March 20, 2006

Dear Colleague,

I have some important news to share with you.

Last week, the work group I appointed to study wages and insurance benefits of the employees of outside service contractors completed their analysis of the local market and presented their findings to me.

Their conclusions were that some of our outside service contractors were paying hourly wages that were below market, that service contractors were having difficulty recruiting and retaining qualified employees due to low entry wages and minimal annual increases, and that some of the service contractors did not offer low-cost health insurance.

The work group’s findings made it clear that the University needed to take immediate steps to address wages and health insurance for hourly employees working for our outside service contractors.

I am pleased to report that, effective last Thursday, the University adopted and implemented a new policy that sets minimum standards for service contractors doing business on the University’s campuses. The primary components of the new policy are as follows:

• Effective immediately, the minimum hourly wage for all employees of outside service contractors is $8.00 per hour. Housekeepers, who previously had a starting hourly wage of $6.40, now have a minimum starting hourly wage of $8.55. Groundskeepers, who previously had a starting hourly wage of $6.40, now have a minimum starting hourly wage of $9.30.
  
• University service contractors are expected to recognize performance and length of service in their pay scales. Many current hourly employees are seeing additional increases that put their pay above the new minimums, based on their total years of service. The University will review wage rates annually and update the minimum standards of the policy consistent with changes in market conditions.
  
• All service contractors are expected to offer health insurance to all of their employees, keeping monthly premiums low in order to encourage high participation by the employees. Contractors are expected to implement the health insurance within a month, which allows a reasonable time to negotiate physician contracts and conduct enrollment activities.

We are very satisfied that this new University program establishes a wage and benefit level that is near the top of the market. The new policy is already in effect, and hourly contract employees are now receiving increased wages. Most hourly contract employees received their pay increases in their paychecks yesterday, and the rest will receive their increases in paychecks this week — all retroactive to last Thursday.

I requested this study as a response to the outpouring of sentiment from our community — students, faculty, staff, alumni, trustees, donors, and the clergy. We adopted the new policy because the data and analysis clearly indicated a change was in order, but more importantly, it was the right thing to do. Universities should always lead the way, and providing fair wages and health insurance is a necessity.

It is also important to point out that the University’s position on the labor dispute has not changed. The University remains neutral and is not a party to those discussions. That is an issue to be decided between UNICCO, its employees, and the union.

Finally, I want to assure you that there will be no increase in tuition next year to cover the cost of this new program. Tuition is already high, and we intend to honor all published rates for the next academic year.

I appreciate your input on this issue during the past few weeks. And I know that you support our decision to provide increased wages and health insurance for the hourly employees of our service contractors. I hope that over the next few weeks the union, the employees, and UNICCO can resolve the issue of representation. We need to respect the process.

Best wishes,

Donna E. Shalala
President