Nothing like a good Loverboy song reference to convince you to keep reading!
The Problem
In March of 2020, COVID shut down school districts across Nebraska. A state statute required that certificated teachers be paid their full teaching contract salaries during the shutdown. However, school districts took different approaches to paying teachers for extra duty assignments like track, prom and baseball. Although nearly all districts at the time had divided the extra duty pay for spring activities across all payroll periods, some districts deducted that spring extra duty pay from the spring coaches’ final 2019-20 paychecks. Those districts reasoned that if the spring sport and/or event did not take place due to the shutdown, the spring coaches and/or sponsors had not earned this extra pay. Other districts paid their spring coaches/sponsors the same amount that they would have made if the activity had occurred. These districts reasoned that the spring sponsors had performed some amount of work towards the fulfillment of their coaching/sponsorship duties and that it would be unfair to penalize these employees for the fact that the governor had shut down schools for the spring of 2020. The teachers’ union, to its credit, did not aggressively battle districts over this issue, reasoning that no one was prepared for the pandemic and that boards were making decisions under the gun with little guidance from the state. As a result, different districts made different decisions on this issue.
Problems arose when the Nebraska State Auditor of Public Accounts conducted its 2020 annual audit of the Nebraska School Employees’ Retirement System. The audit team discovered that some schools had made retirement contributions on the extra duty compensation paid to spring coaches/sponsors while other schools did not make those contributions. This led the audit team to require the retirement system to force schools to keep records to prove on a go-forward basis that coaches/sponsors were actually earning their extra duty pay. [The legal reasoning behind this new requirement is a complicated combination of interpretations of several statutes and regulations. NPERS was kind enough to provide us with a summary of the legal reasoning, which you can read here.]
The Solution that NPERS Proposed
The audit team’s position put NPERS in the unenviable position of trying to meet the new auditor requirements while trying to convince schools to change their long-standing payroll practices. As a result, NPERS revised its “Manual for Employer Contacts” to add a requirement for schools to track and report coaching and extra duty hours. It then gave school districts two choices for how to pay coaches/sponsors:
Pay coaches/sponsors their extra duty pay only in the months when the activity or sport takes place; or
Pay coaches/sponsors over 12 months, and then submit an adjustment report at the end of the contract year to move the extra duty wages/hours to the month(s) in which they were actually earned/worked.
Unfortunately, neither of these solutions has been popular with the education community. Coaches and sponsors are typically learned professionals under the FLSA, meaning they do not have to track their hours under the wage and hour laws. Most of these employees don’t really want to take the time to track their hours. Staff also have a strong preference for an even paycheck across all payroll periods. Similarly, business officials do not like having to recalculate certificated staff paychecks each month and they certainly don’t like having to file adjustment reports for all coaches and sponsors. (For its part, the retirement system staff is not enthusiastic about processing so many adjustment reports at the end of the school year).
A Third Option
KSB School Law attorneys reached out to NPERS’ general counsel to see if we could find a way to pay coaches and sponsors over 12 months AND to avoid the tracking of hours.
NPERS has graciously spent hours working with us to try to find a solution. Eventually, we landed on a third option for districts to pay extra duty and to report those hours to NPERS. Districts who want to pay their staff for extra duty over all pay periods without tracking hours may:
Adopt a policy that NPERS has approved that articulates the reality that coaches and sponsors work on their extra duty assignment in all months, not just in the months during the season or when the event occurs; and
Issue each staff member an extra duty assignment letter that NPERS has approved which reinforces the requirements of the policy.
Districts that use this approach will not be required to submit any additional documentation to NPERS, absent some other unforeseen event. This solution can also be used retroactively -- which means districts can adopt this policy and issue this letter now, and be in compliance back to the beginning of the 2021-22 school year.
A Few Caveats
There are some important details that districts should keep in mind when adopting this solution.
First, classified staff members who perform extra duties are required by the FLSA to track their hours and to be paid overtime for hours worked over 40. This policy and assignment letter do nothing to change that. If you have classified staff who coach for a flat stipend, you should reach out to your school attorney about how to deal with that issue.
Second, this policy can only apply to teachers who are anticipated to work 1,100 hours per contract year in their teaching position not factoring in the extra duty service. That means a teacher who is less than .7 FTE (including community coaches) will still need to track their hours , because those hours could change either (1) when that part-time teacher could qualify for retirement contributions and accrue hours toward eligibility to full benefits or (2) could increase the service credit going towards their retirement benefit.
Third, you’ll notice that this policy has extra duty responsibilities beginning the summer before the school year starts. We know that newly-hired teachers who will coach or sponsor typically begin meeting students and preparing for the school year before their official start date. Similarly, returning coaches and sponsors take students to camps, go to clinics and do all manner of things to begin preparing for the upcoming year. The problem is, if that time is credited to the summer AFTER the school year ends, it could delay the date when a coach/sponsor can retire. That is because the retirement system refers back to prior contract years to determine whether a teacher has worked his/her full contract in the year he/she retires. Some coaches and sponsors have had their eligibility date delayed by “trailing” extra duty activities.
Fourth, this policy also seeks to solve the “trailing days” problem that can arise for staff members with extended contract days (typically Ag teachers, staff who work on curriculum, counselors and the like). Again, if the teacher wants their separation from service to be at the end of the school year when they retire, they will need to perform their extended contract days in advance of the school year to keep in that 12-month contract year cycle.
Conclusion
If your district has complied with the new NPERS requirements and are content to continue that process, you do not have to make any changes. However, if your district would like to avoid tracking hours and would like to pay for extra duty over all pay periods, the KSB policy/assignment letter option is now available. If you are a policy service subscriber, you will receive those documents as part of your subscription. If your district is not a service subscriber, you can e-mail Ashley at ashley@ksbschoollaw.com to request a copy of those documents. We are charging $350 for the policy and assignment letter. If you have any questions about the “extra duty retirement pay” problem, you should feel free to call Karen, Steve, Bobby, Coady, Tyler, or Jordan at (402) 804-8000, or shoot all of us an e-mail at ksb@ksbschoollaw.com.