Some LSU employees to lose state benefits after transfer to staffing agency

Clouds pass over Tiger Stadium on Monday, March 20, 2023, on LSU’s campus in Baton Rouge, La. (Matthew Perschall for Louisiana Illuminator)

More than 500 people who work for LSU, including 165 faculty members, will become employees of a private staffing company. Of those, 50 are full-time employees who will lose state benefits.

By the end of the year, 546 employees who the university had previously employed directly will work instead for nextSource , a staffing agency based in New York. The company will take on legal responsibility for the employees, who will continue to work for LSU. The university has contracted with nextSource since 2022, and the arrangement only impacts employees who work from out of state. Some employees have already been transferred to the agency, with 50 more converting at the end of the year.

LSU spokesperson Zach Labbé said the university entered into the partnership because of “compliance risks” involved with employing out-of-state workers. LSU has also begun hiring all new out-of-state workers as nextSource employees.

165 of the employees are non-tenure track faculty, Labbé said.

Employees contacted for this story declined to speak on the record, saying they feared retaliation involving their jobs.

LSU will still be involved in any disciplinary action involving the workers, who the university will consider “nextSource associates.”  The university will pay the staffing firm a 22% administrative rate for each employee based on their salary.

“ nextSource associates on assignment with LSU are still expected to observe the policies and guidelines set forth by the university,” Labbé said. “As such, should a student bring forward any complaint or concern against a nextSource associate, LSU and nextSource will investigate and address accordingly.”

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As the employees no longer work for the university, they no longer qualify for LSU benefits, including its health care plan, state retirement benefits and a student loan forgiveness program for employees who’ve worked for government or nonprofits for 10 years.

In a March virtual town hall meeting for affected employees, several raised concerns about the loss of benefits and indicated it would make them reconsider remaining in their jobs.

Transferred employees enrolled in state pension plans, but not yet vested, can request a refund from the state retirement systems. They will also lose access to LSU tuition exemptions.

Health insurance and a 401(k) retirement plan will be available from nextSource.

Because the transferred employees are classified as new employees, they will not qualify for health insurance until 60 days after their official start date with nextSource. LSU is giving them the option to pre-pay their premiums before the end of the year to keep their LSU insurance before their new insurance kicks in.

Correction: A previous version of this story state hundreds of LSU workers will lose state benefits. After publication, LSU reached out with more information and shared that 50 employees will lose state benefits, with the other workers either being part-time employees or new full-time hires who never had state benefits.

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