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A Big Bill From The Pandemic Is Coming Due: Hazard Pay For State And County Workers

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A Big Bill From The Pandemic Is Coming Due: Hazard Pay For State And County Workers

Jan 22, 2024 | 8:48 am ET
By Kevin Dayton and Ben Angarone/Civil Beat
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City Managing Director Michael Formby, right, and director of Budget and Fiscal Services Andy Kawano brief the Honolulu City Council’s budget committee on preparations to cover the cost of pandemic hazard pay for city workers. (Screenshot/2024)
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City Managing Director Michael Formby, right, and director of Budget and Fiscal Services Andy Kawano brief the Honolulu City Council’s budget committee on preparations to cover the cost of pandemic hazard pay for city workers. (Screenshot/2024)

Public worker unions in Hawaii are aggressively pursuing claims for hazard pay that was never paid out to government employees during the pandemic, raising the possibility that the state and counties may soon owe hundreds of millions of dollars in back pay.

Arbitration proceedings on hazard pay have been playing out in Honolulu, Kauai, Maui and Hawaii counties as well as with the state Department of Education.

The discussions are complicated by the involvement of different unions, county and state officials as well as different contract specifications, decisions about who should qualify and budget concerns. But there is a precedent.

The template for settlements and awards likely will be the Hawaii Government Employees Association arbitration award on Maui in 2022.

That decision confirmed the pandemic qualified as a “hazard” under the HGEA contract and determined more than 1,300 employees were entitled to back pay for the first two years of the pandemic.

The union then negotiated with Maui County to resolve the details of who would be paid and how much they would get. Employees there began receiving hazard compensation payouts at the end of 2022.

That Maui payout amounted to back pay of 15% for covered HGEA members, although some workers such as water safety officers and driver’s license examiners who frequently dealt with the public qualified for back pay of 25% for the period covered by then-Gov. David Ige’s emergency proclamations.

Those percentages were specified in the HGEA contracts. Maui also negotiated a separate settlement with the United Public Workers union for 20% hazard pay for 18 months for covered members.

The hazard pay did not apply to employees who worked from home, or for periods when employees were on leave or vacation.

The other counties have been studying the Maui payout and crunching the numbers to see how similar decisions or agreements could affect their budgets.

Budgetary Concerns

The City and County of Honolulu is taking steps to set aside $80 million to fund hazard pay claims by the unions, but Managing Director Mike Formby told the City Council earlier this month he does not know if that amount will cover the entire hazard pay tab for all of the public worker unions.

The goal of the administration “is to enter into hopefully settlement negotiations in good faith, and figure out how we can come up with a number that we can live with in our city budget,” he said.

Honolulu City Council Chair Tommy Waters indicated there is strong sentiment on the council to pay the public workers. Contracts with HGEAUPW and the State of Hawaii Organization Of Police Officers have specific provisions for hazard pay.

“This hazard pay is like a bill, like an electricity bill,” Waters said in an interview. “It’s a bill that we’ve got to pay, otherwise we’re going to get sued.”

“In my mind the hazard is real, and I know the council is in support,” Waters said. But he added the plight of city bus drivers raises a troubling fairness issue.

The drivers worked for many months during the pandemic and were clearly at risk, but do not have hazard pay language in their contracts, he said.

“To me, they’re deserving, but I don’t know where we’re going to find the money for them,” he said.

Formby told council members on Jan. 9 that Honolulu has completed “an initial arbitration with SHOPO” on the hazard pay issue, and is in a continuing arbitration proceeding with UPW.

Despite the hefty potential cost to taxpayers, the arbitration cases have advanced with little public notice because the collective bargaining process is considered confidential.

The City Council formally requested in a resolution that the administration provide hazard pay, and Formby told council members that “we think it’s also important to be fair.”

“I can tell you that the administration is very concerned about the fiscal year ’25 budget if we end up paying hazard pay. We think it will have a significant impact, and it will potentially affect our ability to fund operations,” he added.

On the Big Island, Managing Director Deanna Sako said the total tab for back hazard pay for all of the covered union workers in Hawaii County could be as much as $50 million. Much of that money would likely go to police.

If Hawaii County is required to pay that much, that would be nearly 10% of the county’s general fund budget “and that’s a significant amount, so it’s going to be the whole community that will bear the impact of that,” Sako said.

‘Big Struggle’

The hazard pay obligation of the largest public employer — the state of Hawaii — is still unresolved because Ige’s administration declined to discuss or negotiate the issue with the unions, according to HGEA Executive Director Randy Perreira.

Under Gov. Josh Green there has been “talk of a settlement” on the hazard pay issue, “but they haven’t approached us yet,” said Perreira. HGEA is the state’s largest union, and Perreira said he expects the two sides will begin the process of selecting an arbitrator soon.

HGEA has taken the hazard pay issue to arbitration with the DOE, and a decision in that case is pending. Nanea Kalani, spokeswoman for the department, said in a written statement that “the department is unsure as to who may qualify, and the associated costs of the ongoing arbitration.”

But hazard pay will not apply to public school teachers. Osa Tui Jr. president of the Hawaii State Teachers Association, said in a written statement that “HSTA does not have a hazard pay in our contract, and so we had no basis on which to make a claim or file a grievance.”

Green declined to comment on the issue of hazard pay for unionized workers, but Lt. Gov. Sylvia Luke said “there has been no formal negotiation. There may have been preliminary, informal discussions, but nothing formal.”

Luke said the “big struggle” is sorting out who gets how much pay based on where they worked and how often they worked. Without those parameters, it is difficult to guess how much the hazard pay issue might eventually cost the state, she said.

Corrections Sgt. Paul Kyles, who has worked for 25 years in the Oahu Community Correctional Center, gets angry just talking about the hazard pay issue.

In the early days of the pandemic, staff in the state’s largest jail watched as Covid-19 caught fire in correctional systems across the mainland. Everyone knew the coronavirus would eventually sweep through Hawaii prisons and jails, Kyles said.

There were rumors of extensive preparations being made by administration to prepare for an outbreak, but the actual response in the early days of the pandemic was “pathetic,” consisting mostly of cloth masks issued to staff and inmates, he said.

Front-Line Workers

Inmate populations in jails are transient, with people regularly entering and exiting, which increased the odds of someone bringing the virus inside. OCCC for a time had the largest known cluster of cases in the state, and Kyles said staff from the jail “were treated like lepers” outside the facility.

Effective protective gear and even cleaning supplies were in short supply at OCCC, and employees who worked closely with prisoners had no idea how to protect themselves inside, said Kyles, who is chief union steward for UPW at the jail.

Corrections officers would stare in disbelief as medical staff at the jail entered inmate housing units in “space suits,” covered head to toe in protective gear. The guards had no access to that kind of gear, Kyles said.

Some corrections officers became seriously ill with the coronavirus, and staff regularly worked 24-hour shifts or longer to cover essential posts and keep the facility operating.

“You know working those kinds of hours your immunity is going to go down, and now you’re in a module with 180 positive cases,” Kyles said. “Do the math.” The coronavirus was eventually blamed for the deaths of nine Hawaii inmates.

United Public Workers State Director Kalani Werner, who also worked as a corrections sergeant at OCCC, declined a request for an interview about hazard pay or the arbitration cases.

The HGEA chief said hazard pay has “been in our contracts from the beginning, since the 1970s, and maybe this is the first time that language will be truly implemented on a broad scale, and hopefully never again.”

“These people were required to report to work, they were exposed to Covid, and upon returning hjome were exposing — potentially — their families and friends and others to this potential hazard,” Perreira said. “For that, they should be compensated.”

“The threat was real, and the anxiety for all of us was real,” he said. “And it’s too easy today because all of us now treat Covid as if it’s just a bad flu, but we’ve got to go back three years in time and remember just how challenging a time we were living in.”