Salary withheld for indebtedness to the government
HRS §78-12
in effect78-12. Salary withheld for indebtedness to the government
(a) In case any officer, agent, employee, or other person in the service of a jurisdiction is indebted to a jurisdiction and the indebtedness has been determined by a hearing pursuant to chapter 91, upon demand of the officer charged with the duty of collecting the indebtedness, the disbursing officer charged with the duty of paying the indebted officer, agent, employee, or other person, after notice to the indebted person, shall withhold one-quarter of the salary, wages, or compensation due the indebted person and pay the same, from time to time as the same shall become due, to the officer charged with the duty of collecting the indebtedness, until the full amount of the indebtedness, together with penalties and interest thereon, is paid.
(b) If the indebtedness has arisen or been
incurred by reason of the indebted officer, agent, employee, or other person
having embezzled, stolen, or otherwise unlawfully acquired any moneys or other
property of a jurisdiction, the whole amount of the salary, wages, or
compensation, or so much thereof as may be required to pay the indebtedness in
full, shall be withheld and paid over to the officer charged with the duty of
collecting the indebtedness.
(c) The officer, agent, employee, or other
person in the service of the jurisdiction, alleged to be indebted to a
jurisdiction, may waive the right to a hearing to determine the indebtedness
and instead assign by contract to the officer charged with the duty of
collecting debts:
(1) The priority right to payment of the total amount
of the alleged indebtedness; and
(2) The right of the officer to deduct from each and
every periodic payment normally due the assignor an amount equal to the maximum
legally permissible amount deductible under garnishment law until the total
amount owing is paid in full.
For purposes of this section, a person shall be
deemed to waive the hearing if the person fails to request a hearing within
fifteen days from the date the person was notified of the indebtedness and the
opportunity to request a hearing.
(d) The operation of all garnishment process
served upon the disbursing officer shall be stayed until the indebtedness has
been fully paid.
(e) If the indebtedness has occurred as a
result of salary or wage overpayment, the disbursing officer shall determine
the amount of indebtedness and notify the employee in writing of the
indebtedness; provided that, to be an actionable cause of action, the
determination and notice to the employee shall be made within two years from
the date of the salary or wage overpayment, and not after. If the employee
contests the disbursing officer's determination of indebtedness, the employee
may request a hearing pursuant to chapter 91.
(f) Regardless of whether a contested
determination of indebtedness is pending, the disbursing officer shall commence
immediate recovery of the indebtedness as provided in this subsection. If the
indebtedness is equal to or less than $1,000, the disbursing officer shall
immediately deduct from any subsequent periodic payment normally due the
employee any amount up to the total amount of indebtedness and for indebtedness
greater than $1,000, the disbursing officer shall deduct:
(1) An amount agreed to by the employee and the
appointing authority, but not less than $100 per pay period; or
(2) One-quarter of the salary, wages, or compensation
due the employee until the indebtedness is repaid in full.
In addition to paragraph (1), an employee and the
appointing authority may agree to offset any remaining amount of indebtedness
by applying the current value of appropriate leave or compensatory time credits
posted in the employee's respective accounts as balances that would otherwise
be payable in cash upon separation from service; provided that credits shall
not be applied to any extent that would require a refund of any moneys already
deducted or repaid or that would require the payment of any moneys to the
employee equivalent to a cashing out of leave or compensatory time credits.
(g) If the determination of indebtedness was
contested and is subsequently found to be incorrect:
(1) Any moneys repaid or deducted under subsection
(e) for any indebtedness in excess of the correct amount shall be promptly
refunded with interest as specified by section 103-10; or
(2) All leave or compensatory time credits applied to
offset any indebtedness in excess of the correct amount shall be re-credited to
the employee's respective leave or compensatory time accounts and shall not
result in a cash payment.
(h) If an employee is entitled to contest the
determination of indebtedness under a collective bargaining grievance
procedure, that procedure shall be used in lieu of a hearing under subsection
(e). A collective bargaining agreement may include overpayment recovery
procedures; provided that the parties do not agree on any provision that would
be inconsistent with subsections (f) and (g).
(i) Where an officer, agent, employee, or
other person in the service of a jurisdiction is compensated in an amount
greater than or less than that to which the person is entitled, the
determination of the officer's, agent's, employee's, or other person's average
final compensation for the period of indebtedness shall be calculated in
accordance with section 88-81; provided that the compensation used to calculate
the average final compensation shall be the compensation the officer, agent,
employee, or other person should have been paid during that period.
[L 1911, c
120, §1; RL 1925, §163; am L 1933, c 191, §1; RL 1935, §100; am L 1937, c 14,
§2; RL 1945, §453; RL 1955, §5-14; am L 1957, c 152, §1; HRS §78-12; am L 1975,
c 25, §1; am L 1996, c 231, §4; am L 2000, c 253, §77; am L 2001, c 55, §35 and
c 123, §§12, 13; am L 2009, c 190, §1]
Source: Hawaii State Legislature (capitol.hawaii.gov), via Internet Archive capturesURL: http://www.capitol.hawaii.gov/hrscurrent/Vol02_Ch0046-0115/HRS0078/HRS_0078-0012.htmFetched: 11/10/2026