NYU spokesman John Beckman just confirmed that NYU is indeed considering a compulsory plan to cut some administrators’ pay by 25%. He left the following comment on my post:

So, let me respond to this and try to provide a little clarity.

It is important to start with some context — these plans are two of many options that the University is now looking into to increase administrative savings as part of our Re-engineering II effort (which is meant to produce an additional $10 million/year in administrative savings above the $30+ million/year already redirected to academic purposes through Re-engineering I). So, two key thoughts — these are two of a number of options to achieve administrative budget savings, and they are still under consideration.

1) There are some administrative positions at the University that are currently paid as year-round jobs; however, the workload really seems to be tied to the academic year (for example, to the presence of students). Therefore, during the summer months, some of these positions have a lot less work. If a department or school believes that a position does not carry a full 12 months of work, that position will be submitted to Compensation Office for evaluation.

It is important to understand that if we go forward with reclassifying some positions from 12-month to, say, 10-month positions, we would continue to treat the employees in the reclassified positions as annual employees, so their health insurance and other non-salary related benefits would remain in place on a year-round basis. Also, this is not a program that we expect would be implemented broadly across the entire university administration and school administrations. To be clear: neither this program nor the one I describe below have been formally implemented. Nor have we identified any specific positions; that would be up to the school or administrative unit to do. The idea behind these programs we are contemplating is that they may possibly help units meet budget reduction targets without taking away someone’s position and benefits. We estimate that it might involve a few dozen positions, but that is only an estimate. If we do go forward, implementation would probably take place in 2010 rather than 2009, though that is not settled yet.

2) we are also contemplating a voluntary program in which some employees would choose to work three-day or four-day work weeks in exchange for a pro-rated salary. As in the case of the mandatory program, their health insurance and other non-salary benefits would be fully maintained. In this case, it would be up to the employee to volunteer, and up to the employee’s supervisor to agree that he or she could do without him or her one or two days per week.

As is customarily the case each year, there will be an email to the University community from John Sexton in the next four weeks on the University’s budget for 2009-10. That will be followed shortly by a more detailed memo from Exec VP Michael Alfano providing details on the tools, processes, and timelines to be used in Re-engineering II. The expectation is that the full impact of Re-engineering II will be felt in summer 2010 (as I indicated above).

Hope this was a little helpful

– John Beckman, NYU Public Affairs

As I said before, it’s fine that NYU is trying to save money. In these economic conditions, you can’t blame them. But I’m not convinced this plan is the way to cut costs. Look, for instance, at this line from Beckman’s response: “The idea behind these programs we are contemplating is that they may possibly help units meet budget reduction targets without taking away someone’s position and benefits.” This sounds nice. And, if layoffs were the only alternative, I would support this plan because a part-time job is better than no job.

However, since Beckman didn’t dispute it, I assume that the plan would be to pay out the reduced salary over the entire year, rather than paying full checks during the 9 or 10 months the employee works. This seems like a clear attempt to get the affected administrators to quit – who would be able to afford a sudden $1000 reduction in take-home pay? If the employee quit, then NYU could both claim they avoided layoffs AND “re-engineer” the job as part-time, with part-time benefits and lower pay, before offering it to prospective workers.

If NYU implements this plan and is really trying to help out the affected employees, NYU will pay out the reduced salary during the months that they are working. That way, they will (I hope) be able to find seasonal work during summer and not have to deal with the huge quality-of-life drop that would accompany a big reduction in monthly pay, all while keeping their full-time benefits.

Photo courtesy of Flickr user Phoney Nickle.