Senators, unions spar over dispute mechanism and 'repricing' process for state employee classifications

During testimony on HB1664 and HB1658 the Senate Committee on Labor and Technology devoted extended time to how disputes over the Hawaii Employer-Union Health Benefits Trust Fund (EUTF) and "repricing" requests should be resolved.

Nui Sabast, legislative manager for the Hawaii Government Employees Association (HGEA), told senators that "the current negotiating process does not have a dispute mechanism," and said unions often end up with unilateral state offers on employee-employer splits. Sabast said unions want a workable dispute process and were open to listing agreed arbitrators for repricing disputes.

State representatives and agency directors pressed back on the idea that any arbitrator could resolve technical classification issues. Director Hashimoto (agency title in record: Director) described the Merit Appeals Board as a statutorily established panel with civil-service expertise: "The Merit Appeals Board...by statute has to be individuals who are familiar with state civil service...they operate independently," she said, adding that the Board's decisions "oftentimes rule in the union's favor." Hashimoto also cautioned that repricing is a technical, internal classification process and not a market-rate pay adjustment. As an example, she explained that raising one classification (for example from SR20 to SR22) without adjusting comparable classes creates internal equity problems.

Senators probed alternatives. Some members asked whether a neutral single arbitrator would have the needed technical knowledge; HGEA representatives said they preferred a neutral arbitrator list but opposed using the Merit Appeals Board if it were employer-controlled. Director Hashimoto noted the Board contains an appointed union representative and a neutral chair (the chair position was vacant at the time), and that the Board is intended to have knowledge of civil-service classification principles.

Why it matters: The dispute forum and repricing process affect how classification and pay-equity issues are resolved for thousands of state employees. A mechanism that lacks technical expertise could create unintended budgetary or equity consequences; conversely, a mechanism perceived as employer-controlled risks losing union buy-in.

What remains unresolved: Committee members requested continued discussions among UTF, HRD/DHERD, BNF, and union representatives to develop a dispute process that balances technical expertise with neutrality. No final procedural change was enacted in the hearing; HB1664/HB1658 were moved out of committee with the recorded reservations and instructions for follow-up.