THE SENATE
S.B. NO.
2120
THIRTY-THIRD LEGISLATURE, 2026
S.D. 1
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO TRANSFER OF EMPLOYEE BENEFITS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
PART I
SECTION 1. The department of human resources development shall adopt rules and revise policies as necessary to ensure that an employee separating employment from the State may elect to transfer any accrued vacation and sick leave if the employee is rehired by the State or any county government within one calendar year of separation; provided that the employee shall provide notice of the employee's election to the state employer no later than ninety days after the date of separation.
SECTION 2. Both houses of the legislature shall adopt policies as necessary to ensure that an employee separating employment from the legislature may elect to transfer any accrued vacation and sick leave if the employee is rehired by the State or any county government within one calendar year of separation from the legislature; provided that the employee shall provide notice of the employee's election to the legislative employer no later than ninety days after the date of separation.
SECTION 3. Each county shall adopt ordinances and amend policies as necessary to ensure that an employee separating employment from the county may elect to transfer any accrued vacation and sick leave if the employee is rehired by the State or any county government within one calendar year of separation from the county; provided that the employee shall provide notice of the employee's election to the county employer no later than ninety days after the date of separation.
SECTION 4. For the purposes of this part, "employee" has the same meaning as defined in section 78-1.5, Hawaii Revised Statutes.
PART II
SECTION 5. Section 87A-35, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) This section shall apply to state and county contributions to the fund for employees who were hired after June 30, 1996, but before July 1, 2001, and who retire with fewer than twenty-five years of credited service, excluding sick leave; provided that this section shall not apply to the following employees, for whom state and county contributions shall be made as provided by section 87A-33:
(1) An employee hired [[Struck through: prior to]] [Underlined: before] July 1, 1996, who transfers employment after June 30, 1996, and who cumulatively accrues at least ten years of credited service; and
(2) An employee hired [[Struck through: prior to]] [Underlined: before] July 1, 1996, who has at least ten years of credited service [[Struck through: prior to]] [Underlined: before] a break in service.
For the purposes of this section:
"Break in service" means to leave state or county employment for more than [[Struck through: ninety calendar days]][Underlined: :]
[Underlined: (1)] [Underlined: Ninety calendar days] before returning to state or county employment[[Struck through: .]][Underlined: ; provided that ][Underlined: the leave begins before July 1, 2026; or]
[Underlined: (2)] [Underlined: One hundred eighty calendar days ][Underlined: before returning to state or county employment; provided that:]
[Underlined: (A)] [Underlined: The leave begins on or after July 1, 2026;]
[Underlined: (B)] [Underlined: The employee elects to be subject to the one hundred eighty calendar day period; and ]
[Underlined: (C)] [Underlined: The employee provides notice of the employee's election to the state or county employer no later than ninety days after the leave begins.]
[Underlined: Any employee who does not elect to be subject to the one hundred eighty calendar day period shall be subject to the period described in paragraph (1).]
"Transfer" means to leave state or county employment and return to state or county employment within [[Struck through: ninety calendar days.]][Underlined: :]
[Underlined: (1)] [Underlined: Ninety calendar days; provided that the leave begins before July 1, 2026; or]
[Underlined: (2)] [Underlined: One hundred eighty calendar days; provided that:]
[Underlined: (A)] [Underlined: The leave begins on or after July 1, 2026;]
[Underlined: (B)] [Underlined: The employee elects to be subject to the one hundred eighty calendar day period; and ]
[Underlined: (C) The employee provides notice of the employee's election to the state or county employer no later than ninety days after the leave begins. ]
[Underlined: Any employee who does not elect to be subject to the one hundred eighty calendar day period shall be subject to the period described in paragraph (1).]"[Underlined: ]
SECTION 6. Section 87A-36, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) This section shall apply to state and county contributions to the fund for employees hired after June 30, 2001, and who retired, except that this section shall not apply to the following employees, for whom state and county contributions shall be made as provided by section 87A-35:
(1) An employee hired after June 30, 1996, and [[Struck through: prior to]] [Underlined: before] July 1, 2001, who transfers employment after June 30, 2001, and who cumulatively accrues at least ten years of credited service; and
(2) An employee hired after June 30, 1996, and [[Struck through: prior to]] [Underlined: before] July 1, 2001, who has at least ten years of credited service [[Struck through: prior to]] [Underlined: before] a break in service.
For purposes of this section[[Struck through: :]
[Struck through: "Break in service" means to leave state or county employment for more than ninety calendar days before returning to state or county employment.]
[Struck through: "Transfer" means to leave state or county employment and return to state or county employment within ninety calendar days.]][Underlined: , "break in service" and "transfer" have the same meanings as those terms are defined in section 87A-35.]"
PART III
SECTION 7. This Act shall not be construed to diminish any transfer of benefits provision already provided pursuant to collective bargaining agreements that is more favorable to the employees benefited thereby than the transfer terms provided by this Act or at least equivalent thereto; provided that presently existing collective bargaining agreements shall not be affected by the provisions of this Act.
SECTION 8. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 10. This Act shall take effect on January 1, 2077.
Report Title:
Public Employee Benefits; Sick and Vacation Leave; EUTF; Transfer; Break in Service
Description:
Requires the State, Legislature, and counties to amend rules and policies to ensure that certain employees can transfer accrued vacation and sick leaves if rehired by the State or a county within one calendar year of separation under certain conditions. Extends the allowable break in service for purposes of determining certain state and county contributions to the Hawaii Employer-Union Health Benefits Trust Fund from ninety calendar days to 180 calendar dars under certain conditions. Effective 1/1/2077. (SD1)
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