Frequently Asked Questions – Employee Compensation
What categories of employees does the District hire, and how are they organized?
Three different associations represent many of the District’s employees. They are:
Billings Education Association – represents certified employees, such as teachers, counselors, and nurses.
Billings Classified Education Association – represents classified employees, such as accountants, technicians, specialists, para-professionals, clerks, and secretaries.
Montana Public Employees Association – represents custodial, maintenance, and warehouse employees.
There are two groups of employees who are not members of an association and with whom the District does not engage in collective bargaining. They are:
Administrators – certificated and classified.
Administrative Support Personnel – administrative assistants, benefits technician, HR manager, HR assistants, HR clerk, budget analyst, payroll manager, payroll accountants, payroll clerk, special education bus assistant manager.
What are the components of an employee’s total compensation?
An employee’s total compensation is reflected in salary, wages, health benefits, and other benefits and services provided by the District. The District provides the following to all qualifying employees in full or prorated amounts based upon their full-time equivalency (FTE) of employment.
Base Salary – hourly or salaried. For example, teachers receive an annual salary based upon their assigned workday (.20 FTE to 1.0 FTE) and their number of workdays (typically and maximum of 180 student days and 7 professional development days –PIR = 187 contract days). Classified employees receive an hourly rate multiplied by the number of hours they work in a year.
Teachers – Advance on the salary schedule each year by virtue of having completed a year of employment. This is called “Step Movement.” Additionally, teachers may advance on the salary schedule by accumulating additional credit hours or degrees beyond their bachelor’s degree. This is called “Lane Movement.” The specifics regarding both of these advancements are subject to negotiations.
Teachers also receive an additional annual $1,500 for an earned Master’s degree, $2,000 for an earned Doctorate degree, and $2,000 for an earned National Board Teaching Certificate.
Classified – Qualifying employees receive a longevity wage increase per hour.
Health Benefits – the District provides each qualifying employee with health, dental, life ($50,000), and disability insurance. On a prorated basis, the District provides the full cost of a single health and major medical and dental insurance. This equates to a $6,732 value for July 1, 2010 through June 30, 2011. (Note: The District’s Health Benefits Committee is projecting a 6.5% increase in costs for the same coverage for July 1, 2011 through June 30, 2012. This annual rate is now projected at $7,170. This is an item that the parties may discuss during negotiations.)
Teacher Retirement Service or Public Employees Retirement Service – the District contributes to the State’s retirement plans to ensure the viability of the plans for every retiree. The District contributes monthly to the plans based upon the applicable monthly salary of each employee. For TRS the monthly percentage is 7.47%; for PERS the monthly percentage is 6.80%.
Social Security – the District contributes to the U. S. Social Security Fund at the same percent, as does each employee. Based upon the applicable monthly salary of each employee the District contributes 6.20% monthly.
Medicare - the District contributes to Medicare at the same percent, as does each employee. Based upon the applicable monthly salary of each employee the District contributes 1.45%% monthly.
Workers Compensation – the District contributes a percent of each employee’s monthly salary to ensure adequate funding to provide an employee with an income in the event the employee is injured on the job. Based upon the applicable monthly salary of each employee the District contributes 0.508% monthly. (Note: This is the amount for the BEA; the amount varies for the different categories of employees.)
Unemployment - the District contributes a percent of each employee’s monthly salary to ensure adequate funding to provide an employee with an income in the event the employee is laid off. Based upon the applicable monthly salary of each employee the District contributes 0.17% monthly.
Sample Teacher – Total Compensation for 2010-11 School Year
Lane MA15 / Step 11 $56,842
MA additional $ 1,500
Health Benefits $ 6,732
Retirement $ 4,358
Social Security $ 3,617
Medicare $ 846
Workers Comp. $ 296
Unemployment Ins. $ 99
Total Annual Compensation $74,290*
*Many teachers earn additional income from serving as department chairs, coaches, sponsors, directors, working additional hours, curriculum work, teaching summer school, etc.
Mileage Reimbursement – the District reimburses employees at $0.51 per mile for each mile they drive their vehicles in the course of performing their job. This does not include mileage driving to or from work/home.
Stipends – the District provides annual stipends (paid proportionally on a monthly basis) to employees who serve outside of their “regular” position. For example, all coaches receive stipends for coaching a sport team, as does the forensics coach, and marching band instructor.
Leaves with Pay– the District provides qualifying employees with a variety of leaves, which have a compensation value. These leaves ensure that the employee continues to receive compensation while they are not at work, as long as the approved leave continues. Leaves include:
Holidays - Qualifying employees receive up to 17 paid holidays per year.
Vacation Leave – Qualifying employees receive 15 or more vacation days with pay per year. (Number of days depends on number of years of service.)
Sick Leave – Qualifying employees receive 12 working days of sick leave with pay for each year each year of service, and may accumulate them without limitation. An employee who terminates employment with the District is entitled to a lump sum payment equal t one-fourth of the pay attributed to the accumulated sick leave.
Critical Family Illness Leave – Qualifying employees may use up to 3 working days of CFI leave with pay for each incident.
Personal Leave – Qualifying employees may take up to 2 days of personal leave with pay each year.
Bereavement Leave – Qualifying employees may take up to 5 days of bereavement leave with pay for each death of a family member.
Legal Leave – Qualifying employees may take leave with pay for the purpose of complying with an order that legally requires the presence of the employee.
Jury Duty Leave - Qualifying employees may take leave with pay for the purpose of complying with an order that legally requires their service on a jury.
How does the District determine compensation for its employees?
The District negotiates all issues of compensation with the BEA, BCEA, and MPEA. Specific collective bargaining agreements control salary (including step and lane advancement and longevity pay), stipends, health benefits, sick leave, critical family illness leave, personal leave, bereavement leave, and legal leave.
State statute and/or federal laws control vacation leave and accumulation, as well as jury leave, retirement service, social security, Medicare, workers compensation, unemployment insurance, and mileage reimbursement.
How much does the District spend on total compensation? How much comes from the General Fund Budget?
For all funds throughout K-12 the District spends $114,236,018 on salaries and benefits. From the General Fund alone, the Elementary District spends $54,543,333 on salaries and benefits, and the High School District spends $31,417, 830 on salaries and benefits.
What is the current salary schedule for each represented group?
Please refer to the salary schedule link for copies of the salary schedules for each represented employee group.
How much has the salary for employees increased since 2000?
The total General Fund cost for salaries for the Elementary and High School districts increased from $52,052,234 in 2000 to $78,320,645 in 2011. The represents more than a 50% increase, with the average FTE salary increasing from $33,431 to $53,939 plus health benefits and statutory benefits.
How much has the cost of health and medical insurance increased since 2000?
In 2000 the cost for each full-time qualifying employee’s health benefits was $2,855. In 2011 the cost is $6,732 and in 2012 the District estimates that the will be $7,170. This represents an increase of over 250% in district-provided health benefits from 2000 to 2012.
What is salary lane advancement and for what types of credits do teachers receive lane advancement?
Teachers may advance on the salary schedule by accumulating additional credit hours or degrees beyond their bachelor’s degree. This is called “Lane Movement.” The specifics regarding this advancement are subject to negotiations. Teachers may use continuing education units, non-college technical course work, and college/university course work for advancement.
What is salary step advancement and how does a teacher receive step advancement?
Teachers advance on the salary schedule each year by virtue of having completed a year of employment with the District. This is called “Step Movement.” The specifics regarding this advancement are subject to negotiations.
How does teacher compensation in Billings compare with teachers in the other AA school districts?
For FY 12, what is the estimated cost of step and lane advancement and longevity (0% increase to the base salary) for employees?
For the 2011-12 school year, the estimated costs for step, lane, and longevity movement for all qualifying employees are:
Elementary District $917,387
High School District $483,798
What makes up the severance package for teachers? for administrators?
A service package, also called service credit, is available for teachers who have worked for the District a minimum of 10 years, but not more than 35 years. Upon terminating employment (resigning or retiring), an eligible teacher receives the following payment:
a) $100 per year for years of service prior to June 30, 1986
b) 2.5 days multiplied by each year of service after July 1, 1986 multiplied by the teacher’s daily rate of pay at the time of termination (daily rate of pay is for the normal teaching contract only; it does not include stipends, extended employment, etc.)
c) total days of accrued sick leave multiplied by 25% multiplied by the teacher’s daily rate of pay at the time of termination
Example: The following example is for a teacher who in 2010-11 earned $56,842 in base salary. At the time of termination the teacher completed 30 years of service to the District, and accrued 180 days of sick leave.
a) 5 years of service prior to June 30, 1986 multiplied by $100 $500.00
b) 2.5 days multiplied by 25 years of service (after 1986)
multiplied by the daily rate ($56,842 divided by 187 days
equals $303.97) $18,998.13
c) 180 days of accrued sick leave multiplied by 25%
multiplied by the teacher’s daily rate ($303.97) $13,678.65
Total Severance Package (Service Credit) $33,176.78
NOTE: If the teacher notifies the District of intent to terminate
prior to March 1 of the applicable year, the teacher receives a
5% bonus. ($33,176.78 plus 5%) $34,835.62
The teacher has two options with regard to this severance amount:
1. The teacher may accept the amount as ordinary income, paying all applicable taxes and deductions, and use the money in any manner of the teacher’s choosing.
OR
2. The teacher may accept the amount as ordinary income, paying all applicable taxes and deductions, and use the money to purchase additional service credit with the Teachers’ Retirement System, which would increase the teacher’s monthly pension for life. Should the teacher elect this choice, the District must pay into TRS as well as follows:
a) Total Severance Package Amount $34,835.62
b) Multiplied by a unique employer contribution rate (%)
based upon each teacher’s age, years of service, and
compensation (3.50% in this example) x 3.5%
c) Multiplied by the teacher’s years of service (30 years
in this example) x 30 years
District Payment to TRS for Teacher` $36,577.40
Total Cost to District for Severance Package (Teacher Example) $71,413.02
District and school administrators are also eligible for a severance package (service credit) at the time of their termination. All of the components noted above for teachers apply to administrators also, with an additional component for accrued vacation. Administrators receive a component that pays them their daily rate of pay for each day of accrued vacation up to a maximum of 60 days.
Example: The following example is for a high school principal who in 2010-11 earned $101,760 in base salary. At the time of termination the principal completed 30 years of service to the District, and accrued 180 days of sick leave, and accrued 60 days of vacation.
a) 5 years of service prior to June 30, 1986 multiplied by $100 $500.00
b) 2.5 days multiplied by 25 years of service (after 1986)
multiplied by the daily rate ($101,760 divided by 255 days
equals $399.06) $24,941.25
c) 180 days of accrued sick leave multiplied by 25%
multiplied by the principal’s daily rate ($399.06) $17,957.70
d) 60 days of accrued vacation leave multiplied by the
the administrator’s daily rate ($399.06) $23,943.60
Total Severance Package (Service Credit) $67,342.55
NOTE: If the principal notifies the District of intent to terminate
prior to March 1 of the applicable year, the administrator receives a
5% bonus. ($67,342.55 plus 5%) $70,709.68
The principal has two options with regard to this severance amount:
1. The principal may accept the amount as ordinary income, paying all applicable taxes and deductions, and use the money in any manner of the principal’s choosing.
OR
2. The principal may accept the amount as ordinary income, paying all applicable taxes and deductions, and use the money to purchase additional service credit with the Teachers’ Retirement System, which would increase the principal’s monthly pension for life. Should the principal elect this choice, the District must pay into TRS as well as follows:
a) Total Severance Package Amount $70,709.68
b) Multiplied by a unique employer contribution rate (%)
based upon each employees’ age, years of service, and
compensation (3.50% in this example) x 3.5%
d) Multiplied by the employee’s years of service (30 years
in this example) x 30 years
District Payment to TRS for Employee $74,245.16
Total Cost to District for Severance Package (Principal Example) $144,954.84
What are national trends/responses to the budget deficit challenge with regard to teacher compensation?