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Contract Negotiations Update: Favored Nation Implementation - June 12, 2012

June 12, 2012

This is an update regarding the implementation of the “favored nation” provision of our negotiated settlement with the various employers.

Since our last update in late April, we’ve made considerable progress with the employers to implement favored nation as follows:

1. Salary Schedules Effective March 1, 2012

As previously reported, effective March 1, 2012, the salary schedules for the State Executive Branch, Judiciary, University of Hawaii, Department of Education and the City & County of Honolulu was replaced with the salary schedules in effect on June 30, 2009. The restoration of the salary schedules did not mean that employees would receive a pay increase on March 15th or 20th (the 5% temporary salary reduction is still in place for most), but it does favorably impact those who receive premium pay based on the salary schedule rates.

The Employer will reimburse employees and former employees the dollar difference for all payments (e.g., differentials, vacation payout, etc.,) that were affected by the temporary 5% salary reduction to the base salary for the period from July 1, 2011 to February 29, 2012. Different jurisdictions may have different timetables for this reimbursement, but it may take several months up to a year for the jurisdictions to make payment.

2. Additional Supplemental Time Off (STO)

The Employer will provide employees with four (4) additional days of STO (to be re-defined) during the current fiscal year for a total of 13 days. Employees will receive thirteen (13) days for fiscal year 2012-2013. Each affected jurisdiction will develop an implementation plan in consultation with the HGEA. Employees will continue to be able to request time off at their discretion provided the time off is taken by the end of the contract period.

3. Employer-Union Health Benefits Trust Fund (EUTF)

We have been seeking compensation for HGEA employees as a result of UPW Unit 1 employees receiving more employer EUTF contributions (60-40 vs. 50-50) for five months from July 1, 2011 to November 30, 2011. As previously reported, the UPW Unit 1 settlement also included one (1) additional day of unpaid leave (a total of 14 unpaid days for FY 2011-2012), which is roughly equivalent to the difference in the Employers’ EUTF payment between a 50-50 split and a 60-40 split for one (1) month.

As a result of our favored nation provision, the Employer has agreed to reimburse current and former HGEA bargaining unit employees who were enrolled in the EUTF during any time between July 1, 2011 and November 30, 2011 up to a maximum of four (4) months of the EUTF premium dollar difference between what the HGEA bargaining unit employee paid and what a UPW bargaining Unit 1 employee would have paid for the exact same plan. Reimbursements for these differences in premiums will take time. The employer will endeavor to reimburse employees no later than December 31, 2012.

4. Exemptions from the 5% Temporary Salary Reduction – State Executive Branch Only

Positions within programs funded 100% from non-general funds or positions funded 100% from federal funds in which HGEA employees work that have been reviewed and approved by the State Budget Director will be exempt from the 5% temporary salary reduction retroactive to July 1, 2011.

HGEA bargaining unit positions in programs already identified in the UPW Unit 1 settlement have had their salaries restored effective March 1, 2012. Other affected employees will have their salaries restored effective July 1, 2012. Retroactive salary payments owed to these employees will be made within 90 days.

Because these employees will be “made whole” retroactive to July 1, 2011 as though they took no salary reduction, they will no longer be eligible for “supplemental time-off” and will forfeit any accumulated supplemental time-off they have. In addition, affected employees will eventually be required to substitute any “supplemental time-off” taken with other paid leave (e.g. vacation leave, sick leave, CTO) in accordance with procedures that are developed between the Employer and the Union.

We will provide more specific information regarding what State Executive Branch positions are exempt from the temporary 5% salary reduction as that information becomes available.

There will be Stop Work Informational Meetings (SWIMs) scheduled statewide to explain this favored nation agreement and implementation. We will also continue to provide updates to members via eBulletin and our HGEA website.

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