A Review of the Teacher Layoff Process in California

A Review of the Teacher Layoff Process in California M A C TAy l o r • le g i s lA Ti v e A nAl y sT • M A r C h 2 2 , 2 012 An LAO RepOR t 2 Legislative Analyst’s Office www.lao.ca.gov An LAO RepOR t ExECuTivE SummARy Reductions to school districts’ budgets over the past five years have resulted in a sharp decline in the teacher workforce, with the number of full-time teachers decreasing by 32,000 since 2007-08. One way school districts have reduced their workforce is by laying off staff. This has led to an increased focus on how the teacher layoff process works. This report gives an overview of the existing layoff process, evaluates how well the process is working, and makes recommendations for improving its effectiveness. For our analysis, we distributed a survey to all public school districts in the state asking them about their implementation of the teacher layoff process, used information provided by two state agencies—the California Department of Education (CDE) and the Office of Administrative Hearings (OAH), and included information from the California Teachers Association (CTA). Districts Are Issuing More Layoff Notices Than Necessary. One of the most significant problems with the existing layoff process is the notification time line. The state-imposed layoff time line is disconnected from both the state budget cycle and the availability of critical local information. Because of this misalignment, the number of teachers that are initially noticed typically far exceeds the number of teachers that are actually laid off for the following school year. Moreover, the August option for laying off additional staff following the start of the state’s fiscal year is often not helpful. Though this contingency option is designed to help districts balance their budgets in the summer if the final state budget differs significantly from the May Revision, it officially has been activated only a few times. Recommend Aligning Layoff Time Line With State Budget Process. We recommend changing the time line to later in the year—to June 1 for initial layoff notices and to August 1 for final notices. This would better align the layoff deadlines with the state budget process—resulting in fewer notifications unnecessarily issued by school districts because they would have better fiscal information on which to base their layoff determinations. Fewer initial notifications, in turn, would reduce the time and cost invested in conducting the layoff process, result in fewer teachers unnecessarily concerned about losing their job, and minimize the loss of morale in the school communities affected by layoff notices. We also recommend the Legislature replace the existing August layoff option with a rolling emergency layoff window. The window would require a district to notify teachers and complete due process activities within 45 days of a major state budget action. Hearing and Appeals Process Adds Some Value, but Is Costly. Another significant problem with the teacher layoff process is unnecessary costs incurred by school districts because of inefficiencies in the hearing and appeals process. The current hearing and appeals process helps ensure districts implement the state’s layoff process correctly, with OAH assisting districts in correcting mistakes. However, teachers’ automatic right to a hearing adds significant costs without adding substantial value. The hearings are primarily used to check factual mistakes, which could be achieved between the district, the bargaining unit, and OAH without conducting formal hearings. Our survey indicates that districts on average spend roughly $700 per-noticed teacher, with the largest costs relating to district personnel and legal activities. With the costs estimates derived from our survey, we estimate that districts spent about $14 million statewide on layoff-related costs in 2010-11. www.lao.ca.gov Legislative Analyst’s Office 3 An LAO RepOR t Recommend Streamlining Hearing and Appeals Process. We recommend eliminating teachers’ right to a hearing and replacing the hearings with a streamlined alternate process that ensures: (1) all relevant information is presented to OAH for review and (2) both district and union personnel have an adequate opportunity to review, comment upon, and dispute each other’s information. Eliminating hearings would increase the efficiency of the layoff process while maintaining the oversight needed to ensure teachers are laid off correctly according to state law. State Values Seniority in Layoff Process. A more challenging area for the state to address is the selection criteria used to determine which teachers will be laid off. Current law requires that districts lay off teachers in inverse seniority order but it provides some exceptions for deviating from seniority to protect specialized teachers or to achieve equal protection of the laws. Using seniority on a statewide basis for laying off staff has some benefits. On one hand, it is an objective, standard approach that is transparent and easy to implement. On the other hand, basing employment decisions on the number of years served instead of teachers’ performance can lead to lower quality of the overall teacher workforce. California also is different than many other states—the majority do not prescribe seniority- based layoffs but rather allow school districts themselves to decide how to lay off their staff. Recommend Exploring Alternatives to Seniority. Given the limitations of using seniority as the primary factor in layoff determinations, we recommend exploring statewide alternatives that could provide districts with the discretion to do what is in the best interest of their students. Ideally districts would use multiple factors in making layoff determinations—factors that result in the least harm to students, the overall teaching workforce, and the school community. Some alternative factors districts could consider are student performance, teacher quality, and contributions to school community. Many of these factors could be considered at both the local and state level, but some (such as contributions to school community) might be impractical data collections for the state to pursue. Nonetheless, the state could play a key role in helping districts develop reliable teacher quality information. Specifically, it could encourage the CDE to collect and disseminate district best practices on evaluating teacher performance. Recommend Carefully Reassessing State Involvement and Expanding Locally Negotiated Options. As evident from the above description, state law regarding teacher layoffs is very prescriptive—notably more prescriptive than layoff policies in many other states. Moving forward, the state faces difficult trade-offs in deciding how involved to remain in local personnel matters. On the one hand, if the state retains its highly involved role, it can help assure that districts do not make layoff decisions that are arbitrary, biased against individual teachers, or based upon political or personal motivations. On the other hand, the state’s existing involvement might be deterring districts from taking the time and effort to establish their own layoff procedures that are better aligned with local needs. Moreover, the state recently has become less prescriptive in a number of areas in the state budget, including education. We recommend the Legislature carefully reassess the need for and benefits of its current prescriptive role in local personnel matters. One option for providing greater local control would be to allow districts and local bargaining units to negotiate more aspects of the teacher layoff process. 4 Legislative Analyst’s Office www.lao.ca.gov An LAO RepOR t inTRoduCTion Over the past several years, school districts in in the fall of 2011 to all public school districts in the California have experienced ongoing cuts to their state asking them about their implementation of operational budgets and made difficult associated the teacher layoff process. The survey asks a range decisions—including reducing their teacher of questions regarding the time line districts use workforce. One of the primary ways districts are to meet state notification deadlines, the selection able to reduce their workforce is by laying off criteria districts use to lay off teachers, and the staff. Under current law, the state sets forth many costs of undergoing the process. Out of about 950 aspects of the layoff process, including establishing districts statewide, 230 completed a response. We time lines and procedures for notifying teachers received responses from eight of the state’s ten of layoffs as well as specifying how teachers may largest school districts. In total, the districts that appeal layoff decisions. In this report, we provide responded to our survey represent 44 percent of background information on the size of California’s the state’s average daily attendance (ADA). Though teacher workforce, give an overview of the existing representing a large portion of total ADA, our teacher layoff process, assess how well the process survey sample is slightly more representative of is working, and make recommendations for large urban districts. The survey questions and improving its effectiveness and lowering its costs. results are contained in the appendix at the end of For this report, we use information provided by this report. CDE, OAH, and CTA. We also distributed a survey RECEnT TREndS Statewide School Funding Reduced 8 Percent certain fund sources. Although these federal and Over Past Five Years. Programmatic per-pupil state actions allowed school districts to save many funding is lower today than five years ago. In teacher jobs, they were not sufficient to forestall 2011-12, per-pupil funding is $7,580—8 percent teacher layoffs entirely. lower than the 2007-08 level of $8,235. This Teacher Workforce Also Reduced Significantly reduction in school district programmatic Over Past Few Years. In response to these funding support would have been deeper had it not been reductions, many districts have reduced staffing for a substantial amount of one-time federal aid. levels (the largest operational expense in their Between early 2009 and the end of 2010, California budgets). As shown in Figure 1 (see next page), the received a total of $7.3 billion in special one-time size of the state’s teacher workforce has decreased federal aid ($6.1 billion from the American by about 32,000 teachers (11 percent) since 2007-08. Recovery and Reinvestment Act and $1.2 billion While the teacher workforce has been shrinking, from the Federal Education Jobs Act) that could be the statewide student population has been generally spent over the 2008-09 through 2011-12 period. In steady. The net effect of these two trends has been addition to this federal aid, the state took several an increase in the number of students per teacher— actions to mitigate programmatic reductions, climbing from 19.4 in 2007-08 to 20.5 in 2010-11. including deferring certain payments and swapping www.lao.ca.gov Legislative Analyst’s Office 5 An LAO RepOR t positions. Districts also Figure 1 can be proactive in offering Teacher Workforce Is Shrinking early-retirement incentives. Providing these incentives Full-Time Equivalent Teachers has been a common practice 310,000 among districts in the past few years (with incentives offered 300,000 by roughly 30 percent of districts). The early-retirement 290,000 option allows districts to reduce the number of more 280,000 senior, more expensive staff 270,000 to save more entry-level jobs. In addition, districts can 260,000 reduce their workforce by laying off staff—a practice 250,000 that has become more 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 common given recent budget reductions. From 2009-10 to Some Regions Experiencing Deeper Teacher 2010-11, the size of the teacher workforce declined Workforce Reductions. Though the statewide by 7.7 percent. Though precise estimates are not teacher workforce has been reduced by 11 percent, available, retirements and layoffs likely accounted various regions throughout the state have been for roughly the same number of job losses, with experiencing deeper reductions—primarily because attrition accounting for a relatively small number they are undergoing significant declines in student of losses. enrollment in addition to budget reductions. Number of Layoffs Is Unknown. The CDE The vast majority of districts are reducing their does not collect data on the number of teachers teacher workforce, with 342 districts reducing laid off each year. The OAH collects data on the their workforce by more than 10 percent since number of districts conducting the layoff process 2007-08. As shown in Figure 2, districts in Los each year. Information provided by OAH shows Angeles County and Solano County, for example, many districts are undertaking the layoff process— have reduced their teacher workforce by a weighted roughly one-third of districts issued layoff notices average of 15 percent and 16 percent, respectively. in 2010-11 and about 500 districts conducted (Only 2 counties—San Francisco and Mono—have layoffs in each of the previous two years. The bulk increased their teacher workforce over this period.) of districts responding to our survey reported Districts Have Reduced Teacher Workforce in undergoing the layoff process two or three times in Several Ways. Districts have a few ways they can the past four years. Data collected by CTA indicate reduce their teacher workforce. In any given year, that more than 20,000 initial layoff notices were districts can rely on retirements and attrition, with issued statewide in 2010-11 for the 2011-12 school some teachers voluntarily exiting the workforce year, but no agency knows how many teachers and districts choosing not to backfill the associated statewide ultimately were laid off and not rehired. 6 Legislative Analyst’s Office www.lao.ca.gov An LAO RepOR t Figure 2 Changes in Teacher Workforce Vary Across State Del Norte Siskiyou Modoc Percent Change From 2006-07 Through 2010-11 Flat or Growing Shasta Lassen Declining Less Than 10 Percent Humboldt Trinity Declining 10 Percent to 20 Percent Declining More Than 20 Percent Tehama Plumas Butte Glenn Sierra Mendocino Nevada Lake Colusa Yuba Placer Sutter Yolo El Dorado Sonoma Napa Sacramento Alpine Amador Solano Calaveras Marin Contra Jo S a a q n uin Tuolumne Mono Costa San Francisco Alameda Stanislaus Mariposa San Mateo Santa Clara Merced Madera Santa Cruz San Fresno Inyo Benito Monterey Tulare Kings San Luis Obispo Kern San Bernardino Santa Barbara Ventura Los Angeles Riverside Orange San Diego Imperial www.lao.ca.gov Legislative Analyst’s Office 7 An LAO RepOR t ovERviEw of TEAChER LAyoff PRoCESS Layoff Process Largely Dictated by State Law. state-required curriculum modification, Districts have two options for structuring their though teacher layoffs rarely are initiated teacher layoff process. The vast majority of districts for this reason. use the state layoff process established in 1976. A State Law Also Prescribes Various Other few districts (6 percent) locally negotiate with their Aspects of Layoff Process. Current law establishes employee bargaining unit certain layoff processes the criteria districts are to use in determining per the Education Employment Relations Act which teachers to lay off. It also sets the time line (EERA) of 1975. Specifically EERA allows districts in which districts are to make initial and final to negotiate layoff procedures for: (1) probationary layoff decisions. Additionally, state law sets forth teachers for any reason and (2) both probationary an administrative oversight process whereby OAH and permanent staff if the district lacks the funds is to ensure districts are adhering to state layoff to support the positions. policies. Lastly, if circumstances improve for State Law Specifies Under What Conditions school districts—either they receive additional, Districts Can Lay Off Teachers. Current law unexpected revenues or experience higher-than- allows districts to lay off teachers in a few specified projected student enrollment—and they plan to situations. add full-time equivalent staff as a result, then they • Districts can lay off teachers if their are required to rehire teachers in seniority order student enrollment is declining. Layoffs from a list of laid off employees. Probationary resulting from declining enrollment are teachers (first- and second-year teachers who allowed either when a district’s student have not yet received permanent status) stay count is below the previous two years or on the “rehire” list for 24 months. Permanent when an interdistrict student transfer teachers remain on the list for 39 months. The agreement is terminated. layoff process for teachers is different than layoff procedures for other public education employees • State law also allows districts to lay off as well as state-employed civil servants, as teachers if they can show that they need discussed in the nearby box. to reduce a “particular kind of service.” Four Concerns With Existing Process. In Reductions in particular kinds of services reviewing the existing layoff process, we have four (such as eliminating art programs or areas of concern relating to: (1) the time line for closing an elementary school) are almost layoff notifications, (2) the hearing and appeals always connected with budget reductions. process, (3) the selection criteria for making layoffs, Districts have some discretion in deter- and (4) the extent of the state’s involvement. The mining which service(s) or program(s) remainder of this report is dedicated to examining should be reduced or eliminated in order each of these issues in turn. We begin with the to balance their budget. area for which we believe changes in state law • In addition to these reasons, state law could make the most immediate, significant allows districts to lay off teachers due to a improvement. 8 Legislative Analyst’s Office www.lao.ca.gov An LAO RepOR t TimE LinE foR LAyoff noTifiCATionS Current Law from the previous fiscal year. This accelerated 45-day process—often called the “August layoff Establishes Early Time Line for Notifying window”—must be complete by August 15. The Teachers. School districts are required to August layoff window requires the same basic determine the number of layoffs needed for a given notification and hearing activities as the regular school year and initially notify teachers who are process but on an expedited time line. to be laid off by the proceeding March 15. They also must confirm teachers receive the notice and districts Significantly overnotify are informed of their right to request a hearing. Layoff Deadlines Precede Key Budget Two months later, by May 15, school districts are Deadlines. School districts rely on information required to make official layoff decisions. In special provided throughout the state budget cycle to circumstances, districts have one further avenue build their local budgets for the following school to lay off additional staff. Assuming a final state year. Two key steps in the state budget cycle that budget is passed around the beginning of the state’s influence districts’ decisions are the Governor’s fiscal year (July 1), districts are able to initiate an January budget and May Revision (see Figure 3, accelerated layoff process if their revenue limit next page). Districts typically use the initial allocations do not increase by at least 2 percent funding estimates in the Governor’s January budget Comparing Teacher Layoff Process with Process used for Classified Staff and Civil Servants Similarities. Some similarities exists in the procedures used to lay off teachers and those used for classified staff (noncertificated public education employees) and state-employed civil servants (state employees). For all three groups, the criteria used to determine who is to be laid off is the same: inverse seniority. Additionally, the state requires the employers of all three groups to provide substantial advance notice to employees—classified staff must be noticed 45 days and civil servants must be noticed 120 days prior to the effective layoff date. Differences. While there are some similarities, teachers have additional protections that are not provided to other public employee groups. Though all must receive advance notice, classified staff and state employees can be laid off at any time throughout the year whereas school districts typically only can lay off teachers during the March-through-May period. The hearing and appeals process also varies for the three employee groups, with teachers receiving the greatest protections. Classified staff do not have the right to appeal layoff determinations (unless pursuing a formal grievance), and no state agency is required to oversee the school district’s process in laying off classified staff. By comparison, state employees, similar to teachers, can challenge their seniority determinations through an appeal, but state employees are not granted a hearing automatically. The Department of Personnel Administration—the state agency that oversees civil servant layoff processes—investigates each appeal and determines whether it warrants a hearing. (Some state agencies have alternate layoff procedures that may provide different due process rights for state employees, though this depends on whether they have negotiated these alternate procedures in their collective bargaining agreements.) www.lao.ca.gov Legislative Analyst’s Office 9 An LAO RepOR t Figure 3 Layoff and Budget Time Lines Are Misaligned School District Layoff Activities State Layoff Time Line State Budget Process October November Develop Seniority List December January January 10th Governor’s Budget Determine if Layoffs Are Needed February Prior Make Initial Layoff Decisions School Year March March 15th Initial Notification April Hold Due Process Hearings May Make Final Layoff Decisions May 15th Mid May Final Notification Governor’s May Revision June July 1st July Start of Fiscal Year August Rehire Teachers August 15th Contingency Window School Year Layoffs Are September First Day of School Operative 10 Legislative Analyst’s Office www.lao.ca.gov An LAO RepOR t proposal to determine whether their existing noticed and morale problems for many teachers program can be maintained moving forward. If unnecessarily told they will lose their job—districts state funding projections are such that districts are essentially forced to overnotify so they can be believe they cannot sustain their current program assured of being able to balance their budget in the into the following school year, then they can following fiscal year. initiate the teacher layoff process. School districts Contingency Layoff Window Is Not must make their final layoff decisions about the Particularly Helpful. In the past four years, the same time as the May Revision—prior to the August layoff window has been available only once enactment of the state budget. Given the January (2009-10). Though revenue limit allocations for budget proposal, May Revision, and final budget school districts have not increased by more than package can and often do dramatically differ, 2 percent since 2008-09, state budgets enacted districts face a significant level of uncertainty in close to or after August prevented the window making staffing decisions for the coming fiscal year. from opening in 2008-09 and 2010-11, and the Overall, the state layoff deadlines force districts state prohibited the layoff window from being to make layoff determinations too early without used in 2011-12. Though this contingency option accurate fiscal information. Additionally, critical is designed to help districts balance their budgets local information, such as the number of teachers in the summer if the final state budget differs that will leave the district or retire, is typically not significantly from the May Revision, it officially has available by the time school districts are required to been operative only a few times and has not been make layoff decisions. used widely. To Protect Against Budget Uncertainties, Recommend Aligning Layoff Time Lines Districts Routinely Plan for More Layoffs Than with State Budget Process Necessary. Primarily because of the uncertainty resulting from the misalignment between the state Move Layoff Deadlines Later in the Year. We budget cycle, the state-imposed layoff deadlines, believe the state-imposed layoff time line should and the timing of critical local information, be better linked with the availability of critical districts issue significantly more layoff notices than state and local fiscal information. Specifically, we necessary. As shown in Figure 4 (see next page), recommend changing the time lines later in the the number of teachers that are initially noticed far year—to June 1 for initial layoff notices and to exceeds the number of teachers that are actually August 1 for final notices. Allowing districts to laid off for the following school year. Out of every wait until a couple weeks after the May Revision to ten teachers that are “pink slipped,” roughly half issue initial layoff notifications would significantly are given final layoff notices and only two or improve the quality of the fiscal information upon three are not rehired prior to the beginning of the which districts base their decisions and decrease school year. Many districts either rescind almost the number of notifications issued. This is because all notices before the final notification deadline or the May Revision offers much better information rehire almost all staff after they receive final state than the Governor’s January plan given it is based budget information in the early summer months. upon updated state revenue estimates. Fewer initial While planning for more layoffs than necessary is a notifications, in turn, would reduce the time and problem for school districts—particularly because cost invested in conducting the layoff process, result it results in higher costs for each additional teacher in fewer teachers unnecessarily concerned about www.lao.ca.gov Legislative Analyst’s Office 11 An LAO RepOR t losing their job, and minimize the loss of morale in August layoff window with a rolling emergency the school communities affected by layoff notices. layoff window. Unlike the current contingency Balancing Needs of Districts and Teachers. option, we recommend establishing a “last-resort” Considerable trade-offs exist in setting new layoff window that districts can use at any point in the deadlines. Establishing later deadlines means school year if the state makes significant budget school districts have better fiscal information changes. The window would require a district to on which to make their layoff determinations, notify teachers and complete due process activities whereas setting earlier deadlines gives those within 45 days after a major state budget action. teachers ultimately laid off more time to seek The 45-day emergency layoff window only would other employment opportunities. We believe a become available to districts if the state made June 1 deadline for initial notification is reasonable significant budget reductions from the May because it attempts to balance these competing Revision level. For example, we suggest allowing priorities—allowing districts to have relatively districts to use this window if the state makes solid fiscal information prior to making initial reductions of 5 percent or more from the May layoff decisions, minimizing the overall number Revision level. of teachers affected, and notifying laid off teachers New Rolling Emergency Window Also before the end of the school year (in most districts) Balances Needs of Districts and Teachers. The so they can have the summer months to seek state also faces important trade-offs when deciding alternate employment. whether to provide districts the ability to reduce Provide Rolling Emergency Layoff Window. staff midyear. On the one hand, allowing districts We recommend the Legislature replace the existing to reduce their staff throughout the school year Figure 4 Districts Issue Significantly More Layoff Notices Than Necessary Teacher Workforce “Pink Slipped” Initially Noticed Finally Noticed Laid Off About 10 Percent Rescinded Rehired Note: Illustration based upon our survey data from 2008-09 through 2011-12. Survey data somewhat overrepresentative of districts that recently conducted layoff process. 12 Legislative Analyst’s Office www.lao.ca.gov An LAO RepOR t could cause disruptions in the classroom for of the fiscal year. An emergency layoff window also students and increase the difficulty laid off teachers would help districts reduce initial overnotification have finding employment for the rest of the school and layoffs by providing a subsequent opportunity year. On the other hand, if districts are faced for adjusting their staffing levels. Moreover, few with significant budget uncertainty, as they are other employee groups have similar types of in the 2012-13 budget cycle with potential trigger protections from midyear layoffs—including other reductions, an emergency layoff window would employee groups that also are entrusted with allow them to reduce their staffing level if needed providing continuity in services. to ensure they remain solvent throughout the rest hEARing And APPEALS PRoCESS Current Law teacher dismissals (as one participant of a three- member panel). Its current role in the teacher layoff Noticed Teachers Have Right to a Hearing. process is to review school districts’ implementation Noticed probationary and permanent teachers have of state layoff policy—ensuring policy is adequately the right to a due process hearing if contesting applied and both school districts and teachers have a school district’s initial layoff notice. Both the an opportunity to present relevant information school district and teacher (or the local bargaining as well as review and dispute the other party’s unit if it is legally representing that teacher) may information. School districts are required to present relevant information that supports each submit all applicable information (seniority list, of their respective cases. Relevant information governing board-approved resolutions on services includes testimony or documentation that supports that will be reduced, and tie-breaking and skipping or disputes each teacher’s start date, credential criteria) to the ALJ and set up a hearing date with a status, and any other information related to the preliminary estimate of the number of teachers that criteria the district used to issue the preliminary will be present at the hearing. The ALJ conducts the layoff notice. The hearings are conducted by hearing and has until May 7 to provide its advisory OAH’s Administrative Law Judges (ALJ)—whose recommendation to the school district’s governing role we discuss in the following section. The board regarding which teachers can be laid off hearings typically are held from April to early legally. The governing board can then accept or May and typically last from one to two days. The reject the ALJ’s recommendation, with the board district is required to provide substitute teachers required to implement final layoffs by May 15. for all teachers that attend a hearing. While most districts’ hearings last one or two days, hearings for Process Adds Some value but is Costly larger districts with hundreds or even thousands of ALJ Provides Administrative Support and noticed teachers can take several weeks to conduct. Oversight of District Actions. In implementing ALJ Oversees How Districts Implement the state’s layoff process, districts sometimes State Layoff Policies. The OAH is a quasi-judicial make mistakes. For example, districts can make agency that hears administrative disputes for state mistakes identifying employee start dates, and local government agencies in California. In documenting teacher credentials or specializations, education, OAH is involved in addressing disputes or interpreting state-allowable selection criteria. relating to special education, teacher layoffs, and www.lao.ca.gov Legislative Analyst’s Office 13 An LAO RepOR t While certain mistakes, such as incorrect directors, support staff, and other administrators employee start dates and credential status, are in preparing and implementing layoff activities; administrative and easily corrected, more serious and (4) substitute costs to replace teachers that mistakes tend to occur when districts try to participate in hearings or other layoff activities (see interpret state law regarding allowable selection Figure 5). Our survey indicates that districts on criteria. Districts that are implementing this average spend roughly $700 per-noticed teacher, process for the first time tend to make more with the largest costs relating to district personnel mistakes. In these cases, ALJ oversight tends to be and legal activities. In the layoff process held more valuable in helping ensure that all teachers in 2010-11 for reductions in the 2011-12 school are laid off correctly. For those districts that have year, 370 districts issued over 20,000 initial layoff conducted this process for a number of years, notices. With the costs estimates derived from such that they are highly experienced in building our survey, we estimate that districts spent about and maintaining their seniority list as well as $14 million statewide on layoff-related costs. their layoff criteria, the administrative oversight Recommend Streamlining process takes considerably less time but still Administrative Process might be helping to ensure that state layoff law is implemented appropriately. Eliminate Teachers’ Right to a Hearing. ALJ and School Districts Tend to Agree on The hearing aspect of the process does not add Layoff Determinations. While districts do make substantial value especially because mistakes on some mistakes, the vast majority of them report the seniority list could be resolved between all that the ALJ’s layoff recommendations are rarely parties prior to the hearings. Conducting formal or never different from their own initial layoff hearings to check factual mistakes—what happens determinations. Furthermore, districts often meet in the majority of cases—is unnecessary and with their local bargaining unit prior to or during costly. We recommend the state eliminate teachers’ the hearings to discuss relevant information and right to a hearing but retain the ALJ’s oversight in resolve mistakes, though this is highly dependent the process. Though we recommend eliminating on the relationship between the districts and the local bargaining units. The vast majority of Figure 5 districts (95 percent) report resolving most of Layoff Process Has High their mistakes prior to the hearings. In the cases Personnel and Legal Costsa wherein the majority of mistakes are worked out (Dollars in Millions) between the district and bargaining unit, the ALJ’s 5% oversight through the formal hearing does not add $0.7 much value. For these districts, the hearings are an 15% $2.1 District Personnel unnecessary investment of time and resources. 46% Legal Costs Administrative Process Is Costly. State law $6.5 Substitute Teacher Costs requires that school districts pay for the costs Mailings 34% associated with laying off staff. Districts incur a $4.8 variety of costs, including (1) notification mailings; (2) legal and AJL costs; (3) district personnel a Reflects estimates based on our survey of districts’ costs, such as time spent by human resources per-noticed-teacher costs in the 2010-11 layoff process. 14 Legislative Analyst’s Office www.lao.ca.gov An LAO RepOR t formal hearings, we recommend the state establish consumes considerable staff time (both for district a streamlined alternate process that ensures: (1) all and union personnel). Eliminating hearings relevant information is presented to the ALJ for would increase the efficiency of the layoff process review and (2) both parties have an adequate while maintaining the oversight needed to ensure opportunity to review, comment upon, and dispute teachers are laid off correctly according to state each other’s information. law. For larger districts, whose hearings can last Would Lower Costs Especially for Larger for weeks, the potential time and cost savings of Districts, Increase Efficiencies Overall. While eliminating hearings are substantial. For medium some of the costs associated with the layoff process and smaller districts, that typically conduct are unavoidable (such as district personnel costs hearings lasting one or two days, associated time associated with developing the seniority list), and cost savings would be less but still reflect some conducting hearings adds unnecessary costs and fiscal relief. SELECTion CRiTERiA Current Law criteria for laying off staff, it allows districts to deviate from seniority for three specified reasons. Inverse-Seniority Order Is Required, Results in a Last-Hired, First-Fired Policy. State law • If two or more employees started with the requires that districts lay off teachers in inverse district on the exact same date, the district seniority order. That is, the last teachers hired in has the right to develop standard criteria the district—those having the least seniority—are solely based on the district’s and students’ first to be laid off. The state also specifies that no needs. junior employee can be retained if a more senior • If the district demonstrates a need for employee is “certificated or competent” to teach in specialized services that require a specific that position. For example, a district may decide course of study, special training or to eliminate its physical education program but experience (such as special education or all teachers working within that program might speech pathologists), it may develop a system not be laid off. If one of those teachers is more that gives higher priorities to teachers with senior and credentialed to teach in any other these credentials or types of experience. subject, for example math, he or she can replace a junior employee whose math position was not • The state also allows deviating from seniority being considered for elimination. This practice is for “maintaining or achieving compliance commonly known as “bumping,” whereby more with constitutional requirements related to senior employees bump junior employees down the equal protection of the laws.” seniority list because the senior teacher is able to Breaking Ties Amongst Employees With teach a junior teacher’s course. the Same Start Date. Virtually all districts must Districts Currently Have Some Discretion to break ties amongst employees—especially because Deviate From Seniority Order. Though the state districts often must focus on groups of employees requires inverse-seniority order as the primary that started around the same time. Some districts www.lao.ca.gov Legislative Analyst’s Office 15 An LAO RepOR t use random number assignment to decide which Using Equal Protection Clause. Chapter 498, employees with the exact same start date will be Statutes of 1983 (SB 813, Hart), amended the laid off. The majority of districts, however, use original 1976 teacher layoff statute to allow more refined criteria. As shown by the dark bars in districts to deviate from seniority-based layoffs Figure 6, our survey indicates districts commonly “for purposes of maintaining and achieving break ties by retaining teachers who have multiple compliance with constitutional requirements credentials and/or a language specialization. related to equal protection of the laws.” When Skipping Specialized Junior Employees. The this clause was added, the provision was intended majority of districts in our survey also report primarily to “ensure that the teaching force reflects developing criteria to “skip” junior teachers with the multicultural makeup of the state.” Since specialized credentials or experience. State law Proposition 209 (approved by voters in 1996) allows school districts to retain certain junior constitutionally banned discrimination against or employees if the district can prove certain types of preferential treatment of any individual or group trained and experienced teachers meet a specific on the basis of race, sex, color, ethnicity, or national need within the district. The most common types of origin in public employment—including public teachers protected under this skipping criteria are education employment—a district no longer can special education teachers and language specialists skip certain teachers during the layoff process in an (see the light bars in Figure 6). Whereas almost all effort to maintain cultural diversity. survey respondents develop tie-breaking criteria More Recent Interpretation of Equal (94 percent), about two-thirds of survey respondents Protection Clause. Districts recently have begun deviated from seniority to skip junior employees. to use the equal protection provision to skip Figure 6 Criteria School Districts Use When Breaking Ties and Skipping Junior Teachers Percent of Respondents Multiple credentials Language specialization/credential/certification Special education credential/certification Specialized training/experience in high-need program Math or science specialization/credential/certification Tie-Breaking Skipping Equal protection of the laws 10% 20 30 40 50 60 70 80 90 16 Legislative Analyst’s Office www.lao.ca.gov An LAO RepOR t certain teachers employed at certain schools teacher quality, with first- and second-year teachers serving disadvantaged students. In some instances, less effective, on average, than more experienced seniority-based layoffs result in some schools teachers. laying off a significant proportion of their teachers. . . . But Seniority Has Significant Drawbacks. Some public advocates have raised concern that Using seniority, however, has a number of such high proportions of layoffs in these schools, significant drawbacks. Basing employment coupled with other educational disadvantages, decisions on the number of years served instead cause major disruption for students and the quality of employees’ productivity and performance and continuity of their education program— can lead to lower quality of the overall teacher threatening students’ equal protection of the laws. workforce. State law allows school districts to Few Applications of Clause to Date. Of the adopt layoff practices that are in the best interest districts we surveyed, very few report exploring of students only when breaking start-date ties their discretion to deviate from seniority for the amongst employees. In all other cases, state law purpose of equal protection of the laws. Only values the protection of teachers who have served five districts reported having used this discretion the district for many years and ignores how well in developing criteria to break ties amongst teachers have served. While it is generally true employees with the same start date. Another four that newer teachers are less effective than more reported developing skipping criteria for this experienced teachers, not all new teachers are the purpose. For layoffs operative in the 2012-13, one least effective. In fact, the few academic studies district to date has ventured in this direction. San done on comparing layoffs based on performance Francisco Unified School District (SFUSD) recently rather than on seniority show little overlap exists conducted their first round of layoff determinations between the teachers who would be laid off under and used the equal protection clause to protect strict performance criteria versus seniority criteria. junior teachers in 14 schools they classify as The current seniority-based layoff policy also having high-need students with low academic causes disruption in schools. As we previously performance. (The ALJ will review whether SFUSD mentioned, senior employees are able to bump adequately implemented state layoff law in the junior employees at different school sites and coming weeks.) in different positions. Because of this, position eliminations in one school usually affect a number State values Seniority in Layoff Process of school communities and can disrupt staff teams Some Benefits to Using Seniority to Determine throughout the district. Layoffs . . . Using seniority on a statewide basis for California State Law Is More Prescriptive laying off staff has some benefits. Seniority is an Than Many Other States. Whereas 33 states allow objective, standard approach that is transparent their local education agencies (LEAs) to develop and easy to implement. All parties involved clearly their own layoff criteria, California—along with know what information is used to make layoff 13 other states—prescribe seniority as the primary determinations. Disagreements can be based only criteria districts must use to lay off personnel. on factual errors—for example, a district and In contrast, three states (Arizona, Colorado, employee disputing the day the employee officially and Oklahoma) require their LEAs to include started paid service with the school district. teacher performance as a factor in making layoff Seniority also can serve as a rough proxy for determinations. www.lao.ca.gov Legislative Analyst’s Office 17 An LAO RepOR t Recommend Exploring Alternatives to important personnel decisions, many districts do Seniority-Based Layoff Criteria not have such well-developed systems. Moreover, the state only collects information on a few of Explore Alternatives. Given the limitations these factors and some data collections (such as of using seniority as the primary factor in layoff contributions to school community) ultimately determinations, we recommend the state explore might be impractical for the state to pursue. alternatives that could provide districts with the Student performance data, on the other hand, discretion to do what is in the best interest of their already are collected at the state level and teacher students. Ideally, districts would use multiple quality data could be pursued with statewide factors in making layoff determinations—factors benefits beyond providing information to improve that result in the least harm to students, the overall the teacher layoff process (such as better investment teaching workforce, and the school community. of the state’s professional development funds and Some alternative factors districts could consider evaluation of teacher preparation programs). are: student performance, teacher quality, Finding Better Statewide Indicators for classroom management, teacher attendance and Teacher Quality as an Alternative to Seniority. truancy, leadership roles, contributions to school If the state could more confidently rely on teacher community, and degrees and specializations. quality information from districts, it might be able Consideration of such factors would help school to move in the direction of an improved statewide districts retain their highest quality teachers. teacher layoff process using teacher quality as the Virtually All of These Alternatives Currently primary criteria for layoff determinations. The state Are Impractical. Many of these factors could be could play a key role in helping districts develop considered at both the local and state level, but reliable teacher quality information. Specifically, it their statewide application currently is impractical. could encourage CDE to collect and disseminate This is because districts have varying capacities to district best practices on evaluating teacher maintain information on many of these factors, performance. Sharing best practices information with teacher evaluation and data collection from districts that have pioneered work in this practices varying throughout the state. Whereas area likely would have long-term benefits for many some districts have robust data and evaluation school districts that currently do not have the systems that could enable them to use performance capacity to evaluate their teachers robustly. evaluations objectively and fairly in making STATE invoLvEmEnT in LoCAL LAyoff dECiSionS Current Law under which districts can lay off staff, when they must notice staff, the criteria they must use State Assertive in Teacher Layoff Policy in determining who to lay off, and lastly how and Other Local Personnel Matters. Given that they must rehire teachers if their financial or very few districts have negotiated layoff terms in enrollment circumstances improve. The state’s their teachers’ contracts, the state layoff process role in layoff policy is not an exception. The state has become the de facto policy for the majority also asserts a relatively strong role in other local of school districts. As described in the overview personnel matters, including teacher assignments, section, the state prescribes the conditions 18 Legislative Analyst’s Office www.lao.ca.gov An LAO RepOR t compensation, and credentialing. In layoff be preventing more frequent and thoughtful negoti- policy, California is somewhat more prescriptive ations on this topic at the local level. Moreover, it is than other states, with the majority of states not clear that a state-imposed process is necessary allowing districts more latitude in making layoff to prevent undesired local district behavior. Some determinations. of the state’s primary goals in the layoff process State Law Contains Both State and Local are to prevent teachers from being unnecessarily Protections for Teachers. While the state plays an laid off, provide teachers with early information, assertive role in establishing a uniform statewide and protect students from midyear disruptions. layoff policy, it also provides protection of teachers’ These state values appear closely aligned with rights at the local level. The EERA established district goals in building their education program. teacher layoff policy as a mandatory negotiable Currently, districts have strong incentives not topic under certain circumstances. That is, a school to take disruptive midyear actions that would district and local bargaining unit must engage in negatively impact their students—including laying good-faith negotiations and mutually agree on off teachers and shuffling students to different procedures and criteria before a district can initiate classes while the school year is in progress. a locally designed layoff process. School districts Recommend Exploring other options and teacher unions largely have deferred to the state layoff process, which provides significant Carefully Assess Trade-Offs Between State protections for teachers, but state law is designed Involvement and Local Flexibility in Personnel to protect teachers whether the state process or a Matters. The state faces difficult trade-offs in locally developed process is used. deciding how involved it should remain in local personnel matters. If the state retains its current difficult Trade-offs in deciding State Role prescriptive role, it can help ensure that districts do State Involvement Helps Provide Uniform not make layoff decisions that are arbitrary, biased System. Determining personnel policies at the state against individual teachers, or based upon political level can ensure that all school districts adhere or personal motivations. On the other hand, the to a uniform set of rules. Currently, the state’s state recently has moved in the opposite direction layoff policy can help ensure that districts do not in a number of areas, including education. In make layoff decisions that are arbitrary. State law February 2009, the state removed many require- also requires school districts to use only objective ments associated with education categorical criteria when breaking ties, skipping, and bumping programs. Further moving in this direction, the teachers. Governor this year has proposed fundamentally State Control Might Be Unnecessarily restructuring how the state funds schools and Restrictive. By having a one-size-fits-all layoff providing districts significantly more flexibility policy, the state, however, could be unnecessarily and local discretion in structuring their education restraining districts from crafting better practices programs. The state also recently has shifted certain suited for their particular teacher and student state responsibilities to counties and cities in a populations. Given that EERA provides protection number of other areas of the state budget, including of teachers’ rights regarding layoffs through the criminal justice, mental health and substance abuse collective bargaining process, the state’s policy may programs, foster care, and child welfare services. be unnecessarily restrictive. Consequently, it could Along with these fundamental changes to the www.lao.ca.gov Legislative Analyst’s Office 19 An LAO RepOR t services the state provides and the requirements negotiate the layoff process in only limited circum- it chooses to impose on local governments, we stances, districts and unions currently might recommend the Legislature carefully reassess the be deterred from taking the time and effort to need for and benefits of its current prescriptive role establish their own layoff procedures. That is, under in school district personnel matters. current law, if districts did collectively bargain Consider Expanding Locally Negotiated layoff procedures in the few allowable areas, they Options. In addition, we recommend the state likely would be required to implement one set of consider expanding locally negotiated options layoff procedures in those areas and the state set under EERA to allow school districts and local of layoff procedures in all other cases. Negotiating bargaining units to negotiate the entire layoff such a bifurcated process is unnecessarily compli- process for any certificated staff under any appli- cated. Districts and unions could avoid this compli- cable circumstance. Because EERA is somewhat cation if allowed to negotiate the layoff process for restrictive in allowing districts and unions to all applicable situations. SummARy Figure 7 summarizes our major findings and . . . And Lasting Benefits. Though some of recommendations. our recommendations could provide immediate Recommendations Could Provide Immediate benefits, our package of recommendations is Benefits . . . Though initial notices already have designed to improve the layoff process on a lasting been sent to teachers who might be laid off for the basis. As many districts continue to experience coming school year, some of our recommendations declining enrollment, some districts continue to could improve the process almost immediately. face fiscal difficulties, and the economy continues Though the March 15 date has passed, the to experience booms and busts, teacher layoffs Legislature could consider moving the final will remain a common issue of concern in the notification date from May 15 to our recommended coming years. By changing notification deadlines, date of August 1. This would give districts the streamlining the administrative oversight process, benefit of having information on the final state and exploring alternatives to seniority-based budget package prior to finalizing their layoff layoffs, we believe the state would improve the decisions. Moreover, if the Legislature adopted existing layoff system significantly. Furthermore, our recommendation to replace the August layoff we think the overall education system could benefit window with a rolling emergency window, school moving forward from a reassessment of the state’s districts might find that they could lay off fewer role in local personnel matters, with the state teachers now—knowing that a post-election dedicating its efforts to those limited areas in which window subsequently could be available. school districts lack sufficiently strong incentives to uphold statewide public values. 20 Legislative Analyst’s Office www.lao.ca.gov An LAO RepOR t Figure 7 Summary of LAO Findings and Recommendations Layoff Provision Current Law Finding Recommendation Time Line for Layoff • Requires initial layoff • Districts significantly over notify. • Authorize June 1 as deadline for Notifications notifications to be distributed • “Contingency” layoff window initial notifications and August 1 by March 15 and layoffs to be in August is not particularly for final layoffs. implemented by May 15. helpful. • Provide a rolling, 45-day emergency layoff window. Hearing and Appeals • Requires administrative • Teachers receive more • Replace teachers’ right to auto- Process oversight of districts’ protections than other public matic hearing with a streamlined implementation of state layoff employee groups. alternate process that ensures: policy and provides teachers the • Administrative process for lay- (1) all relevant information is right to a hearing. ing off teachers adds some presented to the Office of value but is costly. Administrative Hearings for review and (2) both district and bargaining unit have opportunity to review information. Selection Criteria • Requires inverse-seniority order, • The selection criteria specified • Explore alternatives to resulting in a last-hired, in California state law is more seniority-based layoffs. first-fired policy. prescriptive than many other • Encourage California • Allows districts some discretion states. Department of Education to to deviate from seniority order. • State values seniority more collect and disseminate district than alternative criteria in layoff best practices on evaluating process. teacher performance. State Involvement • Leads to state involvement • State involvement might be • Assess trade-offs between state in virtually all districts’ layoff ensuring fair and uniform involvement and local flexibility practices. system, but it also might be in personnel matters. • Contains both state and local unnecessarily restrictive. • Consider expanding locally protections for teachers. negotiated options. www.lao.ca.gov Legislative Analyst’s Office 21 An LAO RepOR t 22 Legislative Analyst’s Office www.lao.ca.gov AppenDIX APPEndix 1. From the list below, please select each of the years in which your district undertook a “Reduction in Force” (RIF) teacher layoff process. (For example, checking the 2008-09 box indicates your district undertook a layoff process in 2007-08 in preparation for the 2008-09 school year.) Percent of Respondents Response 2008-09 2009-10 2010-11 2011-12 Districts that undertook the teacher 47% 64% 53% 35% layoff process 2. If your district undertook a RIF process in any of the past four years, select the primary reason(s) your district needed to lay off teachers. Please select all that apply. Percent of Reasons Districts Needed to Lay Off Teachers Respondents Reduction in a particular kind of service 63% Declining enrollment 48 Declining enrollment specifically due to the termination of an 3 interdistrict transfer agreement Modification to state-required curriculum 1 3. If your district undertook a RIF process in any of the past four years, please select the month(s) in which your district typically made each of the following RIF decisions. Percent of Decision Most Common Time in the School Year Respondents Developed seniority list September - December of prior 44% (planning) school year First determined that layoffs were needed January of prior school year 49 Determined particular services to reduce January of prior school year 40 Determined “skipping” and tie-breaking criteria February of prior school year 39 Finalized how many layoff notices to issue February of prior school year 50 Held administration law judge (ALJ) hearings April of prior school year 47 Made final school board decisions based on ALJ May of prior school year 46 recommendations Laid off teachers May of prior school year 46 Began rehiring July - August before affected school year 48 (in which layoffs are effective) Completed rehiring July - August before affected school year 50 (in which layoffs are effective) www.lao.ca.gov Legislative Analyst’s Office 23 AppenDIX 4. If your district has deviated from implementing layoffs in order of seniority, please select all of the criteria your district typically has used to “skip” any junior employees. The junior employee: Percent of Criteria Respondents Has a special education credential and/or certification. 51% Has a language specialization-credential and/or certification (for example, BCLAD). 35 None, my district does not deviate from seniority order. 27 Has multiple credentials. 26 Has specialized training and/or experience in high-need program (for example, AP, AVID 25 program, GATE certification). Has a math/sciences specialization-credential and/or certification. 24 Needs to be retained to ensure equal protection (for example, the junior employee teaches in a 2 severely underperforming and/or high-poverty school). BCLAD = Bilingual, Crosscultural, Language, and Academic Development; AP = Advanced Placement; AVID = Advancement Via Individual Determination; and GATE = Gifted and Talented Education. 5. If two or more employees began paid service on the same date, please select all of the criteria your district has typically used to break service-time ties. One employee: Percent of Criteria Respondents Has multiple credentials. 77% Has a language specialization-credential and/or certification (for example, BCLAD). 69 Has a special education credential and/or certification. 49 Has specialized training and/or experience in high-need program (for example, AP, AVID 36 program, GATE certification). Has a math/sciences specialization-credential and/or certification. 31 None, my district did not notify two or more employees that began paid service on the same date. 6 Needs to be retained to ensure equal protection (for example, the junior employee teaches in a 3 severely underperforming and/or high-poverty school). BCLAD = Bilingual, Crosscultural, Language, and Academic Development; AP = Advanced Placement; AVID = Advancement Via Individual Determination; and GATE = Gifted and Talented Education. 6. How many days did your administrative law judge (ALJ) hearing(s) last? Please include the total number of days for the most recent RIF process. Response Days Average number of days 1.4 Average number of days for nine “very 8.6 large” districts Range 0-45 24 Legislative Analyst’s Office www.lao.ca.gov AppenDIX 7. Approximately what percentage of initially noticed teachers attended and/or testified at your ALJ hearing(s)? Please include the percentage for the most recent RIF process. Percent of Response Teachers Average percentage of teachers that attended and/or testified at 37% ALJ hearing Average weighted by number of initially noticed teachers 32 ALJ = administrative law judge. 8. Approximately what percentage of cases (notifications) were resolved prior to your ALJ hearing(s)? Please include the percentage for the most recent RIF process. Percent of Response Cases Average percentage of cases resolved prior to ALJ hearings 41% Average weighted by number of initially noticed teachers 25 ALJ = administrative law judge. 9. For each of the following pairs of statements, please select the one that best reflects the situation within your district even if neither is exactly right. Percent of Response Respondents Clerical errors on the seniority list are resolved prior to the hearings. 95% Clerical errors on the seniority list are resolved during the hearings. 5 My district has developed its seniority list over the past several years. 96 My district just developed its seniority list this year. 4 My district’s local bargaining unit typically minimizes the number of cases contested and/or 58 teachers testifying during the hearings. My district’s local bargaining unit typically contests most notifications and/or requests most 42 notified teachers to attend/testify during the hearings. www.lao.ca.gov Legislative Analyst’s Office 25 AppenDIX 10. Based on your district’s experience with teacher layoffs over the past four years, how often are the ALJ’s recommendations different from your district’s initial layoff determinations? Percent of Response Respondents Never 65% Rarely 28 Sometimes 6 Always 1 11. Based on your district’s experience with teacher layoffs over the past four years, how often does your governing board reject the ALJ’s recommendations? Percent of Response Respondents Never 90% Rarely 8 Sometimes 1 Often 1 12. For each of the years listed below, please estimate the number of full-time equivalent teachers involved in each stage of your district’s RIF process. Percent of All Percent of Initially Teachers Initially Noticed Teachers Percent of Laid Off Year Noticed Laid Off Teachers Rehired 2008-09 11% 47% 43% 2009-10 9 47 66 2010-11 11 49 53 2011-12 4 60 96 Over four years 9 49 57 26 Legislative Analyst’s Office www.lao.ca.gov AppenDIX 13. Please provide ballpark estimates of the costs associated with the following activities for your most recent RIF process. Per-Noticed- Teacher Cost Cost (In Dollars) Estimate of district personnel costs (including costs associated with time spent by human $324 resources directors, support staff, and other administrators in preparing and implementing the RIF process) Estimate of legal fees/costs 244 Estimate of substitute teacher costs (to replace teachers that participate in hearings or 104 other RIF activities) Estimate of costs associated with notification mailings (including preparation for mailing) 34 Total $706 RIF = Reduction in Force. www.lao.ca.gov Legislative Analyst’s Office 27 An LAO RepOR t LAo Publications This report was prepared by Jeimee estrada and reviewed by Jennifer Kuhn. The legislative Analyst’s office (lAo) is a nonpartisan office that provides fiscal and policy information and advice to the legislature. To request publications call (916) 445-4656. This report and others, as well as an e-mail subscription service, are available on the lAo’s website at www.lao.ca.gov. The lAo is located at 925 l street, suite 1000, sacramento, CA 95814. 28 Legislative Analyst’s Office www.lao.ca.gov