SB1562

SECTION 1. The legislature recognizes that the changing demographics of the workforce will create new challenges for all employers. The workforce as a whole is aging and large numbers of workers will be retiring from their chosen careers. This will create an increasing demand for new workers and at the same time the labor pool will continue to shrink. In this environment, retirees have become a more important source of labor to fill needed jobs.

The State and counties as employers are facing the same challenges as other employers in trying to fill vacancies. However, the legislature recognizes that the State and counties remain at a distinct disadvantage when competing with other employers for knowledgeable and skilled retirees because that state law prohibits State or county retirees returning to government service (in other than temporary or less than half-time jobs) from receiving retirement benefits while working. State and county retirees who accept jobs with the private sector or the federal government are not similarly penalized.

The legislature understands that the restrictions on rehiring state and county retirees made sense at a time of high unemployment when such hiring practices were viewed in a very negative light by those desiring government jobs. However, the legislature recognizes the need for a new strategy in light of the record low unemployment in the State. This strategy will help to ensure that government jobs and in particular, jobs in critical areas do not go unfilled.

The legislature believes this Act is a proactive measure that must be taken now to help the state and county governments deal with a potential labor crisis in the coming years. The measure also recognizes our dependable and skilled state and county employees whose contributions to the State can continue even after their retirement. This Act will allow retired state and county government employees to again work for the State or county governments without incurring any negative retirement consequences, such as the forfeiture of retirement benefits already earned.

SECTION 2. Chapter 88, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§88- Reemployment of state and county retirees. (a) Appointing authorities in the state and county governments may employ a retired state or county government employee who is receiving retirement benefits under this chapter. If the position is a civil service position, a retiree subject to this section shall be recruited and selected for the position following civil service procedures. The human resources director of the appropriate jurisdiction, shall certify that the retiree was hired in accordance with applicable civil service laws.

(b) Notwithstanding any law to the contrary, a retired state or county government employee who is hired by the state or any county government under this section:

(1) Shall not earn retirement service credit, contribute to the system, or gain additional system benefits as a result of the retiree's subsequent employment with the State or county; and

(2) Shall continue to receive the employee's normal retirement benefits without penalty.

(c) This section shall not preclude a retiree from returning to work and relinquishing the employee's retirement benefits to earn additional service credit and gain additional retirement benefits for a future retirement date as may be allowed by this chapter.

(d) For the purposes of this section:

"Human resources director" means the state director of human resources development, the director of human resources of the judiciary, or the respective chief human resources management executive of each county, as the case may be.

"Retired state or county employee" means any former employee of the state or county governments who is classified by the system as a retirant.

"State or county governments" means the State, including any of its branches and the counties of Hawaii, Kauai, Maui, and the city and county of Honolulu."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2007.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	1562
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII