Repeals provisions that allow the State to delay payroll to some employees by a full pay period in addition to the payroll lag of 5 days. Requires all public employees, except those in bargaining unit 7, to be paid 5 days after the close of the pay period for which the paycheck is being issued.

A BILL FOR AN ACT

SECTION 1. The legislature finds that state law does not allow a private employer to delay pay to its employees for more than seven days after the end of a pay period. The legislature reaffirms this policy as fair and sound fiscal practice.

The legislature also finds that the State, as an employer, does not abide by this practice and pays its employees on an "after-the-fact" basis that, in some cases, requires certain employees to wait for an unreasonably long period of time for their pay.

The legislature further finds that the State currently implements a punitive delay of pay to some employees that it may have overpaid. In addition, the State currently delays the pay of all employees hired after July 1, 1998, for half a month in addition to the "payroll lag" of five days.

The legislature believes that the State should not be exempted from its responsibility to pay its employees on a timely basis and that public employees have a right to the timely receipt of salaries or wages earned. The legislature also believes that the payroll delay is excessive, unfair to public employees, and is fundamentally a poor business and management practice.

The purpose of this Act is to ensure fair, timely, and equitable payment to all employees. This Act also repeals those provisions of section 78-13, Hawaii Revised Statutes, that enable the State to engage in punitive payroll delays when the State errs by overpaying employees. Most overpayments occur because of the State's limited accounting capabilities rather than any wrongdoing or misleading practice of the employee.

SECTION 2. Section 78-13, Hawaii Revised Statutes, is amended to read as follows:

"§78-13 Salary periods. (a) Unless otherwise provided by law, all officers and employees shall be paid at least semimonthly except that substitute teachers, part-time hourly rated teachers of adult and evening classes, and other part-time, intermittent, or casual employees may be paid once a month and that the governor, upon reasonable notice and upon determination that the payroll payment basis should be converted from predicted payroll to after-the-fact payroll, may allow a one-time once a month payroll payment to all public officers and employees to effect a conversion to after-the-fact payroll as follows:

The implementation of the after-the-fact payroll shall not be subject to negotiation under chapter 89.

[(b) If an employee has been working for the State for at least six months, has no paid leave accumulated, and has an existing salary overpayment balance:

(c) If an employee has been working for the State for at least six months and has had at least two incidents of leave which results in salary overpayment within the past six months:

(d) The implementation of subsections (b) and (c) shall not be subject to negotiation under chapter 89.]

(b) The department of accounting and general services and every other jurisdiction shall establish procedures to obtain repayment of any salary or wage overpayments to officers or employees. The procedures shall be adopted in accordance with chapter 91 and shall not unnecessarily financially overburden an overpaid officer or employee unless good cause can otherwise be proven.

[(e) All] (c) Salaried and non-salaried officers and employees, except those belonging to bargaining [units 5 and] unit 7, [hired on or after July 1, 1998, shall be paid on the same pay dates and for the same pay periods as non-salaried employees.] shall receive their payroll payments on an after-the-fact basis; provided that salaried and non-salaried officers and employees subject to this subsection shall receive their payroll payments no later than five days after the end of the pay period for which the payroll payment is being issued.

All salaried or non-salaried officers and employees, other than those belonging to bargaining unit 7, whose salary or payroll payment schedule is inconsistent with this subsection, shall receive, within three months of the effective date of this Act, a payroll payment to bring that officer or employee's salary or payroll payment schedule into compliance with this subsection."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.