Agencies have long relied on temporary contracts to get jobs done in Hawaii’s state government.

Now Gov. David Ige and labor unions are pushing legislation to severely limit those types of contracts — saying they lessen the flow of money into the state retirement system and deny workers collective bargaining rights.

But House Bill 2008 is strongly opposed by some of the governor’s own departments that say they need the flexibility and firepower the contracts provide.

The Kalanimoku Building downtown, where DLNR has offices. It is one of many state agencies relying on 89-day hires.

The Kalanimoku Building downtown, where the Department of Land and Natural Resources has offices. It is one of many state agencies relying on 89-day hires.

Cory Lum/CIvil Beat

The bill, which would limit how often the state can hire people to work for consecutive periods of 89 days or less, has cleared committees and awaits a full vote in the Senate.

After it was amended Monday by the Senate Ways and Means Committee, it would limit the use of the contracts to two consecutive terms.

But the governor could make temporary exceptions to allow a department to employ people with the short-term contracts for up to two years.

“This practice is a direct circumvention of the civil service system and it must stop.”” — Randy Perreira, Hawaii Government Employees Association

After that, the position would be automatically abolished, with some exceptions, such as when the temporary employee is involved in an ongoing agency investigation.

Ways and Means Chair Jill Tokuda also made it clear that the measure would apply only to state employees, not county workers.

The bill pits Budget and Finance Director Wes Machida and the Hawaii Government Employees Association against a half-dozen or so state departments and offices that report directly to Machida’s boss, Ige.

Machida, a former head of the Employees’ Retirement System, said the ERS does not receive pension contributions from 89-day term employees.

He estimates that ERS is missing out on $3 million to $4 million per year in contributions, a figure based on the 300 or so 89-day-term employees the state hires annually.

Director of Finance Wes Machida says the 89-day hiring system limits funding into the state Employees’ Retirement System.

Director of Finance Wes Machida says the 89-day hiring system lessens the money that goes into the state Employees’ Retirement System.

Cory Lum/Civil beat

The HGEA, which has more than 42,000 members, believes that changing the short-term hiring practice is “long overdue.”

“Several state departments have used 89-day term hires to fill positions inappropriately by extending the terms multiple times,” said HGEA executive director Randy Perreira. “These employees are denied collective bargaining rights and any benefits. This practice is a direct circumvention of the civil service system and it must stop.”

Another big public-sector union, the United Public Workers, also testified in support of the measure.

Representatives of some state agencies say they rely on 89-day hires to perform critical services.

Among the many agencies testifying in opposition to HB 2008 was the Department of Accounting and General Services, which said the hiring practice serves as “an important stopgap mechanism” for human resources departments “to keep operations running during the temporary vacancy of essential positions.”

Here’s a sampling of other opposition testimony:

• The Attorney General’s Office said its investigations division relies on temporary hires as it conducts criminal investigations, administers investigations concerning issues arising in the workplace, and prepares defense in civil litigations on behalf of a number of groups, including the Judiciary, the Campaign Spending Commission and the Department of Transportation.

• A specific investigation of the Hawaii State Hospital is being conducted by the AG’s Office. The Department of Health said that the temporary investigator is responsible for timely completion of of a report looking into abuse and neglect at the hospital. If 89-day hires are eliminated, DOH said the investigation may be jeopardized.

• The Department of Public Safety says the restriction called for in HB 2008 would “impose undue restrictions” and hamper the department’s ability to operate effectively. Temporary hires are for “hard-to-fill” jail and prison staffing positions such as social workers and adult corrections officers.

• The Department of Land and Natural Resources says HB 2008 “will cripple” its ability to continue operations managing public lands, water resources, minerals, forest, fish and game resources; and forest reserve and state parks, including historic sites.

Other organizations opposing the bill include the Department of Agriculture, the Department of Business, Economic Development and Tourism, the Department of Hawaiian Home Lands, the Office of Enterprise Technology Services, the Hawaii State Ethics Commission, the Department of Education and the University of Hawaii.

‘The Gray Ceiling’

It’s not the first time that there have been complaints about 89-day hires.

“The contract workers fill positions that would normally be open to younger staffers who are blocked from advancement because of what’s been called the ‘gray ceiling’ of retirees working above them,” Jim Dooley wrote in 2012 for Hawaii Reporter. He said that some AG’s Office investigators worked for years on a string of short-term contracts that allowed them to also draw state pension benefits.

Machida acknowledged to Civil Beat that limiting the number of 89-day appointments would directly impact operations of a lot of departments. As a former employee at the Department of Accounting and General Services and the AG’s office, he has experienced the need first hand.

But he said he also understands the other side of the issue, “which is trying to deal with the funding of the retirement system — and that needs to continue to be addressed.”

Machida said he believes the ERS is on a path to full funding, which the passage of HB 2008 would help, but there could be disruptions such as a downturn in investment markets.

“There are a number of different assumptions that play an important role in affecting full funding over the next 26 years,” he said.

At one point, HB 2008 contained language that would have limited an individual to one 89-day term over his or her entire life if the position was paid out of the general fund.

A later version of the bill left the number of terms blank.

Machida said a two-year limit for the 89-day appointments — with the governor’s approval — seemed reasonable, “given that there is a concerted effort in looking at recruitment and hiring practices of the state.” 

If approved by the Senate, HB 2008, which was introduced by Labor and Public Employment Chair Mark Nakashima, would then head back to the House for its consideration of the Senate amendments.

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