Contact

Employee and Labor Relations

Fax
319-353-2384
Campus Address
121-20 USB
Mailing Address

121 University Services Building, Suite 20
Iowa City, IA 52242-1911
United States

Employee Fact Sheet

Lump Sum Payment Calculator (xls)

The Lump Sum Payment Option is an alternative that may be offered at the department's discretion to furloughed career status Professional and Scientific (P&S) staff with at least one year of service in their current career status.

This option provides a shorter notice period (90 calendar days) in lieu normal notice periods with a lump sum payout at the end of the 90-day notice. Departments can award this option at their discretion—see policy and eligibility guidelines below.

Normal Notice Periods

P&S staff with career status who are furloughed normally are provided furlough notice periods for specific periods of time based upon the number of years they have been in career status.

  • Less than 4 years in career status: 6-month notice period
  • 4-8 years in career status: 9-month notice period
  • More than 8 years in career status: 12-month notice period

The Lump Sum Payment option establishes a 90-day notice period with a lump sum payout at the end of the 90-day notice.

Furlough Lump Sum Payment Option

  • The lump sum payment option is offered at the discretion of the department upon approval by Compensation & Classification.
  • If a staff person accepts the lump sum payment option, a 90-calendar day notice period begins from the date of the furlough notification letter, in lieu of the notice periods listed above.
  • Similar to the normal furlough process during which a staff person remains employed during the furlough notification period, they also will continue to receive priority consideration for vacant P&S non-organized positions during the 90-calendar-day notice period, and for 12 months following termination per the University Operations Manual.

Staff Eligibility

  • Staff must have at least one year of employment in career status.
  • The staff person has received a furlough 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 furlough notification letter.

Furlough Lump Sum Payment Paid

At the end of the required 90-calendar day notice period, if the staff person has not secured a regular full-time position or has not declined a position for which they were qualified, they will be paid a lump sum amount in accordance with the following:

  • Less than 1 full year in career status: Not eligible for the furlough lump sum payment option
  • 1 full year but less than 2 years in career status: 1 week's pay multiplied by the actual number of years in career status
  • 2 full years but less than 3 years in career status: 2 week's pay multiplied by the actual number of years in career status
  • 3 full years but less than 4 years in career status: 3 week's pay multiplied by the actual number of years in career status
  • 4 full years or more in career status: 4 week's pay multiplied by the actual number of years in career status; maximum equivalent is 26 weeks of pay

Lump Sum Relinquished

Staff who secure a regular full-time position during the 90-calendar day notice period or terminate employment from the university for any reason prior to the end of the 90-calendar day notice period will not receive the lump sum payment.

COBRA Contribution

In addition, if a staff person accepts the lump sum payment option, the university continues its normal contribution for health insurance for the staff person only towards COBRA coverage for twelve months following termination. Funds for both the lump sum payment and the COBRA payment come from the Central Fringe Benefit Pool.

Departmental Considerations

  • In order to offer this option, departments must work through their senior HR representative to seek approval from Consuelo Garcia, Compensation and Classification. 
  • Departmental furlough notification letters offering a furlough lump sum payment option must clearly list that option. Departments wanting to offer a furlough lump sum payment option after the initial furlough notification letter is issued, will be required to resubmit a new Reduction in Force plan and a revised draft furlough notification letter indicating new notification dates and the furlough lump sum payment option.
  • The furlough lump sum payment option may be revoked at any time during the 90-calendar day notice period upon agreement by both parties.
  • The department should consider the period of time needed for coverage of the staff person's duties if the staff person accepts the furlough lump sum payment option.
  • Departments should also be cognizant of actual or perceived differential treatment when deciding to offer the furlough lump sum payment option to various staff over time.

Staff Decision and Default

Staff have 21 days from the date of the furlough notification letter to respond with a decision. If they not respond within the 21 days, the default falls to the normal furlough process.

Staff Considerations

  • If staff secure regular full-time positions during the 90-calendar day notice period or terminate employment from the university for any reason prior to the end of the 90-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 90-calendar day notice period provides a shorter window for priority consideration of vacant P&S non-organized positions than do the 6-, 9-, or 12-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 wall as their original benefit date affecting retirement, disability, and dental insurance.
  • If staff return to a position with career status within 12 months of termination, they may request to retain their original career status date per the University Operations Manual. The hiring department will have final decision.
  • The lump sum payment option may be revoked at any time during the 90-calendar day notice period upon agreement by both parties.
  • In the event that a staff person's position is eliminated more than once during university employment, the staff person may elect the lump sum payment option no more than once in a 12-month period, and no more than twice during their total university employment.

Revocability

The lump sum payment option may be revoked at any time during the 90-calendar day notice period upon agreement by both parties.

Restriction on Use

In the event that a staff person’s position is eliminated more than once during their university employment, the staff person may elect the lump sum payment option no more than once in a 12-month period, and no more than twice during their total university employment.

Processing Payment

Once the department has received a signed copy of the lump sum payment option agreement, the department will enter a Special Compensation Prior Approval in the HR Transaction system. The department will need to select special compensation type P&S Lump Sum Furlough Payment. The dollar amount of the lump sum payment should be listed under Special Compensation to be Paid.