Charlotte-Mecklenburg Schools is reviewing whether a payroll program used by teachers still complies with state law following recent changes, and officials say they’re waiting for guidance from the state Department of Public Instruction.
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Board member Charlitta Hatch previously asked district officials to assess whether the payroll plans comply with state law. CMS officials say a recent change to a program many teachers use to manage their paychecks has complicated that review.
CMS typically pays teachers on a 10-month schedule. State law requires school districts to offer an option that allows employees to spread their pay across 12 months, ensuring they continue receiving income during the summer.
CMS says the district, like most others in the state, has historically met that requirement through the State Employees’ Credit Union’s Summer Cash program. Under the program, employees could opt to have a portion of their wages deducted from their paychecks and sent to SECU, which would hold the money and pay it out over the summer.
CMS Chief Finance Officer Kelly Kluttz told the board in September that this arrangement with an outside provider was necessary because while state law mandates the 12-month payroll deduction option, it also prohibits school districts from withholding state funds that they're required to spend. Under the SECU arrangement, employees elect to have SECU withhold the funds instead.
But the credit union recently changed the program to give employees their full wages on the 10-month schedule alongside the option to direct some of it to separate savings accounts themselves.
Beth Thompson, CMS chief strategy and innovation officer, told the board Tuesday that the state is reviewing the change and is expected to provide guidance on whether the revised program still complies with state law.
"Because the district no longer withholds or diverts wages from payroll for later distribution, the revised arrangement appears to differ from the payroll deduction mechanism contemplated by state law, even though they produce a similar financial outcome for employees," Thompson said.
Most school districts use the SECU program, and Kluttz told the board in September she believes many are unaware of the change and its implications.
Thompson said CMS is also surveying employees about their interest in a 12-month payroll option.
