Differentiated Pay

In June 2013, the State Board of Education passed a revised set of guidelines pursuant to Tenn. Code Ann. §49-3-306(h), which requires districts to create and implement differentiated pay plans.  The intent of the differentiated pay plans is to give local control to districts in regard to salary schedule, and to create another lever for districts to attract and retain teachers based on a flexible set of potential criteria.  A complete copy of the policy can be found here.


Tennessee Consolidated Retirement System (TCRS) letter regarding differentiated pay and earnable compensation

2014-15 Differentiated Pay Plan Submission Template In accordance with the revised State Board of Education policy that requires all districts to implement differentiated pay plans beginning in the 2014-15 school year, here is the submission document for all differentiated pay plans. The timeline for the submission of these plans can be found on the first two pages of the document.

Differentiated Pay Resource Guide

Webinar Recordings

To watch a webinar, follow the link below to install the free AT&T Connect software and play the recording.

Compensation Accelerated Planning Cohort Sessions

Frequently Asked Questions

Is the differentiated pay plan policy a new policy?

State law [T.C.A § 49-3-306(h)], adopted by the General Assembly in 2007, already requires school districts to adopt and implement differentiated pay plans to aid in staffing hard to staff subject areas and schools and attracting and retaining highly qualified teachers. However, this law has never been enforced. Beginning in the 2014-15 school year, the department will begin to enforce this law, and the increased flexibility provided by the new salary schedule will assist districts in meeting this requirement.

Does the differentiated pay plan policy mandate pay for performance?

The differentiated pay plan policy does not mandate pay for performance. However, the revised differentiated pay plan policy prevents districts from basing across-the-board pay increases solely on years of experience or advanced degrees. Districts must differentiate teacher compensation based on at least one additional criterion. Differentiated pay criteria can include any of the following: additional roles or responsibilities, hard-to-staff schools or subject areas, and performance based on State Board approved teacher evaluation criteria.

Will base pay changes and bonuses awarded through a district’s differentiated compensation plan count toward retirement benefits through TCRS?

he department reached out to the Tennessee Consolidated Retirement System (TCRS) to get further guidance on this issue. TCRS stated that TCA § 8-34-101(14)(B)(i)(b) dealing with “Earnable Compensation” governs this issue. If the bonus is available to all teachers (even though it may be up to the teacher to qualify for the actual funds) or if the bonus is offered to a broad class of employees (such as math teachers), then the bonus should be reported to TCRS and employee/employer contributions withheld. The bonus will be included in the calculation of retirement benefits if within the average final compensation (AFC).

Who will approve differentiated pay plans?

According to T.C.A § 49-3-306(h), the Tennessee Department of Education has approval authority of the differentiated pay plans.

Are there any guidelines around how differentiated pay plans will be approved?

The department will approve differentiated pay plans based on the criteria listed in the State Board policy. Complete information regarding required documents for submission will be shared with districts on October 22, 2013.

TN Teacher Compensation Tool 

The Tennessee Online Compensation Design Tool is an optional resource to assist districts in designing their differentiated pay plans. Each district has a unique access code which can be requested by emailing Compensation.Questions@tn.gov.

Last Update: July 21, 2014