What's behind the substitute shortage

by Zach DiSchiano

It’s no secret that the vast shortage of substitute teachers is plaguing school districts, but the reason for the deficit is a question not many have been able to answer with certainty. 
There are many key contributing factors to the shortage, ranging from legislative issues to emotional concerns. Regardless of reason, the shortage is real—a recent survey of district administrators by STEDI.org stated that nearly 50 percent of its respondents said they are facing a “somewhat” or “very severe” shortage of substitutes. 
Like most large-scale issues, there is more than just one cause for the trouble districts are facing today. Explaining the reason behind the substitute shortage is like figuring out why Austin traffic is so bad or how smartphones can be so smart yet only last a year—there’s one primary reason and many other small factors that have brought about the crisis.

Economic factors

The improving economy and subsequent competitive job market have lured current and prospective substitute teachers in search of a consistent income away from the job. The national unemployment rate, currently resting comfortably at 4.9 percent, is at a decade low, compared to where it was just six years ago at 9.8 percent. Substitute teaching positions are filled largely by people who are trying to pick up extra work to make ends meet, and in today’s economy, the number of people falling into that category is lower than usual.  
When the economy was struggling in 2011, there was one substitute for every 3.22 teachers. As the economy has recovered and the unemployment rate has decreased, that ratio has dropped. Now, districts average one substitute for every 5.98 teachers. This change is nearly impossible to endure without some difficulties, and each district handles the issue in its own way. Along with demands such as in-district meetings and professional development training that take teachers out of the classroom, the results are a greater demand for more substitutes.

Legislative issues

The Affordable Care Act (ACA) has raised concern that new benefit requirements would have a negative impact on the number of substitutes working in districts. The ACA requires districts to offer health insurance to substitute teachers working 130 hours or more per month. Districts were concerned about the added premium cost for covering employees they previously did not have to include in their benefits package and penalties for not providing affordable coverage. While some districts chose to set a cap on the number of hours substitutes could work each month, most districts decided that their need for quality substitutes outweighs spending the additional money.  

Solving the problem

A common way to cope with daily sub shortage involves combining classrooms, which typically has an impact on productivity and student engagement. A more desirable strategy is to reduce the need for substitutes by scheduling professional development training for teachers outside the school day or school year, sometimes at additional expense for the district.  

Changing perceptions

Districts also face the challenge of creating a work environment where substitute teachers are welcomed and respected. It is not uncommon for substitute teachers to be perceived as mere babysitters by students and fellow teachers. Yet many subs boast résumés similar to full-time teachers so being viewed as less important or not really a part of the team can be discouraging. According to STEDI.org, 75 percent of substitute teachers have a bachelor’s degree or higher and 40 percent have permanent teaching license. Eighty-two percent plan to stay in education and identify flexibility and working with students as the top two reasons for being a sub.
For years, Hays CISD has been defying the notion that substitute teachers are any less important to their districts than full-time educators. Tricia Griffith, the substitute coordinator at Hays CISD, has worked to create an environment where subs are respected and viewed as an integral part of their district’s success. Her efforts have culminated in an impressive fill rate for substitute teaching positions at all levels. During the 2015–2016 school year, fill rates averaged out to more than 92 percent between elementary, middle, and high schools. 
Referring to them as “guest teachers,” Hays CISD virtually eliminates the word “sub” and consequently all of its connotations, negative or otherwise. Group Facebook and Twitter accounts allow for a sense of community and acknowledgement among the guest teachers and effectively establishes a sense of belonging in the district. 
Between increasing substitute retention and decreasing teacher absenteeism, districts can take a significant shot at remedying the shortage. Sure, if the economy was in worse condition, substitute teachers would likely be more bountiful. But who wants to endure another recession? Fortunately, there are other ways to solve this dilemma, and the districts who address this challenge with creative methods will be in prime position to find the substitutes they need. 

Looking ahead

Emerging ideas for tackling substitute shortages center on recruiting young talent. There is certainly no lack of compassionate kids with the desire to become great educators and change lives, but becoming a substitute teacher is just not commonly thought of as the profession to pursue. However, if the actual job of being a sub was fundamentally changed, as one writer proposes, so too could the perception of substitute teaching as a career. 
Nancy Flanagan of Education Week suggests that districts should modify the entire substitute process by offering willing temps hybrid positions that would essentially make them part of the campus team for an entire semester. This would allow subs to work in the same building every day and familiarize themselves with the students  and the culture of the district and individual campuses. The new job would be full time, and, in the long run, more individuals might envision this as a plausible career option to pursue. 
Some Texas districts that are continually in need of subs already use this strategy and employ full-time substitutes known as “roving subs.” These rovers often cover long-term assignments and provide better quality instruction for students. As part of the campus team, these individuals are able to overcome challenges identified by substitutes, principals, classroom teachers, and students—lack of support in addressing student behavior, being perceived as professionals, and providing stimulating lessons and exciting fill-in activities. 
The substitute shortage brings districts even more pressure to maintain high fill rates. To combat this, districts should continue working to address the recruitment and retention of subs in creative and resourceful ways. Using the same methods moving forward is not going to guarantee the same results generated in the past. Whether it is focusing on teacher absenteeism or rethinking the entire culture of substitute teaching in your district, trying new strategies may be the best way to reduce the effects of the shortage.


Leave reimbursement survey results: School district policy practices highlighted

By Troy Bryant

HR Services' February 2016 HR survey covered reimbursement of unused leave days by school employees, including eligibility, amounts, and limits. Employee leaves and absences practices and procedures are addressed in Policy DEC (LOCAL), including the five state leave days as required by the State of Texas, as well as any additional local leave days provided by districts.

Among responding Texas school districts, slightly more than half (52 percent) have a policy that provides for reimbursement of unused leave.
Eligibility for Reimbursement
In those districts that reimburse unused leave days, 89 percent (136 districts) indicated that all employees in the district are eligible. The other respondents (17 districts) make it available only to certain job groups (e.g., teachers). 
Employees are most commonly reimbursed for unused leave days only upon retirement (61 percent or 94 districts). Another 14 percent (21 districts) provide reimbursement for any type of resignation. One quarter (38 districts) reimburse employees annually for unused leave, according to the survey.
In terms of the type of days that are reimbursed, about half of districts (53 percent) reimburse local leave only. Twenty-nine percent reimburse local and state leave; eighteen percent limit it to state leave only.
Amount of Reimbursement
For the reimbursement of unused leave days, the amount districts pay varies. Most (77 percent) pay some type of standard rate (e.g., $50 per day). Other districts pay a reduced employee daily rate (16 percent) or a full daily rate (7 percent). Of respondents that reported paying a standard rate, about half of them (49 percent) pay $51 to $100 per day. Most other respondents (46 percent) pay $50 or less per day.
Finally, districts were asked about the limit they place on the total amount of reimbursement. According to the survey, districts typically limit the number of days reimbursed, total dollar amount paid, or both. One third reported that there is no limit on days or dollar amount.
TASB HR Services surveyed more than 900 public school member districts in February 2016. At the time of publication, 295 districts across all TEA-defined enrollment groupings participated in the survey. While the results of responses collected by February 2016 are reported here, HR Services member districts who have yet to participate can do so by visiting DataCentral and accessing the HR Data page. Member districts can take part in all of our surveys covering HR policies and procedures in school districts. Results are available upon completion of the survey.


Texas backgrounding system satisfactory but not without flaws

by Zach DiSchiano

With no federal involvement in teacher background checks, states must conduct screenings independently. Consequently, there is substantial variation in the quality of backgrounding systems across the country, and Texas—for now—ranks somewhere between prosaic and promising. 

The National Association of State Directors of Teacher Education and Certification (NASDTEC) is a non-profit organization that hosts the nation’s only centralized system for tracking teacher discipline—a database known as Clearinghouse. The Texas Education Agency (TEA) uses this system to report sanctions against teachers in the state and also to check educators against the database.

Teachers who have had their professional educator certificates annulled, denied, suspended, revoked, or otherwise invalidated are generally reported by states and other member jurisdictions into the database. Clearinghouse transfers that data into monthly reports and issues them to NASDTEC members who can then compare the information to their current lists of licensed educators and applicants for teaching positions. If a match occurs, the agency can contact the reporting jurisdiction to gain more information about the incident and to determine whether or not action is appropriate.

The database has flaws, however, that allow for educators with troubled pasts to teach again just by crossing state lines. The main issue arises with reporting inconsistencies across states. The system is only as good as the data submitted by state agencies, and that leaves substantial room for error.

Grading the system

A USA Today analysis of teacher background checks across the country found that Clearinghouse not only had missing entries, but misspellings and other inaccuracies that reduce the potential of how helpful the system can truly be. The report, assimilated by USA Today journalists, gave Texas a “B” grade after gathering information about how officials make sure information about misconduct is shared with schools, districts, and other states.

Below is a quick synopsis of USA Today’s analysis on the Texas teacher background system:
  • Background checks
    • Strong state-level screenings before licensing
  • Mandatory reporting laws
    • Strong mandatory reporting of teacher misconduct
  • Transparency
    • Some incomplete information online about teacher disciplinary actions
  • Sharing misconduct information
    • Many teachers’ misconduct not shared with other states
Overall, the Texas backgrounding system was ranked as slightly above average, but there is clear room for improvement in how transparent the state is about what misconduct was committed by teachers and how exactly they were disciplined for their behavior.

Texas solution

The state will soon become even more thorough in its screening, though, with the incipient introduction of the FBI’s Rap Back Service. The system will provide school districts with criminal history records of their employees that occurred outside the state of Texas after they are hired and their initial criminal records are processed.

The Texas Department of Public Safety (DPS) is waiting on final approval from the FBI, and once approval is received, the DPS will begin to incrementally roll out the program to ensure its success. After FBI Rap Back is introduced, districts can expect to receive updates to records within 24 to 48 hours of occurrence.

The addition of the Rap Back Service into the state’s arsenal of background checks is certain to strengthen Texas’ screening system and prevent more teachers from escaping their criminal history that was otherwise non-existent to concerning districts. While Clearinghouse’s issues with reporting are unlikely to change, the combination of that database with the FBI’s Rap Back Service make for a promising system.


Payroll and HR: Identifying responsibilities and working together

by Zach DiSchiano

Payroll and human resources are both vital units in a school district, but confusion and frustration can arise from lack of clarity in understanding which department can most effectively handle specific tasks.

In any district, the departments need to form a partnership that focuses on making sure employees are paid appropriately and in a timely fashion. HR’s part of the partnership is geared toward entering and updating employee records in the HR/payroll system, while payroll’s part is primarily focused on generating paychecks for employees that are accurate and complete.

The specific differences between what each department’s responsibilities are listed below:

Human resources

  • Provides expert leadership in determining what to pay
  • Determines gross pay
  • Provides leadership for design and implementation of the compensation plan including ensuring stipend schedules are clear, documented, and applied consistently across campuses and departments
  • Receives, reviews, and enters all stipend assignments (e.g., teaching, travel, extracurricular, and UIL)
  • Creates employee work calendars
  • Processes transactions to disburse and account for payroll funds
  • Determines net pay
  • Reconciles coding of salaries against master budget
  • Calculates pay-offs for assignment changes and early resignations or terminations
  • Processes pay according to days worked for assigned work calendar
Part of the cause for tension between payroll and human resources is an absence of appreciation for what the other side is doing. HR needs to understand the deadline pressure and lack of flexibility required to produce payroll, while payroll needs to understand that pay systems are designed to support the recruiting and retention needs of the district, and not necessarily to support payroll software applications.

Dividing up the responsibilities provides for checks and balances against fraud and errors, and neither department should be solely responsible for all pay activities. Working together eases the substantial amount of pressure on both departments and having each group’s responsibilities explicitly detailed allows for accountability and transparency on both ends.

Access to essential data systems should be divided between those screens that set up the amounts to pay individual employees and those screens that process fund expenditures for paychecks. This arrangement prevents payroll from making pay changes without authorization and prevents HR from accessing payroll funds. Additionally, errors are more likely to be noticed and caught by one side or the other.

Information that each group can access or edit are delineated below:

Human resources
  • Data entry screens for entering pay amounts
  • Enter demographic information, assignments, and gross pay amounts including base salary, stipends, and supplemental pay
  • Assign job title descriptors of all positions (e.g., job, title, class, and PEIMS codes)
  • Create new position and job codes and maintain job title descriptor standards
  • Should have view-only access to payroll screens
  • Set up and proof payroll fund expenditures by budget codes
  • Enter all deductions including insurance, taxes, wage garnishments, retirement deductions, and W2 information
  • Determine standard descriptors of all deduction codes
  • Check funding availability to ensure position is budgeted and funded
  • Should have view-only access to HR screens
Cohesiveness between the two departments is imperative to a district’s success. This can be done by ensuring each group’s responsibilities are specifically defined and that access to data systems is allowed or restricted accordingly. When both departments work together effectively, tension will be reduced and cooperative attitudes will flourish. 


Reducing the contagious effects of a low-performing employee

by Zach DiSchiano

You are an excellent teacher. You are dedicated to your work, and always show up with a positive attitude and a desire to make an impact on student lives. But one of your coworkers puts in half the amount of effort you do, takes as many days off as possible, and effectively decreases their workload while increasing yours. The worst part about it is the fact that your principal doesn’t seem to notice, or even worse—doesn’t seem to care. If your coworker can get away with underperforming without any consequences, why should you bother to spend the time and energy striving to be the best employee possible when you can be equally as lethargic without repercussions?

If this scenario sounds similar to something you have witnessed or directly experienced, trust that this is a common occurrence. TASB HR Services has received numerous comments in employee surveys regarding coworkers who take advantage of the system with their behavior seemingly going unaddressed by their principals or supervisors. Furthermore, employees are even more indignant when their boss fails to acknowledge what they do to pick up the slack left behind by their coworkers.

Negative impacts

A recent study conducted by Eagle Hill Consulting revealed that low performing employees negatively impact workplace culture and either spread their ineptitude to other coworkers or simply drive out the top performers.

Some of the key findings from the study include:
  • Low performers hurt workplace morale
    • Sixty-eight percent of respondents said the No. 1 issue was that low performers lowered overall workplace morale, and 44 percent felt that managers also increased the work burden on high performers.
  • Low performers stifle innovation
    • More than half of respondents felt that low performers added to a lack of initiative and motivation, contributing to a workplace culture where mediocrity is accepted.
  • Low performers in management positions directly affects attrition
    • Twenty-six percent of respondents within high turnover organizations cited “poor management” as the primary reason why people leave the organization.

Turning it around

The best way to arm principals and supervisors with the knowledge to handle employees that contribute a negative impact on workplace culture and productivity is through management development training. Principals and other school leaders who understand the importance of consistently holding employees accountable and recognizing when action needs to be taken can positively affect workplace morale and decrease turnover rates in a field already under attack by shortages.

Eagle Hill Consulting, which conducted the survey with a focus on general workplace environments, suggested a few ways to help prevent hiring low performing individuals and retain top employees. Below is a list of some of those key points with an added education spin for relevance.
  • Know your high performers
    • In addition to running exit interviews, try “stay” or “retention” interviews. These will solicit direct feedback from high performing teachers on how to improve school operations.
  • Define what “high performance” means in your district—and publicize it
    • By identifying what makes a great teacher, you can better select candidates who match up with your desired traits and prevent adding employees who are only going to bring down their coworkers.
  • Use a competency-based approach to hiring
    • Begin with a clear understanding of what a job requires and what to look for in a successful candidate. Develop a complete candidate profile that identifies what would make a candidate ideally qualified for the job. For teachers, it is important to identify teaching practices directly related to student learning.
  • Implement a “quality of hire” survey
    • Three months after a new hire is brought on, the supervisor can complete the survey and rate the new hire on his or her performance.
The competency interview process for teachers is discussed in our workshop—Hiring Effective Teachers and Keeping Them. We also explore the concept of retention interviews. Sample teacher interview questions correlated to effective teaching practices are available in the Recruiting and Hiring section of the HR Library

District supervisors who do not address low performance issues will see firsthand the toxic effects spreading amongst school employees. By attending manager development training and focusing on the retention of top employees, the workplace can continue to grow and improve as morale increases.


HR Extras

Demand for HR data analysts on the rise

Have you ever wished you could predict which of your employees would be the most successful at a particular job or which interviewee had the highest probability of not working out? Enter the rapidly growing market for HR analysts.

Business leaders are harnessing the power of big data to search for predictable relationships between their investments in their people and the real business results. According to the Global Human Capital Trends 2015 report by Deloitte, one third of surveyed companies are in the process of building data analytics into their HR departments.

For HR, this means collecting data on key variables that affect the bottom line such as time to hire, recruiting costs, and turnover. If you already have data on the number of employees that voluntarily separate from employment, you can quickly calculate turnover.

The HR analyst comes in to give context to the data by running analyses at a more granular level. Investigating deeper levels like position, campus, age, tenure, and ethnicity can reveal truly surprising results that can help fix problems you may not have even known existed.

Time to hire is another pivotal metric that can be addressed by HR analysts. To gain valuable insights on whether or not you are losing top talent to the competition, an HR analyst would want to collect data on the average length of time spent doing things like reviewing applications, screening and interviewing applicants, and processing job offers.  

Because they are currently in short supply, finding HR analysts can be challenging. Some companies are hiring third-party vendors or regular employees, depending on need. 

Realistic qualifications key to good job postings

For clerical, technical, administrative, and auxiliary positions in the schools, some hiring managers may find themselves demanding unrealistic attributes from their applicants. Often times, job postings reflect the qualifications of a previous experienced or long-term incumbent rather than the minimum qualifications needed to enter the job.

Poorly-composed job postings also can deter otherwise talented candidates lacking in extensive experience directly related to the position. In today’s dynamic workforce, candidates with three years of experience can be just as qualified as someone with five or six in past workforces. Hiring managers should emphasize the importance of bringing on motivated candidates with a skill set and attitude that would align with the district’s culture in place of a strict requirement of durational experience.

Additionally, mandating that applicants should have a degree in one or two specific majors can prevent other equally qualified candidates who simply selected another area of study while in college. Discouraging those applicants can reduce the strength of the talent pool, which would ultimately be an exact contradiction of what the job posting had set out to do.

The key to generating a strong applicant pool is through simplicity and honesty in the job posting. Reaching exclusively for star candidates may result in a smaller list of prospective employees to choose from and does not guarantee top-tier talent. Contrarily, opening up the application to a wider variety of candidates with reasonable expectations will encourage more people to apply, and can potentially land that star applicant after all. 

Important updates from TEA

Prekindergarten grant program application deadline approaching
Districts must apply by April 8, 2016 to be eligible to receive grant funding for qualifying prekindergarten students for 2016‒17. Under the program established by House Bill 4 in 2015, districts can receive up to $1,500 per year for each qualifying student, depending on the number of eligible district applicants. Visit the TEA website for more information on the PreK grant program process and timeline.
Superintendent certification pathway rule change now in effect
As of February 28 the new rule allows public school district managers to substitute public school district managerial experience for principal certification. The Texas Education Agency (TEA) states that the experience must be at least three years in duration and include supervisory or appraisal duties; district-level planning and coordination of programs, activities, or initiatives; and involve either the creation or maintenance of a budget. The new superintendent certification application is available on the TEA website.

New TRS surcharge structure will be easier to implement

Beginning Sept. 1, 2016, districts that hire retirees will find it easier to determine the amount of the required health insurance surcharge. Currently, the amount of the TRS-Care surcharge is based on the TRS-Care coverage the retiree is enrolled in and varies from member to member.
Katrina Daniel, chief health care officer, states in a memorandum to the board, “The current surcharge rate structure is a multi-rate system, which is relatively complex to administer and has caused confusion among employers.”
At the Feb. 24 meeting, the board adopted a resolution to implement a single, uniformly applied employer-health-surcharge rate of $535 per month. The new rate will be effective Sept. 1, 2016, and reflects the average amount paid on behalf of approximately 4,000 retirees.
Additional information regarding the processing of TRS surcharges in addressed in this month’s Q&AHow do we process TRS surcharge deduction if we require our retire rehires to assume the cost?

Inside HR Services

Don’t miss out on our projected 2016‒17 pay raise quick poll

Want to know what projected pay increases will be in Texas school districts in 2016‒17? Participate in the short poll and you’ll receive the results following the conclusion of the survey. An e-mail invitation to the online survey will be sent to HR Services contacts on April 7. Look for the survey highlights in the May issue of HR Exchange.

Learn how to build better job descriptions

On April 19, HR consultants will present the webinar Building Better Job Descriptions. Ronda Bauman and Matthew Levitt will outline six straightforward steps you can use to create a realistic plan for developing and updating district job descriptions. Suggestions for project planning, collecting data, writing and reviewing job descriptions, and avoiding common mistakes will be provided. Registration for the live event is available online.

This webinar will be recorded and added to our webinar library. Staff unable to attend the live event can purchase access to the recording and watch it at their convenience. A full list of our recorded webinars is available on the HR Services training page.

Join HR Services staff at the TASB Risk Management Fund Conference

HR Services’ April Mabry will co-present with Laura Romaine, TASB Risk Management’s workers’ compensation claims consultant at the 2016 Risk Management Fund Members’ Conference in Austin on April 26 from 10–11:15 a.m. The session, Timing is Everything: Coordinating and Reporting Workers’ Compensation Absences, will address the roles and responsibilities for claims reporting and administering leave during a worker’s compensation absence.

2016 Model Employee Handbook will be posted in May

The 2016 Model Employee Handbook will be released online in mid-May. Notice of the release will be posted on Twitter (follow us @tasbhrs) and an e-mail will be sent to our program contacts. As you prepare your handbook for 2016, consider using the features that have been built into the editable version to enhance the functionality of electronic handbooks. You can automatically build a table of contents and index and add hyperlinks between table of content and index entries and text. Information on how to use these features is available in Help for Editors.


Q&A: Processing TRS surcharges

Editor’s Note: Our initial guidance provided in the April 2016 Q&A on TRS Surcharges can be described as a very conservative approach. After considerable research and discussion, TASB HR Services and TASB Legal have determined the following:

  • The law is silent as to the source of funds for the surcharge payment, other than the payment must be remitted by the district, not the employee, to TRS.
  • There appears to be no legal guidance in statute, rule, or administrative position stated by TRS or TEA regarding whether and when the surcharge may be deducted from a retiree’s salary if a district requires the retiree to pay the surcharge, or a portion thereof.
  • While a district may require an employee to pay the surcharge amounts, TASB believes a district should pay a retiree no less than the state minimum salary amount reduced by the portion of the surcharge that represents the “current contribution amount that would be contributed by the retiree if the retiree were an active, contributing member” (currently 7.7 percent), because this amount generally is deducted from the salary of an active employee who is subject to the state minimum salary schedule.
  • And, while it is still true that districts can determine the surcharge amount on an annual or monthly basis, there are substantially more benefits to determining the surcharge amount on an annual basis. This method is easier for district staff to calculate, more straight-forward, and easier for employees to understand. This calculation entails starting with the annual salary for the retire-rehire based on the district’s salary schedule for the retire-rehire’s creditable years of experience, then deducting the annual surcharge and, if applicable, annual TRS-Care surcharge costs. As noted in the previous bullet, the deductions cannot cause the retire-rehire’s salary to dip below the annual state minimum salary schedule amount, less 7.7 percent. Because this results in an annual salary negotiated with the employee prior to work beginning, the surcharge “deduction” occurs before any pay is earned or paid and before any tax deductions are required. This allows a district to clearly communicate to an employee what his or her monthly pay will be before work begins.

Q: How do we process TRS surcharge deductions if we require our retire rehires to assume the cost?
A: The law requiring districts to pay a surcharge to the Teacher Retirement System (TRS) does not provide specific guidelines for deducting the surcharge from an employee’s salary. As a result, how and when the deduction occurs is a local decision. To determine how it will be handled, districts need to consider the factors discussed below.
TRS determines and assesses the surcharge on a monthly basis. The amount varies from member to member because it is based on the retiree’s salary and includes the combined state (6.8 percent) and member contribution rates, plus a health insurance surcharge. Beginning in 2014–15 the employee contribution rates have increased by 0.5 percent. The total contribution rate based on the employee’s salary for 2015–16 is 14 percent and for 2016–17 the rate will increase to 14.5 percent.
If the retiree participates in TRS-Care, the district also is required to pay the health benefit surcharge to TRS. Currently, the health insurance surcharge is based on the TRS-Care plan in which the retiree is enrolled. Effective, Sept. 1, 2016, this surcharge will become a set rate of $535 per month (see Extra).
TRS only accepts payment for surcharges from the district. However, the state law that requires the TRS-covered employer to pay the surcharges to TRS does not state the source of the funds. As a result, some districts require the retiree to pay all or a portion of the surcharges.
This is acceptable as long as retirees hired in positions subject to the state minimum salary schedule are paid at least the state minimum salary for their years of experience. For example, a teacher with 20 or more years of experience must be paid at least $45,510 per year ($4,510/month). Editor’s note: The $4,510/month is based on 10 payments. For 12 payments the minimum salary is $3,792.50. Based on the note at the top of this page, it may be acceptable to reduce this amount by the 7.7 percent employee contribution to which all employees, whether a retiree or not, are subject.
Districts that require the employee to assume the cost of the surcharge may determine the surcharge on an annual or monthly basis. If the annual basis is used, the employee’s annual salary is reduced by the cumulative total of the surcharge(s). The net result may not be less than the state minimum salary based on the employee’s experience. Deductions do not appear on the employee’s monthly pay statement and the employee’s federal income tax is based on the reduced annual salary.
If the district chooses to use the monthly method, the surcharges deduction must be done post-tax. As a result, the employee will be subject to federal income tax on the total monthly salary. Districts using this method must also ensure that the monthly surcharge deduction does not reduce the employee’s salary below the state minimum salary based on the years of experience.
It is recommended that districts hiring retirees use the model retire/rehire contract addendum (available in Contract and assignment section of the HR Library). This addendum includes an optional provision that addresses the reduction of salary to offset the surcharge expenses incurred by the district. It is recommended that your district’s school attorney review the text.