Red Shirting is the practice of holding late birthday kids back so that they benefit from being the oldest in the class. There is always heated debate about if it is really a good idea or not. My kids (girls) have late Nov. birthdays and I was clueless -and desperate to get them into free kindergarten. They started K as old fours and never looked back. In general, someone has to be the youngest, no matter what the cutoff date. It is very important that there not be too large an age spread in the k classroom. For a child who is appears to be fairly school ready, being younger isn't really an issue in my experience. The problem is that there are exceptions; very small or shy kids, or kids with other special needs who really may not be ready. I really feel for these families, who are not trying to give their kids some imaginary edge, but are really fighting for what is necessary for their children to thrive in their first academic year.
Placement at K used to be at the discretion of the principal and they would often take their cue from parents concerns. The DoE has put the hammer down this year. It is now impossible for any school in the city to register a child for kindergarten in fall of 2013 if they have a birth year other than 2008. The DoE has technically not made kindergarten mandatory. They have said that you must attend unless you don't want to, because you are sending your child to a private program or you are planning to enroll them at first grade. There had been talk about moving the cut off date to Dec. 1 or providing waivers for late birthday children. Both of these options are off the table.
The office of enrollment has given desperate and worried parents an option, but it is not a great one. They have said that these children must register and attend for first grade on the regular timeline. If the parents and teachers and school administration determine that first grade is not an appropriate placement, the school will report to the District Superintendent, who will approve a move back to k. The child will be moved into a k classroom if there is room. If there isn't room, there is no where for the child to go. The DoE is very clear that the child must be attending first grade in a school before any of this toing and froing can happen.
It has been the practice for kids entering the system (from out of NYC or private school) at upper grades to enroll in the next appropriate class (despite their age). I have written to the DoE to get clarification about these older kids, but no word back.