPOINTMENT TITLE DEPARTMENT NAME /01/09 08/31/10

Slide 17 Part-Time Employees  Part-time employees will have their salary reduced in proportion to their full-time equivalent salary. Example (based on previous employee). Appointment = 60% appointment Annual Full-time equivalent Salary = $87,355 60% of Full-time equivalent Salary = $52,413 Furlough Salary Band = 4 ($60,001 - $90,000) Furlough Salary Band 4 = 7% salary reduction Distribution % to enter on the SRB Line = 4.2% (60% x 7%) Salary Reduction = $3,669 ($87,355 x 4.2%)

Slide 18 Paying Employees on Exception Time  Salaries for exception time reporting employees who are automatically paid by OASIS will automatically be reduced by the SRS/SRB lines.

Slide 19 Paying Employees on Positive Time  For variable, positive-time employees who are paid by OPTRS, the salary reduction amount needs to be calculated and processed each pay period.  SRB lines entered in the EDB will carry through to the Time Roster.  Based on the salary reduction percentage and eligible number of hours worked, the Time Roster must be updated with the appropriate number of SRB Reduction Hours.  The number of SRB hours to enter on the Time Roster is based on the hours reported on the eligible REG line subject to the reduction. There should always be a corresponding SRB line for every eligbile REG line.

Slide 20 Salary Reduction Calculation Reduction % from Salary Band Table # of Hours on Pay Status from the REG Line # of SRB Hours X= 1. Put Hours on Pay Status on the REG Line in the Time Roster. 2. Calculate the Hours to populate on the SRB Line of the Time Roster using this formula:

Slide 21 Calculation of SRB Hours X= For our example, let’s assume MCB-Nxt = 049 which corresponds with Salary Band 3 and a 6% reduction percentage. If the employee has 4 hours worked on the REG line. Reduction % from Salary Band Table # of Hours on Pay Status from the REG Line # of SRB Hours X=

Furlough Pay Reduction & Timekeeping One-time EDB Update Process Accruals and Usage

Slide 23 Key September Payroll Dates

Slide 24 Furlough Timekeeping  Employees will accrue furlough days based on their level of participation (salary band tables) and eligible time worked.  Furlough time off is time on pay status.  OASIS will calculate the accrual and may be used to report furlough day usage.  Two new DOS codes have been set up for recording furlough accrual and usage. FUT = Furlough Leave Taken. FUA = Furlough Leave Accrued (will rarely be used by departments in certain circumstances because the accrual is system-generated).

Slide 25 Furlough Band Table: Staff and Non-Faculty Academics Salary Band MCB-Nxt Annual Compensation Furlough Days Accrual Rate Total Equivalent Salary Reduction 1<=40k< $40, % k$40,001-$46, % k$46,001-$60, % k$60,001-$90, % k$90,001-$180, % k$180,001-$240, % 7>240k>$240, %

Slide 26 Accruals, continued  There is no “minimum time on pay status” requirement for furlough accruals. OASIS will accrue based on time worked for the eligible distribution lines.  Furlough balances will be housed in the PTO bucket.  Earnings statements will not contain furlough balance information.

Slide 27 Usage  Employees must be given the opportunity to use furlough days during the plan year and can begin using them as early as September 1.  Employees are expected to use all of their furlough days during the plan term (September 1, 2009 – August 31, 2010). Furlough time will expire at the end of the plan term, or upon separation from employment, whichever occurs first.  Furlough time is for use during pre-determined mandated closure days. Location-wide closures: December 23rd, 28th, 29th, 30th; April 16th and June 18th Employees who are excluded from the plan may choose to use vacation, comp time, or leave without pay during mandated closures in accordance with policy and collective bargaining agreements. Additional closures may be scheduled at the Department or Divisional Unit level.  Furlough days leftover after any mandated closures may be taken at the discretion of an employee, with the approval of the employee’s supervisor.

Slide 28 Usage, continued  Furlough days are intended to be used on a monthly basis spread over the course of the furlough period. However, accrued furlough days may be saved up and used in blocks prior to the end of the furlough period with the supervisor’s agreement.  Supervisors also have the authority to approve the use of furlough days in advance of accrual in order to manage employee schedules during the plan year and for mandated closures. However, there are two issues to consider: First, tracking use may be more complicated. Second, if an employee leaves during the plan year, and they have used more than they have accrued, there is no mechanism to recover the value of those additional furlough days.  Furlough time should be recorded in one-day increments for exempt employees, ¼ hour increments for non-exempt employees. Furlough leave usage must be in alignment with policy = exempt employees must use leave in whole day increments based on their schedules. For example, for a 50% exempt employee who works 4 hours M-F, a furlough day needs to be 4 hours.  Change of status – how will changes be handled where an employee is in a position affected by furlough and then transfers to one that is not? If an employee transfers to a position or has funding changed that results in them no longer being part of the program, any unused furlough days would remain in the bank and can be used up until August 31, 2010.

Slide 29 Tracking/Reporting  OASIS will calculate and accumulate furlough accrual hours.  Accrued hours will show on the Time Benefits Roster.  Departments will be responsible for managing furlough leave usage and balances. Departments can use: Timesheets or other internal tracking systems.

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