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THE SENATE |
S.B. NO. |
211 |
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THIRTY-SECOND LEGISLATURE, 2023 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to the employees' retirement system.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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rescinded in whole or in part pursuant to the final adjudication of a court of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.
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INTRODUCED BY: |
_____________________________ |
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By Request |
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.