School District Compensation of Retire/Rehire Employees

Many districts engage in the practice of employing retired teachers and administrators for various reasons.  Generally, these decisions are based on local need and other financial considerations.  While this is not intended to cover all financial considerations, two situations are considered.

First, a district should be aware that the Texas Education Agency has taken the position that all retire/rehire employees are entitled to at least the state minimum salary, commensurate with their level of experience.  Even if a potential retire/rehire employee is agreeable to altering the terms of their employment (for example, agreeing to different step-level rate of pay than they may otherwise be entitled), districts should tread cautiously with this approach.   Paying a retire/rehire employee less than what they are entitled under the state minimum salary schedule could trigger various claims by aggrieved retire/rehire employees, one of the most significant of which is a federal claim under the Age Discrimination and Employment Act (the “ADEA”).  If in doubt, the district should consult with legal counsel.

Second, a district may want to recover a portion of the retire/rehire employee’s TRS imposed surcharge.  If employing a retire/rehire employee who retired after September 1, 2005, districts must pay a retirement fund surcharge, and possibly a health benefit surcharge if the retiree is enrolled in TRS Care.   The district may recover from the employee an amount up to the surcharge and still avoid claims for age discrimination under the ADEA.  If a district decides to recoup the surcharge from the retire/rehire employee, it should be evidenced in a retire/rehire addendum to the employment contract.  These situations should be evaluated on a case by case basis in relation to a particular employee.

This column is published for informational purposes only. It should not be construed as legal advice and is not intended to create an attorney client relationship. The views expressed are those of the author and do not necessarily reflect the views of the author’s law firm or its individual partners.

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