The executive director of Hawaii’s largest public-workers union wants to reopen contract negotiations with the state and counties, claiming another union got a better deal.

The two-year contract members of the Hawaii Government Employees Association agreed to back in April includes a “most-favored nation” clause that allows HGEA to get the same benefits as another union if a better deal is reached.

It was essentially seen as a reward for HGEA being the first union to settle with the state.

Now that the United Public Workers union has come out with a tentative agreement, HGEA is invoking the clause.

HGEA Executive Director Randy Perreira sent a Nov. 18 letter to Gov. Neil Abercrombie‘s administration and the county mayors “notifying the employers of our demand to reopen negotiations.” Perreira said in the letter that there are “substantive differences in the favor of the UPW agreement in relation to those of the HGEA units.”

Here’s a copy of the letter.

Abercrombie told Civil Beat on Monday he fully intends to honor the favored nation clause. He said once the UPW contract is finalized, the agreements can be compared.

The governor said he was appreciative of HGEA leading the way in contract talks. He said he knew the state was promising the union it didn’t have to worry about another union getting a better deal — and that it still doesn’t have to worry.

On the surface, the differences between the two seem subtle, and it’s hard to say which agreement really is better for employees in the long run.

HGEA

In HGEA’s case, members agreed to 5 percent pay cuts and a 50-50 split on health-care premiums.

The contract also calls for six hours per month of supplemental time off with pay, which amounts to an additional nine paid days off a year. That’s in addition to the 21 vacation days and 21 sick days public workers get annually.

There is no promise that there won’t be lay-offs in the agreement.

The terms apply to all members regardless of how their positions are funded.

UPW

In UPW’s case, the union tentatively agreed to “directed leave without pay” (read: furlough days) to achieve labor savings.

UPW members would be required to take 14 unpaid days off for the remainder of the current fiscal year, which began July 1. They’d be required to take 13 furlough days next fiscal year.

The tentative contract also calls for a 50-50 split on health costs, and it guarantees no layoffs for the life of the contract.

The terms would not apply to union members whose positions are funded with federal or special funds.

Pay Cut vs. Furloughs

An analysis of two agreements based on a $50,000 salary shows that a 5 percent cut results in a slightly higher take-home pay than the furlough scenario.

But the 5 percent cut results in a lower base pay, which affects things like overtime rates and retirement benefit contributions — the higher your base pay, the higher your overtime rate and pension contributions will be.

  • $50,000 base salary less 5 percent cut = $47,500 gross base pay
  • $50,000 base salary less 14 unpaid leave days = $47,308 gross take home pay
  • $50,000 base salary less 13 unpaid leave days = $47,428 gross take home pay

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