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K12, ACA, and Outsourcing- Part 1 of a 2 part series

Today’s guest blogger is Adam Brittain.  Adam received his MPA from the University of Colorado-Denver, where he helped launch the state’s flagship welfare fraud program. A former auditor, Adam now serves the public sector as a Principal Consultant at Kronos.

Some school districts are considering outsourcing all teachers’ assistants, substitutes, and other variable hour employees to staffing firms or agencies (agency), while others are just considering outsourcing substitutes. Such controversial measures are being considered as a potential strategy to comply with a controversial law.
Support for outsourcing is mostly financial- for what is advertised as a fraction of the cost of offering benefits, paying penalties, or both- districts can pay a fee to an agency who will furnish substitutes. However, there is a student achievement angle as well, whereby districts choosing to limit substitute hours may see a dip in student achievement when a long-term sub is needed (but their hours are capped). Substitute teacher agencies are outwardly focused on supporting district educational plans and maintaining continuity of instruction of the classroom.
Opposition to such plans varies- but appears to be largely rooted in the human realm, rather than the financial. Variable hour employees are used to getting a specific type of benefit package from the districts they work in, which usually includes more than just the opportunity to purchase health insurance (think retirement, time off when the schools are closed, and working for the same employer as everyone else in the building). Principals may be wondering how easy it will be to obtain a qualified resource when they need it, or whether they will be able to continue to access their favorite substitutes once they have ceded control to an outside firm.
There is, however, more to it than that. Under common-law rules, which have been developed to determine whether an employer-employee relationship exists, employees provided by agencies have largely been considered to be employees of the agency, and not the client. Would school districts be willing to cede their right to personally discharge a substitute who performs unsatisfactorily? The substitute would technically be an employee of the agency and not the school. What if the district wishes to engage a substitute over a long period of time to cover maternity leave? Since duration of relationship is a factor in common-law determination, would this be a consideration for long term substitute assignments?
Also, districts moving to an agency model solely to avoid the implications of ACA may find this strategy backfires, as the district may ultimately be considered the employer (and not the agency), which would land them back at square one.
What are the pros and cons to this approach? How is your district acting to avoid a gut-check reaction to the new regulatory landscape?

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