If tenure no longer plays a role, what is to stop a school district from just laying off all the highest paid teachers, regardless of their effectiveness?
The law.
Teacher pay is based on experience, the highest paid have the most experience. In other words those that are on the highest pay step for their scale will be those with the most years of service. For a continuous employees teacher that would be someone in the profession for 20-30 years. (In my school system the top step is reached at 33+ years of experience.) For someone with a break in service, the age would be even higher (for example a woman that took two years off to raise a newborn before returning to work.)
Now if the average student graduates with a Bachelors at 22 (and a lot of programs are going to a Masters in a composite Masters program) - then graduation occurs at 22 - 23 years old. To reach the highest steps then they are age 42(43) to 52(53) at that point in their career.
A school system that attempts to eliminate older workers (those over 40) based on their age is in violation of Federal law - Age Discrimination in Employment Act (ADEA).
Age Discrimination
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That doesn't mean that an older worker can't be fired/terminated. They surely can. The can for cause. They can be terminated (retired) for medical reasons if they are unable to perform they duties. If their job is eliminated and they cannot be transferred to a different position for which they are qualified. For example lets say a school district has a Latin program as part of their Foreign Language department and there is a senior teacher that is only endorsed to teach Latin. If the school division eliminates the whole Latin program, then there is no like job that individual is qualified for and they can be terminated because the decision basis isn't age/experience - it's qualifications.
The legal way to do it is what my school division did a couple of years ago. For about 6 or 7 years now we've been in a sever budget crisis. No pay raises, a pay cut one year, and a different year when take home pay decreased because of changes in the retirement system. The budge crisis resulted from (a) shrinking student population, (b) depressed housing market impacting local revenues, and (c) decreased matching funds from the state. We attempted to deal with reduced staffing needs through attrition - which worked pretty well in most areas - but not all because since the economy was poor people that had jobs would tend to hold on to them longer.
So part of the solution was to offer an early retirement package to the most experienced teachers (those on the highest grade/steps). I don't remember all the details as it wasn't my work area, but it included an upfront cash payment, ability to remain on our medical, the school system would continue to make contributions to VRS (for a limited time), and (since they already qualified) would draw their VRS retirement. Since the offerred early retirement package was voluntary, it didn't violate Age Discrimination law.
IIRC - getting a senior teacher to voluntarily retire and (where needed) their replacement with a junior teacher typically resulted in a 2-year break even point.
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