Issue 56: Friday Updates, 8/28/20

Budgeting for MSU Wage Reductions in KC

As you may be aware, effective September 1, 2020 MSU is implementing a temporary wage reduction for non-unionized faculty and academic staff.  Executive management are also under a temporary wage reduction, following the same graduated scale as non-unionized faculty and academic staff, which was effective July 1, 2020.  The reduction will be in effect for at least one year (September 1, 2020 – August 31, 2021).  Because the reduction is temporary, the KC budget module will pull in base salary amounts that do not include the reduction.  This will allow for more accurate budgeting when the project period is longer than one year. 

Tips on Budgeting for the Temporary Wage Reduction

NOTE: The below tips provide a framework for budgeting the temporary wage reduction, however, they should not be seen as a requirement.  Some sponsors may ask for more exact budgeting and therefore would need more precision in the calculations.  Please note the distinction between Project Period and Budget Period within the scenarios below.

• Total Project Period ends before 8/31/2021 – The Base Salary field for anyone impacted by the temporary wage reduction should be manually adjusted to the reduced rate and inflation should be removed. 
• More than half of the Total Project Period is during the timeframe with the temporary wage reduction (e.g. 1/1/2021 – 12/31/2021) – The Base Salary field for anyone impacted by the temporary wage reduction should be manually adjusted to the reduced rate.  Leave the system default to apply inflation checked.
• Less than half of the Total Project Period is during the timeframe with the temporary wage reduction (e.g. 6/1/2021 – 5/31/2022) – Do not adjust the Base Salary field.  Depending on how close the Project Period start date is to the end of the temporary wage reduction date (8/31/2021), you may or may not want to apply inflation. 
• More than half of the first year Budget Period is during the timeframe with the temporary wage reduction (e.g. 1^st year Budget Period is 1/1/2021-12/31/2021; Total Project Period is 1/1/2021 – 12/31/2023) – Do not adjust the Base Salary field.  Uncheck the Apply Inflation checkbox in the first budget period only.  If you are working with a sponsor that will cut inflation at the award stage you may want to leave the Apply Inflation checkbox checked in the first year.
• Less than half of the first year Budget Period is during the timeframe with the temporary wage reduction (e.g. 1^st year Budget Period is 6/1/2021 – 5/31/2022 Total Project Period is 6/1/2021 – 5/31/2026) – Do not adjust the Base Salary field.  Leave the system default to apply inflation checked.

Resources:

• HR wage and retirement reduction information: https://hr.msu.edu/news_feeds/fas-reductions.html
• HR wage reduction scale: https://msu.edu/together-we-will/_assets/pdfs/FAS-Wage-Reduction-Scale.pdf
• Instructions on unchecking the Apply Inflation checkbox in KC: https://osp.msu.edu/PL/Portal/714/Issue16KCSystemImplementationUpdate92917#inflationCalc
• Video instructions on budgeting personnel in KC: https://mediaspace.msu.edu/media/Budgeting+Personnel+in+Kauli+Coeus/1_28x4xseh

If you have any questions on how to budget for the temporary wage reduction in KC, please contact the KC Helpdesk or your OSP Proposal Team.