UW to start second round of furloughs, increase minimum wage in January

The University of Wisconsin-Madison will implement more furloughs for spring semester to help offset revenue losses from the COVID-19 pandemic. The first round of unpaid leave, announced in August, ends this month.

Furloughs will begin Jan. 1 and last through June 30 to allow time for employees’ pay to return to normal, Chancellor Rebecca Blank said in an email Monday. They will have the same graduated structure as the current furloughs, ranging from three monthly furlough days with a 2.5% pay reduction to six monthly furlough days with a 4.6% pay reduction.

The university estimates that revenue between March and the end of this fiscal year in June 2021 will be about $320 million less than anticipated, Blank said. Some of the shortfall was offset through cost savings efforts, such as $27 million in savings from furloughs and salary reductions.

“The remaining gap is still very large, however, larger than any that we’ve faced in any past year,” Blank said. “It will take careful stewardship to chart a path back to financial stability.”

Blank said tuition dollars are down by about $24 million and research funding by about $28 million. Budget concerns have been exacerbated by Gov. Tony Evers' order that the university return some funding back to the state.

She and vice chancellors will continue taking 15% salary reductions, first implemented along with the furloughs in August. School and college deans will take "voluntary" 10% salary reductions, Blank said.

Laurent Heller, vice chancellor for finance and administration, said at a University Committee meeting Monday that the losses have been “mixed bags,” with different areas of campus faring both better and worse than anticipated.

“On balance, I’d say we trended a little better than most of our likely-scenario predictions,” Heller said. Though hiring freezes and furloughs have been helpful, he said he still expects a “tricky budget process” for fiscal year 2022.

The previous round of furloughs also included a 15% salary reduction for senior leaders, which is still in place until Oct. 31. 

UW-Madison will also continue moving forward with its commitment to a $15 minimum wage for all hourly employees. Though it temporarily halted the plan earlier this year, Blank said it will go into effect Jan. 17, mainly affecting custodial, animal care and food-service employees. The change does not affect student or temporary employees.

Blank added that a 2% wage increase to employees will begin in January and "offset most of the furlough's impact for our lowest paid employees."

Worker unions and Associated Students of Madison, the university’s student government body, have called for improved worker pay and protections throughout the pandemic. In an email last week, ASM student government chair Matthew Mitnick criticized the university’s hybrid reopening model for disproportionately harming low-income employees.

“Workers should not have to risk their lives by working in-person during a global pandemic just to maintain their paychecks,” Mitnick said. “UW needs to create a plan that does not place the financial burden on the students it serves and workers who allow it to operate. If full tuition is being charged, the university can and should absolutely be able to pay its workers.”