Using Adjuncts, Off the Payroll

Michigan community college's discussion of arrangement with company that would allow institution to end contributions to state retirement fund for part-time faculty alarms advocates for those off the tenure track.
August 11, 2009

The way Kirtland Community College sees it, the idea is a win-win. But the idea -- taking adjuncts off the college's payroll and having them employed by a private company, which would not contribute to state retirement accounts -- is alarming activists for adjuncts.

And while Kirtland says that it wants only to use the outside company as the official employer, with the college retaining the role of recruiting and hiring adjuncts, the company has broader ambitions, including creating a pool of adjuncts from which colleges might get instructors without having to pay state benefits for any of them. The company -- which currently performs a similar service in placing substitute teachers at hundreds of Michigan school districts -- says it is in discussions with several community colleges in addition to Kirtland, but declined to name them.

Dale Shantz, director of human resources at Kirtland, said that no final decision has been made, but that there is strong interest in moving ahead and the college's board has had discussions about the concept. Here's how he said it would work:

The college would recruit and select adjuncts, and then pass the names on to the Professional Educational Services Group, which would hire these individuals and assign them to Kirtland. Kirtland would pay the company a fee of 14 percent of the pay of those adjuncts who are company employees but work at the college, and also the salaries themselves. The company would then be the employer of record, pay Social Security, withhold taxes and so forth. The key savings for the college is that Michigan requires payments of 16.94 percent of payroll (a high figure compared to other states) for employees' state retirement accounts. As soon as the adjuncts don't become employees of state agencies, that requirement goes away. In addition, the 3 percent that state employees must pay is also waived.

Shantz said that relatively few adjuncts stay at the college long enough to use their state retirement benefits later. Further, he said, those with at least four years' vesting in the system would continue to be college employees, so they wouldn't feel that "the rules had changed" after their employment started. He said that adjuncts would gain because they wouldn't have to pay the 3 percent into the state account.

The main reason for considering this idea, he said, is that it could yield "substantial savings." If the college did this for all of its adjuncts (it hires about 80 a semester), it would save well over $100,000 annually. Because some adjuncts with more years at the college won't be included, initial savings are more likely to be in the $50,000 range, but that would grow over time as some adjuncts retire and are replaced by adjuncts who were never employees of the college. Adjuncts at the college are not unionized, so this is a policy that Shantz said could be adopted without collective bargaining.

At the same time, Shantz said that there were potential downsides. He said he wasn't sure if this could hurt adjunct recruiting efforts, although he said that he believes the 3 percent gain could be key. "Anecdotally, we think that they would rather see an increase in their paychecks [than have that money] that they contribute into a fund they may not use." Asked if such a move might make adjuncts feel less valued and connected to the college, Shantz said that was "a concern." But he added that "our savings could enable us to hire another full-time faculty member or several more adjuncts."

Tom Quinn, president of the college, said that context was key to understanding the idea's attraction. The college will likely be facing "significant" budget cuts in the years ahead, and is already operating on a lean budget, given Michigan's poor economy. "My question is: What can we do to shift spending priorities," he said. "Everything is on the table."

Scott Van Lente, vice president for sales and marketing at PESG, as the company is known, said he sees growing interest from colleges in the services offered. "We create efficiencies and colleges are looking for efficiencies," he said. Van Lente predicted that there would be "a pool of well qualified adjuncts" that are created from Kirtland and other community colleges. While he said that Kirtland has not expressed interest in having the company create the pool, he thought other colleges would. "If they want to interview, that's fine, but many colleges feel that our hiring process is more in depth than their current hiring process."

Van Lente added that his company performs services -- outside of interviewing -- that most colleges don't do, such as requiring all the adjuncts hired to go through sexual harassment education, or conducting full criminal background checks on all of them. "The things we are doing are raising the bar," he said.

While PESG was founded in Michigan, it is moving into Indiana and Pennsylvania as well, he said.

While Kirtland and PESG see the logic of such arrangements, others do not.

Cary Nelson, national president of the American Association of University Professors, noted that one way adjuncts are trying to improve their economic well-being is by getting contributions to retirement funds. Many adjuncts work at multiple colleges, and so adding up various contributions to retirement funds can become -- over a period of years -- funds that may make a difference in retirement, even if the funds from any one college job may be small.

"It's important that colleges make contributions, however modest, for adjuncts' futures," he said. "Any effort to deny adjuncts their modest contributions in a retirement fund is so unethical that I would describe it as despicable," Nelson said. He added that he had never heard of another college taking this step.

Keith Hoeller, co-founder of the Washington State Part-Time Faculty Association, who has been involved in efforts to secure retirement benefits for adjuncts, said he saw several problems with the idea under consideration in Michigan. He said that such a switch will make it more difficult for adjuncts to organize unions and protect their rights. He said that what the college describes as savings is really just "shortchanging the salaries and benefits of the part-time faculty."

As for the financial issues cited by the college, Hoeller said: "It is unfortunate that so many administrative decisions regarding part-time faculty are driven by financial rather than academic considerations."


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