FASA Guidance for Responding to MSU Budget Reductions

May 19, 2025

Please note that units should not take any actions until their budget reduction proposals have been reviewed and approved—the below is for planning purposes only.

This guidance is intended to support deans and unit administrators in navigating recently announced budget cuts and potential reductions in force (RIF) for faculty and academic staff appointments. This document serves as a general overview and should be used in consultation with the Office for Faculty and Academic Staff Affairs (FASA), which will review and approve employment actions, and the Office of Health Sciences HR (when applicable).

Reductions in personnel should be carefully considered and must follow all applicable university policies, union contracts and legal guidelines. Please contact your unit’s FASA director for questions or clarifications and before proceeding with any of the below.

This document does not pertain to RIF for support staff. For questions related to support staff, please contact Employee and Labor Relations at 517-353-5510 or email hr.er@hr.msu.edu.

Before initiating position eliminations or non-renewals, consider the following options:

• Hiring Freeze: Pause on filling vacant positions unless deemed mission critical. Develop a matrix to determine what types of positions are mission critical and how they will be prioritized. Sharing this type of information creates trust and transparency in the process.

• Review of Positions in the Hiring Pipeline: Assess whether positions currently in recruitment stages can be delayed, modified or canceled.

• Convert AN Appointment to AY Appointment (for academic specialists – continuing, tenure-system faculty and librarians): The university’s basic employment commitment to faculty and academic staff is an Academic Year (AY) appointment. Annual Year (AN) appointments must be justified by programmatic needs and be related to that individual’s job responsibilities. However, the unit may change the faculty’s appointment from Annual Year (AN) to Academic Year (AY) if justified based on the unit’s need, including budgetary constraints. The AY salary is determined by deducting the administrative increment, if any, from the annual salary and computing an amount equal to 9/11 of the residual annual salary. If a faculty or academic staff appointment is converted from AN to AY, the unit also needs to ensure that the employee is not assigned regular duties during the non-duty period (May 16 through Aug. 15).

Consult FASA for the following:

• Consult FASA: Voluntary Reduction in Full-time Equivalent (FTE) percentage: Review the possibility of voluntary reductions in employment percentage (e.g., convert full-time positions to part-time where feasible, with employee input and appropriate documentation). If the FTE percentage is voluntarily reduced, the unit should also appropriately reduce the employees’ effort.

  • This should be reflected in a Memorandum of Understanding (MOU) with the unit and employee; before being shared with the employee, the MOU should be reviewed by your FASA director.

  • Employees should be directed to HR Benefits for questions regarding the impact on their benefits for voluntary reductions in FTE percentage.

  • Any reduction in FTE percentage as part of the budget reduction will be permanent.

• Consult FASA: Reassignments and/or Consolidation: Explore whether responsibilities can be reassigned within the unit or across units to reduce duplication and save costs. If duties are being reassigned to another employee, consider whether this increase in responsibilities warrants a title or pay change.

There may be situations where the reduction of personnel is necessary. If so, please keep the following in mind:

• Policy and Legal Compliance: Reductions in force must align with the laws, applicable university policies and collective bargaining agreements. Contact your unit HR representative and your unit’s FASA director. 

• Documentation: Maintain thorough documentation of decision-making rationale, ensuring consistency and transparency.

• Additional Procedures: For continuing appointment classification types (e.g., tenure and continuing) and unionized roles (e.g., Designation B), additional procedural steps may apply, including committee consultation or provost-level review.

• Timely Communication: Provide timely, written notice, clearly explaining the rationale, including the funding shortfall and any efforts to identify alternative solutions. Recognize that most positions require at least 60 days' notice (others require more) for RIF due to budgetary constraints. See the chart below for additional information and consult your unit’s FASA director with questions.

**Consult with FASA before initiating any reduction in personnel or reassignment of duties.

• Document Everything: Maintain clear records of all communications, funding updates, decisions and notifications.

• Notify Affected Individuals Promptly: Communicate as early as possible to reduce uncertainty.

• Coordinate with HR and FASA: They can ensure compliance with appointment policies and help avoid unintended issues (e.g., benefits gaps, visa implications, etc.)

• Office for Faculty and Academic Staff Affairs

• Contracts and Grants

• Office of Research and Innovation

• MSU Human Resources

• MSU Federal Transition Website

• Office of International Students and Scholars (OISS) Advising Team  

• OISS H-1B Employees Resource Page