UK announces start of low operational activity/administrative no-pay plan to address budget challenges

UK, budget, COVID-19
University of Kentucky campus. Mark Cornelison | UK Photo.

LEXINGTON, Ky. — University of Kentucky officials on Thursday announced low operational activity/administrative no-pay status for approximately 1,700 employees as part of the first phase of a plan to address significant budgetary challenges confronting both the academic campus and UK HealthCare.

Here are the details of the announcement made today in a campus communication from UK President Eli Capilouto:

  • Approximately 1,500 of the full- and part-time employees work at UK HealthCare across the health care enterprise. Low operational activity/administrative no-pay status there will begin April 26.
  • Another 200 employees will be placed on low operational activity/administrative no-pay status from UK’s dental clinics, which have been suspended in response to COVID-19, as well as dining and transportation services. One unit — the Hilary J. Boone Center, a campus dining and events facility — is being closed, resulting in a reduction in force affecting seven people.

Capilouto said additional low operational activity/administrative no-pay status may be necessary in the coming weeks in other units where work has been reduced because of the ongoing measures being taken to protect the community in response to COVID-19.

“Our hope is to have those impacted community members rejoin our work as soon as possible. We are making these decisions — and others like them, if we have to — thoughtfully and compassionately, as we seek to protect the institution and its capacity to serve for the long term,” Capilouto said. “We will communicate with all those impacted — and our entire community — transparently at each step of the way.”

At UK HealthCare, some employees may be low operational activity/administrative no-pay status for as little as a week; others may, unfortunately, need to be in that status for up to 10 weeks through July 4, said Dr. Mark Newman, UK’s executive vice president for health affairs.

UK HealthCare has spent some $20 million preparing for COVID-19 in the last several weeks, including the creation of drive-through testing, a robust tele-health initiative and the conducting of more than 3,000 coronavirus tests thus far, among a number of other measures.

However, as a result of suspending elective surgeries and procedures for the last several weeks to prepare for more virus-related patients, outpatient volumes at UK HealthCare were down 45% percent in April; inpatient visits for April are down 34%, Newman said.

“These were necessary and vital actions to heal and help across the Commonwealth, but the result is that work in many valued units has virtually halted,” Newman said. “Our first priority, always, is to protect our patients and our people. We have done that. But part of ensuring that priority long term is protecting our financial future as well. These measures are designed to help position for the future as we emerge from this public health crisis.”

Across all these units — both on the campus and at UK HealthCare — the low operational activity/administrative no-pay status is the result of work activity significantly decreasing, without the real capacity to work remotely to perform the normal functions involved in those jobs, UK officials said.

Other details of the plan, include:

  • After April 25, employees impacted may elect to use accrued vacation, holiday or bonus leave.
  • When those are exhausted, they may transition to low administration activity, no-pay status. They will be eligible to apply for unemployment.
  • If an employee is in administrative no-pay status for a full pay period, UK/UKHC will pay both the employer and employee portion of health benefits premiums for up to 90 days or until the employee returns to work. Sick and vacation time will continue to accrue.
  • UK and/or UK HealthCare officials will continue during the low operational activity/administrative no-pay period to look for areas of work that can be performed to bring employees back as soon as possible.

“The best way we can preserve jobs and our community for the future is to make these steps today,” Capilouto said.

Earlier this week, UK officials announced a more than $70 million shortfall — apart from UK HealthCare’s challenge — for the upcoming budget year, which begins July 1.

The shortfall is the result of a number of factors, including expected challenges with enrollment; declines in investment income and commitments that include increases in starting wages; additional investments in areas such as mental health counseling; as well as no increases in health premiums or parking rates in 2020-2021.