REPORT TITLE:
Public Employment


DESCRIPTION:
Establishes an advisory panel to modernize public employment.
Authorizes experimental modernization projects in human resource
management.  Allows recruitment above first step of pay range.
Makes salary overpayments the subject of collective bargaining.
Authorizes establishment of flexible spending accounts for
cafeteria plans.  (CD1)

 
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HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 1999                                S.D. 2
STATE OF HAWAII                                            C.D. 1
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO PUBLIC EMPLOYMENT.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1                              Part I
 
 2      SECTION 1.  For several decades, the civil service system
 
 3 has admirably met its mandate to support Hawaii state
 
 4 government's mission to serve the people of Hawaii.  Within the
 
 5 past few years, however, with the advancement of digital
 
 6 technology, public needs have changed at a constant and ever-
 
 7 increasing rate.  Our current civil service system, which was
 
 8 created at a time when digital technology was at best, mostly
 
 9 theory, has outlived its usefulness.  Therefore, for state
 
10 government to continue to meet the public's needs, the civil
 
11 service system will have to be modernized to provide flexible,
 
12 timely, responsive, and people-centered personnel support.
 
13      To create an opportunity that encourages all stakeholders to
 
14 work collaboratively to co-create this modernized civil service,
 
15 it is proposed that a "fresh-start" provision be established for
 
16 civil service laws.  Such a "fresh-start" concept would not only
 
17 serve to "clear-the-deck" but would also capture the public's
 
18 attention and thus provide the drive to seriously engage in the
 
19 process of co-creating a new statutory framework by all
 

 
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 1 stakeholders.
 
 2      SECTION 2.  (a)  There is established, within the department
 
 3 of human resources development for administrative purposes, an
 
 4 advisory panel to establish partnerships with all stakeholders,
 
 5 labor and management included, in order to design and effectuate
 
 6 a process to modernize the civil service system.  The panel shall
 
 7 consist of the following persons:
 
 8      (1)  The chairperson of the senate committee on labor and
 
 9           environment;
 
10      (2)  The chairperson of the house committee on labor and
 
11           public employment;
 
12      (3)  The director of human resources development, who shall
 
13           be the chairperson of the panel;
 
14      (4)  A representative of the conference of personnel
 
15           directors;
 
16      (5)  A representative of the Hawaii Government Employees'
 
17           Association;
 
18      (6)  A representative of the United Public Workers;
 
19      (7)  A representative of the State of Hawaii Organization of
 
20           Police Officers; and
 
21      (8)  A representative of the Hawaii Fire Fighters
 
22           Association.
 
23      (b)  The panel may solicit input from other individuals with
 

 
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 1 relevant expertise, who shall be designated by the panel.
 
 2      (c)  In discussions and agreements on proposed new laws, the
 
 3 panel shall identify and work collaboratively with the various
 
 4 stakeholders governed by chapters 76, 77, 78, 79, 80, 81, and 82,
 
 5 Hawaii Revised Statutes, and other applicable laws, to draft
 
 6 replacement legislation as deemed necessary.  The panel shall
 
 7 discuss issues including but not limited to:
 
 8      (1)  The negotiability of health and retirement benefits;
 
 9      (2)  The creation of a streamlined classification system
 
10           using professionally recognized techniques, including
 
11           broadbanding, to provide flexibility that will result
 
12           in a reduction in the number of existing classes of
 
13           work;
 
14      (3)  A total compensation package that includes pay and
 
15           benefits;
 
16      (4)  The recruitment of personnel above the first step of
 
17           the pay range in accordance with section 4;
 
18      (5)  The autonomy of personnel administration systems;
 
19      (6)  The elimination of duplication between the collective
 
20           bargaining law and other laws;
 
21      (7)  The need for civil service commissions and the public
 
22           employees compensation appeals board;
 
23      (8)  The restructuring of departments based on the proposed
 

 
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 1           new laws;
 
 2      (9)  The civil service law;
 
 3     (10)  The compensation law;
 
 4     (11)  Public service;
 
 5     (12)  Leaves of absence;
 
 6     (13)  Hours of work;
 
 7     (14)  In-service training programs; and
 
 8     (15)  Incentive and service awards.
 
 9      (d)  The panel shall establish a process for developing a
 
10 broadbased series of recommendations and submit draft model civil
 
11 service legislation to a joint house and senate labor committee
 
12 meeting during the week of November 15, 1999.
 
13      (e)  The panel shall submit to the chairperson of the senate
 
14 committee on labor and environment and the chairperson of the
 
15 house committee on labor and public employment, in bill form and
 
16 prior to the deadline for introducing bills to the regular
 
17 session of 2000, recommended model civil service legislation to
 
18 carry out the purposes of this section.
 
19                              Part II
 
20      SECTION 3.  Experimental modernization projects.(a)  The
 
21 department of human resources development, with the approval of
 
22 the governor, may conduct experimental modernization projects to
 
23 determine whether a specific change in human resource management
 

 
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 1 procedures, methods, policies, or statutes would result in
 
 2 improved human resource management within the State.
 
 3      (b)  Prior to implementing any experimental modernization
 
 4 project, the department of human resources development shall
 
 5 develop a plan that identifies the purposes of the project, the
 
 6 methodology to be used, the duration of the project, the
 
 7 methodology and criteria for evaluation of the project, and, if
 
 8 applicable, the cost of the project.
 
 9      (c)  The conduct of experimental modernization projects
 
10 pursuant to this section shall not be limited by chapters 76 and
 
11 77, Hawaii Revised Statutes, and existing civil service rules and
 
12 procedures, except that no project shall waive or abridge equal
 
13 employment opportunity rights or those rules prohibiting
 
14 discrimination based on race, sex, age, religion, color,
 
15 ancestry, politics, physical or mental disability, marital
 
16 status, or sexual orientation.
 
17      (d)  If any experimental modernization project will have a
 
18 significant impact on existing employees, the consent of
 
19 appropriate exclusive representatives prior to implementation of
 
20 the project shall be required.  If any experimental modernization
 
21 project involves the modification of any terms and conditions of
 
22 a valid collective bargaining agreement, an agreement amending
 
23 those specific terms and conditions shall be negotiated with the
 

 
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 1 exclusive representative prior to implementation of the project.
 
 2      (e)  The department of human resources development, through
 
 3 the governor, shall submit an annual report to the legislature on
 
 4 any approved experimental modernization projects, including the
 
 5 plan, status, and, as applicable, results of the project for the
 
 6 legislature's information.
 
 7                             Part III
 
 8      SECTION 4.  Recruitment above the first step of the pay
 
 9 range.(a)  Notwithstanding section 77-9, Hawaii Revised
 
10 Statutes, to the contrary, the department of human resources
 
11 development may announce vacancies at a range of rates, rather
 
12 than at the first step as provided by law, for professional and
 
13 scientific positions and positions in the excluded managerial
 
14 compensation plan.  The range shall consist of the first step and
 
15 may consist of additional steps or rates up to and including, but
 
16 not exceeding, the midpoint of the salary range.
 
17      (b)  The department of human resources development shall
 
18 determine the number of steps or range of rates to be made
 
19 available under this section at any given time and the minimum
 
20 number of creditable years of experience required.
 
21      (c)  The appointing authority, as part of the selection and
 
22 appointment process, may evaluate the relevancy of each
 
23 applicant's qualifications to the specific duties of the position
 

 
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 1 and, in recognition of pertinent education or experience which
 
 2 exceed the minimum qualification requirements of the class, may
 
 3 make an initial appointment at an appropriate step or rate within
 
 4 the advertised range.  All such evaluations and appointments
 
 5 shall be in accordance with the guidelines adopted by the
 
 6 department of human resources development.  Only excess
 
 7 experience or equivalent education of a kind and level directly
 
 8 relevant to the work to be performed by the appointee shall be
 
 9 credited under this section.
 
10      (d)  Nothing in this section shall be deemed to preclude an
 
11 employer from offering a higher starting rate that may be
 
12 authorized by section 77-9, Hawaii Revised Statutes.
 
13                              Part IV
 
14      SECTION 5.  Section 78-12, Hawaii Revised Statutes, is
 
15 amended by amending subsection (e) to read as follows:
 
16      "(e)  If the indebtedness has occurred as a result of salary
 
17 or wage overpayment, the comptroller or other officer shall
 
18 determine the amount of indebtedness and notify the employee in
 
19 writing of the indebtedness.  If the employee contests the
 
20 comptroller or other officer's determination of indebtedness, the
 
21 employee may request a hearing pursuant to chapter 91, and upon
 
22 conclusion of the hearing or if the employee waives the hearing,
 
23 if the indebtedness is equal to or less than $1,000, the
 

 
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 1 comptroller or other officer shall immediately deduct from any
 
 2 subsequent periodic payment normally due the employee any amount
 
 3 up to the total amount of indebtedness[.]; provided that if the
 
 4 employee may grieve the indebtedness under a collective
 
 5 bargaining grievance procedure, then the procedure shall be
 
 6 utilized to contest the indebtedness in lieu of a hearing
 
 7 pursuant to chapter 91.  For indebtedness greater than $1,000,
 
 8 the comptroller or other officer shall deduct:
 
 9      (1)  An amount agreed to by the employee and employer, but
 
10           not less than $100 per pay period; or
 
11      (2)  One-quarter of the salary, wages, or compensation due
 
12           the employee until the indebtedness is repaid in full."
 
13                              Part V
 
14      SECTION 6.  Notwithstanding any other law to the contrary,
 
15 the legislature shall adopt legislation to be effective June 29,
 
16 2000, to define the employment of persons in the civil service
 
17 system.  Such legislation shall be governed by the merit
 
18 principle.
 
19      SECTION 7.  Effective June 30, 2000, chapters 76, 77, 78,
 
20 79, 80, 81, and 82, Hawaii Revised Statutes, and other applicable
 
21 laws are repealed or modified as deemed necessary; provided that
 
22 the legislature has adopted replacement legislation for these
 
23 laws in accordance with section 6 and, in so doing, identifies
 

 
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 1 the specific repealed law or laws that are deemed to be replaced
 
 2 by the new law.
 
 3                              PART VI
 
 4      SECTION 8.  Chapter 78, Hawaii Revised Statutes, is amended
 
 5 by adding a new section to part II to be appropriately designated
 
 6 and to read as follows:
 
 7      "78-    Flexible spending accounts.  (a)  As used in this
 
 8 section:
 
 9      "Contributions" means the employee pretax compensation
 
10 reductions contributed to the plan.
 
11      "Flexible spending accounts" and the "plan" mean a flexible
 
12 spending accounts plan for state employees authorized by section
 
13 125 of the Internal Revenue Code of 1986, as amended, and
 
14 established in accordance with this part.
 
15      (b)  In addition to any other powers and duties provided by
 
16 law, the department or agency charged with the administration of
 
17 the flexible spending accounts may enter into any contracts
 
18 necessary to establish, administer, or maintain the plan.
 
19      (c)  The contributions, interest earned, and forfeited
 
20 participant balances shall be held in trust for the exclusive
 
21 benefit of the participants and the plan.  The department or
 
22 agency charged with administration of the plan shall have the
 
23 authority to hold these funds in trust outside the state
 

 
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 1 treasury.
 
 2      (d)  The interest earned and forfeited participant balances
 
 3 shall be used to defray participant fees and other administrative
 
 4 costs as determined by the department or agency charged with
 
 5 administration of the plan.
 
 6      (e)  The contributions, interest earned, and forfeited
 
 7 participant balances shall not be subject to the general
 
 8 creditors of the State."
 
 9                             Part VII
 
10      SECTION 9.  Statutory material to be repealed is bracketed.
 
11 New statutory material is underscored.
 
12      SECTION 10.  This Act shall take effect upon its approval.
 

 
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