Retroactive reinstatement; retroactive rescission of suspension; retroactive payments
HRS §88-64
in effect88-64. Retroactive reinstatement; retroactive rescission of suspension; retroactive payments
(a) Upon certification by the system, the retroactive reinstatement, retroactive rescission of suspension, and retroactive payment provided to an employee pursuant to a final resolution of claims shall be considered service under section 88-21, compensation under section 88-21.5, or both; provided that:
(1) For the reinstatement, rescission of suspension,
or payment to be considered:
(A) Service under section 88-21, the employee
shall appeal the employee's involuntary termination or unpaid suspension, be
retroactively reinstated to employment or have the suspension rescinded in
whole or in part, and be provided back pay, pursuant to a final resolution of
claims; provided further that:
(i) The dates of retroactive employment or
retroactive recission of suspension for which back pay is provided pursuant to
a final resolution of claims and paid by the State or county do not precede or
succeed the dates the employee would have provided service if the employee had
not been suspended or terminated;
(ii) A final resolution of claims specifies the
dates of retroactive employment or retroactive rescission of suspension, and
the amount, purpose, and nature of retroactive payments for each monthly period
in which the employee would have provided service if the employee had not been
suspended or terminated;
(iii) The dates of retroactive employment or
retroactive rescission of suspension provided pursuant to a final resolution of
claims would otherwise have been considered service as provided in this
chapter; and
(iv) The service shall be credited to the extent
it would otherwise have been credited as provided in this chapter; and
(B) Compensation under section 88-21.5, the
employee shall challenge an involuntary termination, unpaid suspension, or the
employee's compensation and be subsequently provided a retroactive payment
pursuant to a final resolution of claims; provided further that:
(i) The amount, purpose, nature, and duration
of a retroactive payment provided pursuant to a final resolution of claims and
paid by the State or county do not exceed the amount, purpose, nature, and
duration of compensation available to comparable employees (including but not
limited to employees with similar positions, class, title, pay range or wage
scale, step, bargaining unit, contract type, function, job category, and pay
rate code through the same employer, department, or agency, available by pay
schedule, or comparable to the employee's own history of compensation), less
any compensation actually paid to the employee and reported to the system by
the State or county, where applicable; do not exceed the compensation
attributable to the number of workdays for which retroactive payment is owed;
and when added to the compensation actually paid to the employee by the State
or county and reported to the system, if any, results in compensation to the
employee that does not exceed the compensation that the employee would have
earned had the employee not been suspended or terminated, or had the employee
received the compensation available to comparable employees;
(ii) Retroactive payments provided pursuant to a
final resolution of claims would otherwise have been considered compensation,
as provided in section 88-21.5(a) or (b), respectively, depending on when the
employee became a member, and this chapter; and
(iii) Any amounts provided to the employee for
damages, attorney's fees, interest or penalties, payments for failure to hire,
or payments made as part of an agreement for the employee to resign or
otherwise terminate employment shall not be considered compensation for
purposes of the system;
(2) The requirements of section 88-103.7 and this
chapter shall be satisfied with respect to any retroactive reinstatement,
retroactive rescission of suspension, retroactive pay differential, or back pay
pursuant to a final resolution of claims and paid by the State and county,
including but not limited to an allocation of the amount, purpose, and nature
of a retroactive payment for each monthly period in which it would have been
earned had the employee not been suspended or terminated, or had the employee received
the compensation available to comparable employees, subject to the retroactive
payments provided pursuant to a final resolution of claims and paid by the
State or county as set forth in paragraphs (1)(A) and (B);
(3) The employer has made a lump sum payment to the
system in the amount of the actuarial present value, as determined by the
system, of contributions that the employee would have contributed, as provided
in this chapter, for the service and compensation to be certified pursuant to
this section, which shall include compound interest thereon at the assumed rate
of return; provided further that:
(A) Class C service shall be credited at no
cost; and
(B) Any portion of the lump sum payment in
excess of the actuarial present value, as determined by the system, of
contributions that the employee would have contributed, as provided in this
chapter, for the service and compensation certified pursuant to this section,
shall be returned to the employer;
(4) As a condition of the employer's obligation under
paragraph (3), the employee has paid to the employer the contributions the
employee would have contributed, as provided in this chapter, for the service
and compensation to be certified pursuant to this section;
(5) The employer has made a lump sum payment to the
system in the amount of the actuarial present value, as determined by the
system, of contributions that the employer would have contributed, as provided
in this chapter, for the service and compensation to be certified pursuant to
this section, which shall include compound interest thereon at the assumed rate
of return; provided further that any portion of the lump sum payment in excess
of the actuarial present value, as determined by the system, of contributions
that the employer would have contributed, as provided in this chapter, for the
service and compensation certified pursuant to this section, shall be returned
to the employer;
(6) An employee who appeals an involuntary
termination, is retroactively reinstated to employment pursuant to a final
resolution of claims, and has:
(A) Been paid their accumulated contributions
or hypothetical account balance after the involuntary termination date and as a
result of the involuntary termination, has made a lump sum payment to the
system in the amount of the actuarial present value, as determined by the
system, of the accumulated contributions or hypothetical account that were paid
to the employee; or
(B) Received an allowance on service
retirement, ordinary disability retirement, or service-connected disability
retirement after the involuntary termination date and as a result of the
involuntary termination, has made a lump sum payment to the system in the
amount of the actuarial present value, as determined by the system, of any
allowance on service retirement, ordinary disability retirement, or
service-connected disability retirement received by the employee; and
(7) Notwithstanding this section, if the system
determines that a contribution exceeds the limits of any Internal Revenue Code
requirements that apply to the system, the system shall not accept the
contributions and shall return the contributions.
(b) As used in this section, "final
resolution of claims" means:
(1) The final decision of a court, an administrative
proceeding, or an arbitration proceeding from which either no appeal may be
filed or no appeal has been filed within the time allowed;
(2) A stipulated judgment;
(3) A settlement of claims, including but not limited
to a settlement of a labor grievance, that is in writing, signed, and dated by
the parties to the settlement, and a court-approved settlement;
(4) A settlement adopted by court order or referenced
in an order of dismissal;
(5) A third-party arbitrator's decision from which
either no appeal may be filed or no appeal has been filed within the time
allowed; or
(6) A settlement or other final resolution of an
appeal or challenge from which either no appeal may be filed or no appeal has
been filed within the time allowed.
[L 2023, c 46, §2]
Source: Hawaii State Legislature (capitol.hawaii.gov), via Internet Archive capturesURL: http://www.capitol.hawaii.gov/hrscurrent/Vol02_Ch0046-0115/HRS0088/HRS_0088-0064.htmFetched: 11/10/2026