This option provides the lump sum payment equivalent to three months’ salary in lieu of a shorter notice period (45 calendar days). The lump sum payment is made at the end of the 45-day notice.

Departments may offer this option at their discretion—see policy and eligibility guidelines below.

Normal Notice Periods

P&S staff who are laid off are provided layoff notice periods based on P&S status and the number of years in regular continuous employment.

• At-Will Staff
  • 3-month notice period
• Probationary, Specified Term and Career Staff
  • 3-month notice during first year of employment
  • 6-month notice thereafter

Layoff Lump Sum Payment Option

• The lump sum payment option is offered at the discretion of the department subject to approval by Compensation & Classification.
• The amount of the lump sum payment is equivalent three (3) months’ salary.
• If a staff person accepts the lump sum payment option, a 45-calendar day notice period begins from the date of the layoff notification letter, in lieu of the notice periods listed above.
• Similar to the normal layoff process during which a staff person remains employed during the layoff notification period, they also will continue to receive priority consideration for vacant P&S non-organized positions during the 45-calendar-day notice period, and for 12 months following termination per the University Policy Manual.

Eligibility for the Lump Sum Option

• All P&S laid-off staff are eligible for Lump Sum Option program.
• The staff person has received a layoff notification letter stating the elimination of their position for reasons other than cause, and the department has offered the lump sum payment as an option in the layoff notification letter.

Payment of the Lump Sum

Employees who are offered and accept the Lump Sum Payment option will be issued the payment at the end of the 45-calendar day notice period, subject to the following limitations:

• The staff member must not have secured a different regular position for which they were qualified.
• The staff member must not have terminated employment with the University for any reason.

Lump Sum Relinquished

As indicated above, staff who secure a regular full-time position during the 45-calendar day notice period or terminate employment from the university for any reason prior to the end of the 45-calendar day notice period will not receive the lump sum payment.

COBRA Contribution

In addition, if the staff member accepts the lump sum payment option, and they are enrolled in university health insurance at the time of their separation, the employee may elect COBRA and the University continues its normal contribution toward the cost of single health insurance for twelve months following termination. [SDM1] An additional 6 months of COBRA coverage is available after the initial 12 months of coverage, but the employee becomes responsible for the full cost.  Coverage automatically continues for the additional 6 months and premiums will be charged to the employee unless the employee requests that coverage be discontinued by contacting the University Benefits office. If the staff member is age 55 or older, they may elect to take the lump sum and retire from the university. This allows them the ability to continue their University health and/or dental insurance coverage for themselves and their eligible dependents at their own expense.   (This option is not available if the staff member initially elects COBRA). Funds for both the lump sum payment and the COBRA payment come from the Central Fringe Benefit Pool.

Departmental Considerations

When considering whether to make a lump sum offer, departments should consider the following factors:

• In order to offer this option, departments must work through their senior HR representative to seek approval from Compensation and Classification. 
• Departmental layoff notification letters offering a lump sum payment option must clearly list that option. Departments wanting to offer a lump sum payment option after the initial layoff notification letter is issued will be required to resubmit a new Reduction in Force plan and a revised draft layoff notification letter indicating new notification dates and the lump sum payment option.
• The lump sum payment option may be revoked at any time during the 45-calendar day notice period upon agreement by both parties.
• The department should consider the time needed for coverage of the staff person's duties if the staff person accepts the lump sum payment option.
• Departments should also be cognizant of actual or perceived differential treatment when deciding to offer the lump sum payment option to various staff over time.

Staff Decision and Default

Staff have 21 calendar days from the date of the layoff notification letter to respond with a decision. If they do not respond within the 21 days, the university will conclude that the staff member has declined the lump sum option. In such instances, the university will implement the normal layoff process.

Staff Considerations

When considering whether to accept a lump sum offer, staff should consider the following factors:

• If staff secure regular full-time positions during the 45-calendar day notice period or terminate employment from the university for any reason prior to the end of the 45-calendar day notice period, the lump sum payment will not be paid.
• Staff will have slightly smaller vacation accruals available for payout than they would with longer notice periods, since the accruals end sooner. Furthermore, while vacation payouts are taxed at the earnings rate, lump sum payments are taxed at a flat rate. This could result in a tax liability when filing annual taxes.
• The 45-calendar day notice period provides a shorter window for priority consideration of vacant P&S non-organized positions than do the 3 or 6-month notice periods, meaning successful placement is less likely prior to termination. Staff will continue to have 12 months from the date of termination to exercise priority consideration for vacant P&S non-organized positions.
• If staff return to university employment within 12 months of termination, they retain their original employment date for purposes of parking priority and record of service with the university, as well as their original benefit dates affecting retirement, disability, and dental insurance.
• The lump sum payment option may be revoked at any time during the 45-calendar day notice period upon agreement by both parties.

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