RELATING TO TRANSFER OF EMPLOYEE BENEFITS.

SB2120

THE SENATE

S.B. NO.

2120

THIRTY-THIRD LEGISLATURE, 2026

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
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.

����
SECTION 2.
�

Both houses of the legislature shall adopt policies as necessary to
ensure that an employee separating employment from the legislature may 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.

����
SECTION 3.
�

Each county shall adopt ordinances and amend policies as necessary to
ensure that an employee separating employment from the county may 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.

����
SECTION 4.
�

For the purposes of this part, "employee"
means a person who is eligible to participate in the employees' retirement
system of the State of Hawaii as defined in section 88-21, 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 [
prior to
]
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 [
prior to
]
before

July 1, 1996, who has at least ten years of credited service [
prior to
]
before

a break in service.

����
For
the purposes of this section:

����
"Break
in service" means to leave state or county employment for more than [
ninety
calendar days
]
:

����
(1)
�
Ninety calendar days

before
returning to state or county employment[
.
]
; provided that
the
leave begins before July 1, 2026; or

����
(2)
�
O
ne full year before
returning to state or county employment; provided that
the
leave begins on or after July 1, 2026
.

����
"Transfer"
means to leave state or county employment and return to state or county
employment within [
ninety calendar days.
]
:

����
(1)
�
Ninety calendar days; provided that the
leave begins before July 1, 2026; or

����
(2)
�
One full year; provided that
the
leave begins on or after July 1, 2026
.
"

����
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 [
prior to
]
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 [
prior to
]
before
July 1, 2001, who has at least ten years of
credited service [
prior to
]
before
a break in service.

����
F
or
purposes of this section[
:

����
"Break
in service" means to leave state or county employment for more than ninety
calendar days before returning to state or county employment.

����
"Transfer"
means to leave state or county employment and return to state or county
employment within [ninety calendar days.
]
, "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 July
1, 2026.

INTRODUCED BY:

_____________________________

Report Title:

Public
Employees 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.
�
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 one full
year.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.