Harvard Extends Pay and Benefits to Employees Amid Estimated $415 Million Shortfall

Harvard will extend guaranteed pay and benefits to directly employed staff and contract workers through June 28 as it faces a $415 million shortfall this fiscal year, Harvard Executive Vice President Katherine N. Lapp wrote in an email to Harvard faculty and staff Tuesday morning.

“We previously announced a financial commitment that we would guarantee pay and benefits through May 28th to our directly employed staff and contract workers, including those who provide dining, custodial, and security services, who are able to work, but experienced the disruption of idle work since the decision to reduce the population living on campus,” Lapp wrote. “Today, I want to share that we have decided to extend that guarantee of pay and benefits to those workers covered under this May 28th policy for an additional month, until June 28th.”

On March 27, Harvard guaranteed it would pay employees through May 28 who are able to work but unable to perform their regular duties due to the outbreak. The policy covers all Harvard employees including full-time, part-time, and contracted workers.

However, the policy does not extend to workers in the dining halls continuing to serve students, whose jobs still involve coming to work. Forty-three dining hall workers chose to take sick or personal leave because they are part of a high-risk group for COVID-19 or living with at-risk individuals.

The University has not been spared from the economic impact of the global pandemic, Lapp wrote — Harvard estimates it will lose $415 million this fiscal year. The University is also projecting a $750 million revenue shortfall for the fiscal year 2021, which begins July 1.

“This figure includes, among other things, refunding room and board for the last half of the semester and providing moving, travel, and other financial assistance to students who were required to depart campus,” Lapp wrote. “ It also includes the necessary step of cancelling in-person Continuing and Executive Education courses and programs, and the loss of funding from federal and non-federal sources due to the closure of labs.”

As a way to address these unprecedented costs, University President Lawrence S. Bacow announced a University-wide hiring freeze, salary freeze, deferring or cancelling discretionary spending, a review of capital projects, and voluntary salary reductions for top University administrators on April 13.

“As we stated last month, given the magnitude of the financial losses the University has sustained and the projected loss of revenues, it is clear that additional cost saving measures will be needed in the coming months including the possibility of furloughs and layoffs of some members of our workforce,” Lapp wrote.

She added that whether Harvard will pursue furloughs, layoffs, and other cost-saving measures still remains unclear.

“We are trying to understand the extent to which some of our revenue loss is temporary versus permanent,” Lapp wrote. “While we have some capacity to absorb temporary losses, we must take the necessary steps in some areas to adjust to what is likely to be a new normal.”

—Staff writer Michelle G. Kurilla can be reached at michelle.kurilla@thecrimson.com. Follow her on Twitter @MichelleKurilla.