Notwithstanding any provision of the Revised Code to the contrary, a municipal school district shall be subject to this section instead of sections 3317.13, 3317.14, and 3317.141 of the Revised Code.

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(A) As used in this section, “principal” includes an assistant principal.

(B) The board of education of each municipal school district annually shall adopt a differentiated salary schedule for teachers based upon performance as described in division (D) of this section. The board also annually shall adopt a differentiated salary schedule for principals based upon performance as described in division (D) of this section.

For each teacher or principal hired on or after October 1, 2012, the board shall determine the teacher’s or principal’s initial placement on the applicable salary schedule based on years of experience and area of licensure and any other factors the board considers appropriate. For each teacher hired prior to October 1, 2012, the board shall initially place the teacher on the applicable salary schedule so that the teacher’s annual salary on the schedule is comparable to the teacher’s annual salary for the school year immediately prior to the school year covered by the schedule. For each principal hired prior to October 1, 2012, the board shall initially place the principal on the applicable salary schedule consistent with the principal’s employment contract.

(C) The salary of a teacher shall not be reduced unless such reduction is accomplished as part of a negotiated collective bargaining agreement. The salary of a principal shall not be reduced during the term of the principal’s employment contract unless such reduction is by mutual agreement of the board and the principal or is part of a uniform plan affecting the entire district.

(D) For purposes of the schedules, the board shall measure a teacher’s or principal’s performance by considering all of the following:

(1) The level of license issued under section 3319.22 of the Revised Code that the teacher or principal holds;

(2) In the case of a teacher, whether the teacher is a properly certified or licensed teacher, as defined in section 3319.074 of the Revised Code;

(3) Ratings received by the teacher or principal on performance evaluations conducted under section 3311.80 or 3311.84 of the Revised Code;

(4) Any specialized training and experience in the assigned position.

(E) The salary schedules adopted under this section may provide for additional compensation for teachers or principals who perform duties, not contracted for under a supplemental contract, that the board determines warrant additional compensation. Those duties may include, but are not limited to, assignment to a school building eligible for funding under Title I of the “Elementary and Secondary Education Act of 1965,” 20 U.S.C. § 6301 et seq.; assignment to a building in “school improvement” status under the “No Child Left Behind Act of 2001,” as defined in section 3302.01 of the Revised Code; teaching in a grade level or subject area in which the board has determined there is a shortage within the district; assignment to a hard-to-staff school, as determined by the board; or teaching in a school with an extended school day or school year.

(F) The chief executive officer of the district, or the chief executive officer’s designee, annually shall review the salary of each teacher and principal and make a recommendation to the board. Based on the recommendation, the board may increase a teacher’s or principal’s salary based on the teacher’s or principal’s performance and duties as provided for in divisions (D) and (E) of this section. The performance-based increase for a teacher or principal rated as accomplished shall be greater than the performance-based increase for a teacher or principal rated as skilled. Notwithstanding division (C) of this section, division (C) of section 3319.02, and section 3319.12 of the Revised Code, the board may decrease the teacher’s or principal’s salary if the teacher or principal will perform fewer or different duties described in division (E) of this section in the school year for which the salary is decreased.

(G) Notwithstanding any provision to the contrary in Chapter 4117 of the Revised Code, the requirements of this section prevail over any conflicting provisions of a collective bargaining agreement entered into on or after October 1, 2012. However, the board and the teachers’ labor organization shall negotiate the implementation of the differentiated salary schedule for teachers and may negotiate additional factors regarding teacher salaries, provided those factors are consistent with this section.