Hawaii 2024 Regular Session

Hawaii House Bill HB101 Compare Versions

Only one version of the bill is available at this time.

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1	1	HOUSE OF REPRESENTATIVES H.B. NO. 101 THIRTY-SECOND LEGISLATURE, 2023 STATE OF HAWAII A BILL FOR AN ACT relating to the employees' retirement system. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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3	3	HOUSE OF REPRESENTATIVES H.B. NO. 101
4	4	THIRTY-SECOND LEGISLATURE, 2023
5	5	STATE OF HAWAII
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7	7	HOUSE OF REPRESENTATIVES
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9	9	H.B. NO.
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11	11	101
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13	13	THIRTY-SECOND LEGISLATURE, 2023
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17	17	STATE OF HAWAII
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31	31	A BILL FOR AN ACT
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37	37	relating to the employees' retirement system.
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43	43	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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47	47	SECTION 1. The purpose of this Act is to ensure that compensation eligible for the purpose of calculating retirement benefits and service time includes pay and service that are restored to an employee as part of an administrative, arbitral, or judicial proceeding. SECTION 2. Chapter 88, Hawaii Revised Statutes, is amended by adding a new section to part II, subpart B, to be appropriately designated and to read as follows: "§88- Service credit and compensation; back pay. (a) Service or compensation awarded to an employee pursuant to the final adjudication of a court of competent jurisdiction shall be considered service under section 88-21 or compensation under section 88-21.5, respectively, under the following conditions: (1) For: (A) Service, the employee appeals an involuntary termination or unpaid suspension and is subsequently awarded back pay and is retroactively reinstated to employment or has the suspension rescinded in whole or in part pursuant to the final adjudication of a court of competent jurisdiction; provided that: (i) The service credit shall be for the period of retroactive employment for which back pay is awarded; and (ii) The amount of service credited to the employee shall not exceed the period of absence that the employee would have worked but for their suspension or termination; or (B) Compensation, the employee challenges compensation and is subsequently awarded: (i) A retroactive pay differential pursuant to the final adjudication of a court of competent jurisdiction, then the pay differential that is awarded shall constitute compensation; or (ii) Back pay pursuant to the final adjudication of a court of competent jurisdiction, then the amount of back pay that constitutes compensation shall include normal salary adjustments and shall be based on the number of workdays between the date the employee's absence began until the employee's date of reinstatement and shall not exceed what the employee would have received had the employee not been suspended or terminated; (2) The employee makes contributions to the system based on the applicable rate set forth in section 88-45 and in the amount that the employee would have contributed had the employee's employment not been suspended or terminated; (3) The employer makes contributions to the system based on the contribution rate or rates in effect for the plan during the period of service covered by the back pay award, and in the amount the employer would have contributed had the employee's employment not been suspended or terminated along with compound interest at the actuarial valuation rate for contributions payable from the date the contribution was due until paid; and (4) If the employee was terminated, the employee repays: (A) Any amount in employee contributions that were refunded to the employee; and (B) Any service or disability allowance that was paid to the employee, at the time of the employee's termination. (b) Upon satisfaction of the requirements under subsection (a), the employee shall be entitled to all the membership rights and service credit that would have accrued but for the member's challenged suspension or involuntary termination upon receipt by the system of the full amount due." SECTION 3. Section 88-21, Hawaii Revised Statutes, is amended by: 1. Adding a new definition to be appropriately inserted and to read as follows: ""Final adjudication of a court of competent jurisdiction" means: (1) The final decision of a court, an administrative proceeding, or an arbitration proceeding from which no appeal may be filed or which no appeal has been filed within the time allowed; (2) A stipulated judgment (3) A court-approved settlement; (4) A settlement adopted by court order or referenced in an order of dismissal; (5) A third-party arbitrator decision from which no appeal may be filed or from which no appeal has been filed within the time allowed; or (6) Other final resolution of an appeal or challenge from which no appeal may be filed or from which no appeal has been filed within the time allowed." 2. Amending the definition of "base pay" and "service" to read as follows: ""Base pay" means the normal periodic payments of money for service, the right to which accrues on a regular basis in proportion to the service performed; recurring differentials; [and] elective salary reduction contributions under sections 125, 403(b), and 457(b) of the Internal Revenue Code of 1986, as amended[.]; back pay pursuant to section 88- ; and pay differential pursuant to section 88- ; "Service": service as an employee paid by the State or county, and also: [service] (1) Service during the period of a leave of absence or exchange if the individual is paid by the State or county during the period of the leave of absence or exchange; [and service] (2) Service during the period of an unpaid leave of absence or exchange if the individual is engaged in the performance of a governmental function or if the unpaid leave of absence is an approved leave of absence for professional improvement; provided that, for the period of the leave of absence or exchange without pay, the individual makes the same contribution to the system as the individual would have made if the individual had not been on the leave of absence[.]; and (3) Service pursuant to section 88- . Cafeteria managers and cafeteria workers shall be considered as paid by the State, regardless of the source of funds from which they are paid." SECTION 4. Section 88-21.5, Hawaii Revised Statutes, is amended to read as follows: "§88‑21.5 Compensation. (a) For a member who became a member before July 1, 2012[, unless]: (1) Unless a different meaning is plainly required by context, "compensation" as used in this part[, "compensation"] means: [(1)] (A) Normal periodic payments of money for service the right to which accrues on a regular basis in proportion to the service performed; [(2)] (B) Overtime, differentials, and supplementary payments; [(3)] (C) Bonuses and lump sum salary supplements; [and] [(4)] (D) Elective salary reduction contributions under sections 125, 403(b), and 457(b) of the Internal Revenue Code of 1986, as amended[.]; and (E) Back pay or pay differential considered as compensation pursuant to section 88- ; and (2) Bonuses and lump sum salary supplements shall be deemed earned when payable; provided that bonuses or lump sum salary supplements in excess of one‑twelfth of compensation for the twelve months prior to the month in which the bonus or lump sum salary supplement is payable, exclusive of overtime, bonuses, and lump sum salary supplements, shall be deemed earned: [(1)] (A) During the period agreed‑upon by the employer and employee, but in any event over a period of not less than twelve months; or [(2)] (B) In the absence of an agreement between the employer and the employee, over the twelve months prior to the date on which the bonus or lump sum salary supplement is payable. (b) For a member who becomes a member after June 30, 2012, unless a different meaning is plainly required by context, "compensation" as used in this part: (1) Means: (A) The normal periodic payments of money for service, the right to which accrues on an hourly, daily, monthly, or annual basis; (B) Shortage differentials; (C) Elective salary reduction contributions under sections 125, 403(b), and 457(b) of the Internal Revenue Code of 1986, as amended; [and] (D) Twelve-month differentials for employees of the department of education; and (E) Back pay or pay differential considered as compensation pursuant to section 88- ; and (2) Shall not include any other additional or extra payments to an employee or officer, including overtime, supplementary payments, bonuses, lump sum salary supplements, allowances, or differentials, including differentials for stand-by duty, temporary unusual work hazards, compression differentials, or temporary differentials, except for those expressly authorized pursuant to subsection (b)(1)(B), (b)(1)(C), [and] (b)(1)(D)[.], and (b)(1)(E)." SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 6. This Act shall take effect upon its approval. INTRODUCED BY: _____________________________ By Request
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49	49	SECTION 1. The purpose of this Act is to ensure that compensation eligible for the purpose of calculating retirement benefits and service time includes pay and service that are restored to an employee as part of an administrative, arbitral, or judicial proceeding.
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51	51	SECTION 2. Chapter 88, Hawaii Revised Statutes, is amended by adding a new section to part II, subpart B, to be appropriately designated and to read as follows:
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53	53	"§88- Service credit and compensation; back pay. (a) Service or compensation awarded to an employee pursuant to the final adjudication of a court of competent jurisdiction shall be considered service under section 88-21 or compensation under section 88-21.5, respectively, under the following conditions:
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55	55	(1) For:
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57	57	(A) Service, the employee appeals an involuntary termination or unpaid suspension and is subsequently awarded back pay and is retroactively reinstated to employment or has the suspension rescinded in whole or in part pursuant to the final adjudication of a court of competent jurisdiction; provided that:
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59	59	(i) The service credit shall be for the period of retroactive employment for which back pay is awarded; and
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61	61	(ii) The amount of service credited to the employee shall not exceed the period of absence that the employee would have worked but for their suspension or termination; or
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63	63	(B) Compensation, the employee challenges compensation and is subsequently awarded:
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65	65	(i) A retroactive pay differential pursuant to the final adjudication of a court of competent jurisdiction, then the pay differential that is awarded shall constitute compensation; or
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67	67	(ii) Back pay pursuant to the final adjudication of a court of competent jurisdiction, then the amount of back pay that constitutes compensation shall include normal salary adjustments and shall be based on the number of workdays between the date the employee's absence began until the employee's date of reinstatement and shall not exceed what the employee would have received had the employee not been suspended or terminated;
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69	69	(2) The employee makes contributions to the system based on the applicable rate set forth in section 88-45 and in the amount that the employee would have contributed had the employee's employment not been suspended or terminated;
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71	71	(3) The employer makes contributions to the system based on the contribution rate or rates in effect for the plan during the period of service covered by the back pay award, and in the amount the employer would have contributed had the employee's employment not been suspended or terminated along with compound interest at the actuarial valuation rate for contributions payable from the date the contribution was due until paid; and
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73	73	(4) If the employee was terminated, the employee repays:
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75	75	(A) Any amount in employee contributions that were refunded to the employee; and
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77	77	(B) Any service or disability allowance that was paid to the employee,
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79	79	at the time of the employee's termination.
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81	81	(b) Upon satisfaction of the requirements under subsection (a), the employee shall be entitled to all the membership rights and service credit that would have accrued but for the member's challenged suspension or involuntary termination upon receipt by the system of the full amount due."
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83	83	SECTION 3. Section 88-21, Hawaii Revised Statutes, is amended by:
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85	85	1. Adding a new definition to be appropriately inserted and to read as follows:
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87	87	""Final adjudication of a court of competent jurisdiction" means:
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89	89	(1) The final decision of a court, an administrative proceeding, or an arbitration proceeding from which no appeal may be filed or which no appeal has been filed within the time allowed;
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91	91	(2) A stipulated judgment
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93	93	(3) A court-approved settlement;
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95	95	(4) A settlement adopted by court order or referenced in an order of dismissal;
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97	97	(5) A third-party arbitrator decision from which no appeal may be filed or from which no appeal has been filed within the time allowed; or
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99	99	(6) Other final resolution of an appeal or challenge from which no appeal may be filed or from which no appeal has been filed within the time allowed."
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101	101	2. Amending the definition of "base pay" and "service" to read as follows:
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103	103	""Base pay" means the normal periodic payments of money for service, the right to which accrues on a regular basis in proportion to the service performed; recurring differentials; [and] elective salary reduction contributions under sections 125, 403(b), and 457(b) of the Internal Revenue Code of 1986, as amended[.]; back pay pursuant to section 88- ; and pay differential pursuant to section 88- ;
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105	105	"Service": service as an employee paid by the State or county, and also: [service]
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107	107	(1) Service during the period of a leave of absence or exchange if the individual is paid by the State or county during the period of the leave of absence or exchange; [and service]
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109	109	(2) Service during the period of an unpaid leave of absence or exchange if the individual is engaged in the performance of a governmental function or if the unpaid leave of absence is an approved leave of absence for professional improvement; provided that, for the period of the leave of absence or exchange without pay, the individual makes the same contribution to the system as the individual would have made if the individual had not been on the leave of absence[.]; and
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111	111	(3) Service pursuant to section 88- .
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113	113	Cafeteria managers and cafeteria workers shall be considered as paid by the State, regardless of the source of funds from which they are paid."
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115	115	SECTION 4. Section 88-21.5, Hawaii Revised Statutes, is amended to read as follows:
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117	117	"§88‑21.5 Compensation. (a) For a member who became a member before July 1, 2012[, unless]:
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119	119	(1) Unless a different meaning is plainly required by context, "compensation" as used in this part[, "compensation"] means:
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121	121	[(1)] (A) Normal periodic payments of money for service the right to which accrues on a regular basis in proportion to the service performed;
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123	123	[(2)] (B) Overtime, differentials, and supplementary payments;
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125	125	[(3)] (C) Bonuses and lump sum salary supplements; [and]
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127	127	[(4)] (D) Elective salary reduction contributions under sections 125, 403(b), and 457(b) of the Internal Revenue Code of 1986, as amended[.]; and
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129	129	(E) Back pay or pay differential considered as compensation pursuant to section 88- ; and
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131	131	(2) Bonuses and lump sum salary supplements shall be deemed earned when payable; provided that bonuses or lump sum salary supplements in excess of one‑twelfth of compensation for the twelve months prior to the month in which the bonus or lump sum salary supplement is payable, exclusive of overtime, bonuses, and lump sum salary supplements, shall be deemed earned:
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133	133	[(1)] (A) During the period agreed‑upon by the employer and employee, but in any event over a period of not less than twelve months; or
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135	135	[(2)] (B) In the absence of an agreement between the employer and the employee, over the twelve months prior to the date on which the bonus or lump sum salary supplement is payable.
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137	137	(b) For a member who becomes a member after June 30, 2012, unless a different meaning is plainly required by context, "compensation" as used in this part:
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139	139	(1) Means:
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141	141	(A) The normal periodic payments of money for service, the right to which accrues on an hourly, daily, monthly, or annual basis;
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143	143	(B) Shortage differentials;
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145	145	(C) Elective salary reduction contributions under sections 125, 403(b), and 457(b) of the Internal Revenue Code of 1986, as amended; [and]
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147	147	(D) Twelve-month differentials for employees of the department of education; and
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149	149	(E) Back pay or pay differential considered as compensation pursuant to section 88- ; and
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151	151	(2) Shall not include any other additional or extra payments to an employee or officer, including overtime, supplementary payments, bonuses, lump sum salary supplements, allowances, or differentials, including differentials for stand-by duty, temporary unusual work hazards, compression differentials, or temporary differentials, except for those expressly authorized pursuant to subsection (b)(1)(B), (b)(1)(C), [and] (b)(1)(D)[.], and (b)(1)(E)."
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153	153	SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
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155	155	SECTION 6. This Act shall take effect upon its approval.
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159	159	INTRODUCED BY: _____________________________
160	160	By Request
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162	162	INTRODUCED BY:
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168	168	By Request
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170	170	Report Title: City and County of Honolulu Package; Retirement Benefits; ERS Description: Clarifies that service and compensation awarded as part of an administrative, arbitral, or judicial proceeding are included in the calculation of retirement benefits and service time for the Employees' Retirement System. The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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176	176	Report Title:
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178	178	City and County of Honolulu Package; Retirement Benefits; ERS
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182	182	Description:
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184	184	Clarifies that service and compensation awarded as part of an administrative, arbitral, or judicial proceeding are included in the calculation of retirement benefits and service time for the Employees' Retirement System.
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192	192	The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.