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What LEAs Need to Know About New Law On Rehiring High-Need Teachers

Elizabeth Yelverton | NCASA Legal Affairs & Policy Manager

Last Thursday, Governor Roy Cooper signed into law Senate Bill 399: Rehire High-Need Teachers, allowing school districts to rehire certain retired teachers to work at high-need schools while still retaining their retirement benefits. These rehired teachers would be eligible to work full-time on one-year renewable contracts and be paid at either the first step of the teacher’s salary scale, or the sixth step if teaching in approved STEM or special education areas. The law creates two new definitions that school districts must meet in order to utilize the program — “high-need retired teacher” and “high-need school.” The law defines a “high-need retired teacher” as one who:

  • Retired on or before February 1, 2019;
  • Must be at least 65 with 5 years creditable service, OR at least 60 with 25 years creditable service, OR had 30 years of creditable service; and
  • Must be employed by LEA to teach at “high-need school.”

The law defines a “high-need school” as “any school that, at any point on or after July 1, 2017, regardless of whether it maintains one or both of these classifications, is or was: Title I, or receives an overall school performance grade of D or F.” The law notes that “high-need schools” cannot hire teachers who retired before Feb. 1, 2019 to work under the traditional earnings cap, as they can only be rehired under the provisions of the new law. This aims to prevent pay inequities between retirees rehired at the same high-need school, as rehired teachers are likely to make significantly more under S399 than the previous earnings cap. A retired teacher can still return to work subject to the earnings cap at a non-“high-need” school.

While the new law aims at helping the State’s neediest schools retain and recruit quality teachers, entities such as the State Treasurer’s office warn the law may have possible repercussions with the Internal Revenue Service (IRS). In order to ensure the new law does not affect the Retirement System’s tax-exempt status, the law directs the State Treasurer’s office to seek a private letter ruling from the IRS, which the Treasurer’s office estimates will take 6-12 months to receive. If the IRS issues an adverse ruling, the law will be automatically repealed 30 days from the state’s receipt of notice. Further, school districts employing high-need retired teachers would then have to notify those teachers of the law’s repeal within 3 days of notification by the State Treasurer.

In a Q & A document prepared by the NC School Boards Association (NCSBA), the State Treasurer’s office addresses other potential issues with the new law, including possible liabilities for school districts. Under the law, LEAs are responsible for paying the costs of correcting any errors they make in meeting the requirements of the new law, such as incorrectly classifying employees as high-need retired teachers in their reports to TSERS. LEAs may also face pension overpayment costs if high-need retired teachers are employed at another school or location where they would accrue additional retirement benefits.

School districts that decide to utilize the new law should first determine if they qualify, and then analyze their reporting and compliance requirements under the program. Schools should address any specific concerns or liabilities with their local school board attorney.

Elizabeth Yelverton
eyelverton@ncasa.net
919-703-2487