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Statement from President Casteen to Students Regarding Compensation for Contract Employees

April 12, 2006

This is to acknowledge the statement distributed this morning when you occupied Madison Hall's lobby, and to provide additional information for you. I am attaching a letter (originally restricted as Attorney-Client Privileged Advice) addressed to Mr. Sandridge. We understand that an official opinion similar or identical to this letter is forthcoming. We have permission to disclose the attached letter to you. If the eventual official letter differs in any respect from this advisory letter, we will post it on the web.

The operative part of your statement is this sentence: "President Casteen has the authority to ensure that all University employees, direct and contracted, are paid a living wage."

This letter addresses issues relevant to a statement you distributed this morning.
  • First, it finds that the University has no authority to determine the wages paid to employees of contractors, and it cites the specific sections of law and legal precedents relevant to this matter. Your assertions that this authority exists include no similar citations of law or precedent.
  • Second, it speaks properly of powers vested by law in the University's Board, not in its president -- a distinction that your statement neglects to mention. My authorities are described in law and in policies of the Board of Visitors, and they include neither of the capacities you have attributed to me.
  • Third, it rejects the argument that controlling salaries paid by contractors is a "best value" practice, and it cites specific Code language relevant to your arguments on this matter.
  • Fourth, it rejects your assertion that powers claimed by the tiny number of Virginia localities that have adopted "living wage" methodologies for determining wages belong also to the University, and it finds that these localities have in fact acted beyond their lawful powers.

The letter does not speak to the matter of wages paid to those persons you have described as "direct" employees. We study wage schedules regularly in the context of the local wage market and the cost of living in this region, and we make adjustments when they are justified, as we did earlier this spring. We do not double-count, as you do by including health costs in your base computation of what you have called a "living wage" and then trying to exclude the University's direct payments for health costs in the form of health insurance provided in addition to wages -- expenditures counted in their computation of the living wage by various localities whose wage policies you have praised.

Our lowest hourly wage rate ($9.37) is slightly higher than the lowest hourly wage paid by the City of Charlottesville, whose wage practices you have applauded. Our rate is dramatically higher than the state's lowest wage rate of $6.83 per hour.

We believe that our schedules are fair, that they do not constitute what you have represented to the public as poverty wages, and that they represent the highest comparable wage schedules in this region, including those paid by the City of Charlottesville.

I will provide copies of this document and of the attached letter to the University's Board and to the media, and we will post both on the University's web pages. When the Board next meets, Mr. Sandridge or I will present these matters to the Board along with the recommendation that the University continue its regular studies of the local labor market, that it make every effort to continue providing competitive compensation for all of its employees, with special attention to salary sufficiency in the lower wage grades, and that it provide for us any additional or new policy guidance that it may choose to provide in the context of the issues you have raised.

Persons who have followed the arguments you have made this spring will perhaps want advice on available next steps. Options exist, and they do not require misrepresenting the law or pretending expertise that one does not have. Virginia's laws are enacted by elected legislators who hear regularly from citizens who express their views on public matters. I have offered to introduce members of your group to legislators who have experience with and knowledge of labor law as it exists in this state. You can build similar relationships without my assistance if you wish. Contact information for all members of the General Assembly appears on pages linked to http://legis.state.va.us/. In addition, lawsuits are filed every day.

John T. Casteen III, President
University of Virginia

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