A Capehart Scatchard Blog

Elimination of Salary Caps for Superintendents of Schools Signed Into Law Effective Immediately

By on July 31, 2019 in Labor & Employment with 0 Comments

By: Cameron R. Morgan, Esq.
Editor: Sanmathi (Sanu) Dev, Esq.

On July 19, 2019, Governor Murphy signed new legislation, L. 2019, c. 169 (S-692 / A-3775), which eliminated the cap on maximum base salaries for superintendents of schools which had been in effect since February 2011.  At time of the new law’s passage, subject to several potential modifications allowable under law, the salary cap levels had been set by administrative regulations of the Commissioner of Education at $147,794 for schools districts with enrollments of 749 students or less, $169,689 for districts with enrollments of 750 to 2,999, or $191,584 for districts with enrollments of 3,000 students or more.  The new law expressly provides that the New Jersey Department of Education “shall not regulate the maximum salary amount a board of education may provide to a superintendent of schools, pursuant to an employment contract.”

In addition to repealing the salary caps, the legislation codified into statute the current standards under which superintendent contracts are reviewed by the Executive County Superintendent (“ECS”).  The legislation incorporates into the statute the existing standards of the accountability regulations, N.J.A.C. 6A:23A-3.1(e), governing ECS review of superintendents’ employment contracts and restrictions on various types of contractual provisions, including limits on payments of salary upon separation from service, payments for unused accumulated sick leave upon retirement, payments for accumulated vacation days at the time of separation, the prohibition on supplemental or duplicate fringe benefits, car allowances, travel costs and mileage reimbursements, additional compensation for attaining a graduate degree, and other forms of compensation. 

The legislation also maintained and codified existing provisions of the accountability regulations permitting superintendent contracts to include merit bonuses of up to 15% of base salary in each contract year, through no more than three quantitative merits bonuses of 3.33% each and no more than two qualitative merit bonuses of 2.5% each.  Payment of those bonuses remain subject to approval by the ECS each year.  The provision that the calculation of the per diem rate for 12-month employees, such as superintendents, be based on a 260-day work year is also included in the statute. 

The new statute did not expressly address various other types of salary increments available to superintendents under the provisions of the definitional section of the accountability regulations, N.J.A.C. 6A:23A-1.2, including the current $5,000 “additional administrative position salary increment” for holding more than one administrative position, the $15,000 “additional school district salary increment” for serving more than one school district, or the $5,000 additional “high school salary increment.”  As the Department of Education revises those regulations to remove the caps, school districts will be on the lookout for guidance on whether the Department intends to permit these provisions to remain as among the various regulated forms of “extra compensation,” or whether the Department will view them as extensions of base salary that must be removed from the accountability regulations in accordance with the new statutory mandate that it “shall not regulate the maximum salary amount” of superintendents. 

At the heart of this reform was an ongoing concern that the cap on superintendent salaries had resulted in increased turnover and a decline in the level of experience among superintendents.  Opponents of the cap argued that many areas around the State have seen their most experienced superintendents retire from their school districts either in anticipation of the cap, or as a result of it having gone into effect.  School board members, board attorneys, and interested statewide organizations have observed an apparent uptick in the use of interim superintendents, as experienced chief school administrators who have already retired but may serve by statute for a period of no more than two years, during the period the cap has been in effect.  With the elimination of the cap and the return of local control over superintendent salaries, school board members will now have greater flexibility in weighing how best to attract top tier talent among chief school administrators for the children of their district, while at the same time remaining vigilant over the use of public funds.


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