COMMONWEALTH of VIRGINIA
Department of Education

August 20, 2010

TO: Division Superintendents

FROM: Patricia I. Wright, Superintendent of Public Instruction

SUBJECT: Temporary Furloughs Due to Budgetary Constraints

The Virginia Department of Education (VDOE) and the Virginia Retirement System (VRS) have collaborated to provide guidance regarding temporary furloughs due to a financial exigency (i.e., budget constraints). The unprecedented financial hardships that local governments and school boards are facing have made it necessary for some localities to implement furloughs (i.e., temporary and involuntary leaves of absence without pay).  As local boards have considered this budget reduction strategy, questions have been raised about the interpretation of the Board of Education’s Regulations Governing the Employment of Professional Personnel (8 VAC 20-440, et seq.) and the number of contractual days required for teachers. Questions also have been posed about the impact of such actions on an employee’s VRS benefits.

A school board may implement temporary furloughs affecting its employees, including instructional personnel, if there are financial exigencies requiring budget reductions to be put into place after the fiscal year budget is officially adopted by the appropriating local governing body. The financial exigency is such that there are insufficient funds for the school board to meet its obligations. This is consistent with language in the appendix to the Board of Education’s Regulations Governing the Employment of Professional Personnel (8 VAC 20-440, et seq.) stating that the school board shall not be obligated to the salary terms unless and until sufficient funds are approved by the appropriating body.

Board of Education’s Regulations Governing the Employment of Professional Personnel, 8 VAC 20-440-160:1 Appendix A – The Annual Form Contract with Professional Personnel:

14. The school board shall not be obligated to the salary terms above unless and until sufficient funds are provided to fulfill the obligations of the school board by the appropriating body; provided, further, that the school board shall give the employee written notice of such approval or disapproval, as the case may be, within seven (7) days of such action.

 8 VAC 20-440-160:1 Appendix A – The Continuing Form Contract with Professional Personnel:

3. During the term of this contract, the school board agrees to pay the employee an annual salary consistent with provisions of state law, plus any additional salary, but not less than the local scale, as may be determined by the school board in the local salary schedule as duly adopted from time to time; provided, however, that the school board shall not be obligated hereunder unless and until sufficient funds to meet the obligations of the school board hereunder have been approved by the appropriating body; provided, further, that the school board shall give the employee written notice of such approval or disapproval, as the case may be, within seven (7) days of such action.

A temporary furlough may not extend longer than one contract year.  Furloughs imposed on teachers may not exceed 10 days total during a contract year.  The Board’s regulations provide, in 8 VAC 8-440-20.3, that up to 10 days of the 10-month, 200-day contract may be for “activities as may be assigned or approved by the local school board”.

Board of Education’s Regulations Governing the Employment of Professional Personnel (8 VAC 20-440-20:1-3)
The local school board shall define the length of the contract period for each employee.  A 10-month contractual period is defined to include 200 days as follows:

1. One hundred and eighty teaching days or 990 instructional hours (minimum required by law)
2. Ten days for activities such as teaching, planning for the opening of school, evaluation, completing records and reports incident to the closing of each semester or school year, committee assignments, and conferences
3. Ten days for a continuation of activities under subdivisions 1 and 2 of this section, and such other activities as may be assigned or approved by the local school board

If temporary furloughs are imposed, the school division should not adjust the required contributions to the Virginia Retirement System (including group insurance contributions).  Employees’ service credit and salary information reported to the Virginia Retirement System may not be adjusted for the unpaid furlough time.  This will ensure that an employee’s average creditable compensation for retirement and life insurance benefits will not be adversely affected and ensures that VRS receives the requisite contributions to fund these benefits.

In summary, the Virginia Department of Education interprets 8VAC20-440-20.3 and the sufficient funds provision in the appendix of these regulations as permitting local school boards to furlough teachers up to 10 days during a contract year due to financial exigency with a proportional reduction in salary. The VRS will consider furloughs due to financial exigency as temporary. The affected employee’s average creditable compensation for retirement benefits, life insurance coverage, and contributions to VRS will be based on the employee’s permanent salary and not the reduced compensation.

If you have questions regarding Virginia retirement contributions and benefits, please contact Susan Keith, employer representative program manager, Virginia Retirement System, at (804) 344-3156 or SKeith@varetire.org.  Questions regarding the Board of Education regulations governing professional personnel may be referred to Patty S. Pitts, assistant superintendent for teacher education and licensure, Virginia Department of Education, at (804) 371-2522 or Patty.Pitts@doe.virginia.gov.

PIW/psp