Bill introduced to allow universities to fire employees for 'financial reasons'

Monica Kast, Lexington Herald-Leader on Feb 10, 2026

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LEXINGTON, Ky. — A new bill that would allow university employees to be removed for financial reasons passed out of a Kentucky House subcommittee on Tuesday morning.

House Bill 490 would add provisions to state law allowing universities to remove employees for “bona fide financial reasons,” including financial exigency, low enrollment in an academic program, and “misalignment of revenue and costs” in a program. Critics of the bill say it’s another attack on tenure, a year after the Kentucky Legislature passed a law implementing a new performance evaluation system for university employees.

“House Bill 490 is a fiscal responsibility bill that allows university boards to make sound financial choices related to decisions about faculty removal for financial reasons,” said Rep. Aaron Thompson, R-Russell, a sponsor of the bill.

University boards would establish a process for removing employees for financial reasons, which would go into effect by July 1 of this year if the bill becomes law.

When asked if there was a specific incident that prompted filing this bill, Thompson said it was to have a consistent policy across all state universities and the Kentucky Community and Technical College System.

United Campus Workers, the union for Kentucky university employees, spoke out against the bill last month, saying “further weakening faculty tenure undermines the core mission of our public universities.”

“When faculty can be removed for shifting financial reasons, academic freedom is chilled, shared governance is sidelined, and decisions about education are driven by cost-cutting rather than student learning,” UCW said in a statement. “This approach will only harm student and worker outcomes on campus and lead to the further corporatization of our universities.”

Last year, House Bill 424 became law, which some university employees also said threatened tenure promotion and the jobs of tenured faculty. That bill gave schools the ability to fire employees who fail to meet “performance and productivity” standards.