Subcontracting Management?

One public school district in the State of Michigan has chosen not to renew the employment of several top administrators, retaining them instead as independent contractors. In essence, the District is outsourcing or subcontracting for these administrative management services. As reported in the Ann Arbor News, the District expects to realize a savings of over $100,000, per year, due to the elimination of all costs associated with health care and other fringe benefits for these employees. Is this a unique situation, or will this be the beginning of a trend? Public school districts, as well as boroughs, townships, etc., already contract out a number of other professional services, such as legal, engineering, and architectural services. While the day-to-day attention required from a top administrator may require a slightly different arrangement than would be used for solicitors, engineers, etc., it may be just as possible to hire independent contractors for administrators services as it is for other professional consultants. You should be aware, however, that there may be legal implications involved in a decision to move to independent contractors. For example, the employment of an independent contractor must be discussed in public and is not a proper subject for executive session, since the independent contractor is not an employee and the discussion therefore does not fit into the Sunshine Law’s executive session criteria. As always, if your public entity is looking to make any changes to its employment structure, feel free to contact me with questions.

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