Report Title:
Public Employment
Description:
Excludes excessive overtime from calculation of an employee's average final compensation for retirement purposes. (HB307 HD1)
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
307 |
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TWENTY-FIRST LEGISLATURE, 2001 |
H.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO public employment.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Currently, overtime pay is included in the calculation of "average final compensation" as defined in section 88-21, Hawaii Revised Statutes. The responsibility to assign overtime is delegated to top level managers and administrators who are required to maintain or expand essential services with fewer employees. The situation has given rise to concern that certain employees in anticipation of retirement deliberately assign to themselves or others excessive overtime solely to boost retirement benefits. Obviously, such a practice by employees is improper and should be prohibited. Overtime compensation improperly received must be deducted from the calculation of retirement benefits by the employees' retirement system.
While more drastic proposals have been offered on this matter, the legislature recognizes that there are constitutional limits that prohibit the impairment or diminution of "accrued benefits" in article XVI, section 2, of the state constitution. Moreover, it would be arbitrary and capricious to punish all beneficiaries for the misdeeds of only certain individuals.
The purpose of this Act is to prohibit the inclusion of excessive amounts of income received from overtime work from the calculation of an employee's average final compensation for retirement purposes.
SECTION 2. Chapter 88, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§88- Compensation from abusive use of overtime not included. (a) Compensation shall not be included in the calculation of any employee's average final compensation to the extent that compensation was earned as a result of the abusive use of overtime.
(b) As used in this section, "abusive use of overtime" includes:
(1) Any situation in which an officer or employee assigns the officer's or employee's self or any other person to work overtime solely for the purpose of increasing the officer's, employee's or the other person's average final compensation as defined in section 88-21;
(2) Any situation in which the compensation received from overtime work by any officer or employee exceeds one hundred fifty per cent of the average compensation received by the officer or employee for retirement purposes during the previous three calendar years.
(c) Any violation of subsection (b)(1) shall be reported to the employees' retirement system. Any amounts received under circumstances described in subsection (b)(1), and any amounts described in subsection (b)(2) shall be deducted from any calculation of the employee's average final compensation."
SECTION 3. New statutory material is underscored.
SECTION 4. This Act shall take effect upon its approval.