Personnel Cost Saving Announcement

Dear Colleagues,

As you are aware, NJIT has engaged in a comprehensive effort to plan for the long-term financial health of the university while addressing the serious fiscal impact of the pandemic. We have made many difficult but prudent decisions to date, including a salary freeze, a hiring pause, reduction of discretionary spending by departments, and a hold on approvals of all new capital projects. In addition, 100 percent of the senior leadership team has donated a portion of their salaries to the Highlander Student Emergency Fund. These actions have helped us through this initial period, but it is becoming increasingly clear that we must expect and plan for significant financial challenges well into the future. 

These cost-saving measures are critical steps toward addressing part of our $15.2 million short-fall for the first half of Fiscal Year 2021. However, because employee salaries represent the majority of NJIT’s operating budget, our deficit cannot be addressed without enacting further measures. Therefore, NJIT is announcing the following actions, with the goal of delaying or preventing the need to implement university-wide layoffs or involuntary furloughs:  
 

Senior Leadership Compensation Reduction

The senior leadership (including, but not limited to, the provost, all school deans, as well as vice presidents, senior vice provosts and chief officers) will take a 5-10 percent reduction in compensation. I will take a 10 percent reduction in salary. This change will take effect on July 1 and continue at least through the remainder of the calendar year, at which point we plan to reassess all of our financial decisions based on the university’s fiscal health.
 

Voluntary Faculty and Staff Separation Incentive Program (VSIP)

NJIT is offering a voluntary, enhanced separation incentive program for eligible employees. This is a one-time, completely voluntary program for eligible employees and entails separation from the university effective August 31, 2020. Tenured faculty and full-time staff who have combined age and years of service at NJIT equal to or greater than 80 and are at least 55 years of age will be eligible for the program. Tenured faculty will receive a lump-sum payment equal to 100 percent of their annualized base salary, and all other eligible employees will receive one week of pay for each year of service up to 50 percent of their annualized base salary. This program is only available to employees enrolled in the Alternate Benefit Program (ABP) defined contribution plan in accordance with state law. See full details of the Voluntary Separation Incentive Program as well as the VSIP Request Form.

Voluntary Furlough Program (VFP)

NJIT is offering eligible administrative staff the opportunity to voluntarily take a temporary unpaid leave. For the period of June 8, 2020 through July 31, 2020, eligible employees will be permitted to request a minimum of two consecutive full weeks of leave. The employee portion of the health care premium will be waived for the period of furlough and will not need to be paid upon return. Employees participating in this program may choose to file a claim for state unemployment compensation. The university will not contest the claim.  

This program is voluntary and subject to supervisor approval, in order to maintain business continuity. Areas performing critical operations can opt out of the program. See full details of the program here as well as the VFP request form. 

Temporary Suspension of University Funded Contributions to the Defined Contribution Retirement Plan for Salaries over $175,000

Effective July 1st, the university will suspend its discretionary contribution to the defined contribution retirement plan for employees with a salary greater than $175,000 under the Supplemental Benefit Program & Trust, which is above the cap funded by the State of New Jersey. This change has no impact on the Alternate Benefit Program (ABP) defined contribution retirement program at or below the current $175,000 pension contribution cap. This suspension of discretionary employer contributions is anticipated to be in place through June 30, 2021.

It is our hope that these initial efforts will forestall the need to enact involuntary furloughs and/or university-wide layoffs. If, however, participation in these programs is not sufficient or the university’s financial position makes it necessary, NJIT will be forced to implement involuntary furloughs and/or university-wide layoffs.

We understand that this is not welcomed news and that these actions have very real consequences for the faculty and staff of NJIT. In working to resolve the tremendous budget shortfall caused by the COVID-19 pandemic, we are making our best effort to minimize the negative effect on our faculty and staff. Unfortunately, it is not possible to close our budget gap without taking the steps outlined above.

If you have any questions about these programs, please contact the Department of Human Resources by email at hr@njit.edu.

Thank you for your contributions to NJIT and for your understanding as we enter this regrettable but necessary phase of our efforts to address the challenges presented by COVID-19.

Sincerely,

NJIT President Joel S. Bloom