SB 1567: DHRD; Classification and Compensation Systems; Civil Service Positions; Comprehensive Review; Reports

A BILL FOR AN ACT

RELATING TO THE CLASSIFICATION AND COMPENSATION SYSTEMS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that state agencies are experiencing a significant labor shortage that is anticipated to worsen in the future.  According to the department of human resources development, vacant positions within state agencies increased from eighteen per cent in 2019 before the COVID‑19 pandemic to twenty-seven per cent in 2023.  While the COVID‑19 pandemic may have contributed to this increase, the department of human resources development also reported that thirty per cent of existing state employees will be eligible for retirement in the next five years.

     The legislature also finds that the class specifications of state positions that define the duties and responsibilities of the respective class, level of difficulty and authority, and minimum qualifications, and compensation for the positions have become outdated, contributing to state agencies' struggle in recruiting, hiring, and retaining employees.  Therefore, it is imperative for state departments and agencies to conduct a comprehensive review and modernization of position classification and compensation systems of their positions, to attract and retain qualified and capable employees that will effectively serve the residents of the State.

     Accordingly, the purpose of this Act is to require the department of human resources development to expeditiously conduct a comprehensive review of the classification and compensation systems for civil service positions under its jurisdiction.

     SECTION 2.  (a)  The department of human resources development shall complete a comprehensive review of the classification and compensation systems for all civil service positions that are under its jurisdiction by October 31, 2026.  The department of human resources development may contract with a third party, in accordance with chapter 103D, Hawaii Revised Statutes, to assist with the timely completion of the review.

     (b)  The department of human resources development shall submit a:

     (1)  Preliminary report of its findings and recommendations, including any proposed legislation, to the legislature no later than February 28, 2026; and

     (2)  Final report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2027.

     SECTION 3.  This Act shall take effect on July 1, 2025.

Report Title:

DHRD; Classification and Compensation Systems; Civil Service Positions; Comprehensive Review; Reports

Description:

Requires the Department of Human Resources Development to complete a comprehensive review of the classification and compensation systems for all civil service positions under its jurisdiction by 10/31/2026.  Allows the Department to contract with a third party, in accordance with the Hawaii Public Procurement Code, to assist with the timely completion of the review.  Requires reports to the Legislature.  (CD1)

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

A BILL FOR AN ACT

RELATING TO THE CLASSIFICATION AND COMPENSATION SYSTEMS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that state agencies are experiencing a significant labor shortage that is anticipated to worsen in the future.  According to the department of human resources development, vacant positions within state agencies increased from eighteen per cent in 2019 before the COVID-19 pandemic to twenty-seven per cent in 2023.  While the COVID-19 pandemic may have contributed to this increase, the department of human resources development also reported that thirty per cent of existing state employees will be eligible for retirement in the next five years.

     The legislature also finds that the class specifications of state positions that define the duties and responsibilities of the respective class, level of difficulty and authority, minimum qualifications, and compensation for the positions have become outdated, contributing to state agencies' struggle in recruiting, hiring, and retaining employees.  Therefore, it is imperative for state departments and agencies to conduct a comprehensive review and modernization of position classification and compensation systems of their positions, to attract and retain qualified and capable employees that will effectively serve the residents of the State.

     Accordingly, the purpose of this Act is to require the department of human resources development to expeditiously conduct a comprehensive review of the classification and compensation systems for civil service positions under its jurisdiction, and appropriate funds therefor.

     SECTION 2.  (a)  The department of human resources development shall complete a comprehensive review of the classification and compensation systems for all civil service positions that are under its jurisdiction by           .  The department of human resources development may contract with a third-party, in accordance with chapter 103D, Hawaii Revised Statutes, to assist with the timely completion the review.

     (b)  The department of human resources development shall submit a:

     (1)  Preliminary report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2026; and

     (2)  Final report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2027.

     SECTION 3.  There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 for the department of human resources development to conduct and complete a comprehensive review of the classification and compensation systems for civil service positions under its jurisdiction pursuant to this Act, including contracting with a third-party to assist with completing the review.

     The sums appropriated shall be expended by the department of human resources development for the purposes of this Act.

     SECTION 4.  This Act shall take effect on July 1, 3000.

Report Title:

DHRD; Executive Branch; Classification and Compensation Systems; Civil Service Positions; Comprehensive Review; Reports; Appropriations

Description:

Requires the Department of Human Resources Development to complete a comprehensive review of the classification and compensation systems for civil service positions under the jurisdiction of the Department of Human Resource Development.  Allows the Department to contract a third-party, in accordance with the Hawaii Public Procurement Code, to assist with the timely completion of the review.  Requires reports to the Legislature.  Appropriates funds.  Effective 7/1/3000.  (HD1)

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

A BILL FOR AN ACT

RELATING TO THE CLASSIFICATION AND COMPENSATION SYSTEMS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that state agencies are experiencing a significant labor shortage that is anticipated to worsen in the future.  According to the department of human resources development, vacant positions within state agencies increased from eighteen per cent in 2019 before the COVID-19 pandemic to twenty-seven per cent in 2023.  While the COVID-19 pandemic may have contributed to this increase, the department also reported that thirty per cent of existing state employees will be eligible for retirement in the next five years.

     The legislature also finds that the class specifications of state positions, defining the duties and responsibilities of the specific class, level of difficulty and authority, and minimum qualifications, and compensation for the positions have become outdated, contributing to the state agencies' struggle in recruiting, hiring, and retaining employees.  Therefore, it is imperative for the State's executive branch to conduct a comprehensive review and modernization of its classification and compensation systems to enable the state agencies to attract and retain qualified and capable employees to effectively serve the residents of the State.

     Accordingly, the purpose of this Act is to require the department of human resources development to expeditiously conduct a comprehensive review of the classification and compensation systems for the State's executive agencies, and appropriate funds therefor.

     SECTION 2.  (a)  The department of human resources development shall complete a comprehensive review of the classification and compensation systems for all positions within the State's executive branch by           .  The department of human resources development may contract with a third-party, in accordance with chapter 103D, Hawaii Revised Statutes, to assist the department in the timely completion the review.

     (b)  The department of human resources development shall submit a:

     (1)  Preliminary report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2026; and

     (2)  Final report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2027.

     SECTION 3.  There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 for the department of human resources development to conduct and complete a comprehensive review of the classification and compensation systems for the State's executive agencies pursuant to this Act, including contracting with a third-party to assist in completing the review.

     The sums appropriated shall be expended by the department of human resources development for the purposes of this Act.

     SECTION 4.  This Act shall take effect on July 1, 2050.

Report Title:

DHRD; Executive Branch; Classification and Compensation Systems; Comprehensive Review; Reports; Appropriations

Description:

Requires the Department of Human Resources Development to complete a comprehensive review of the classification and compensation systems for all positions within the State's executive branch.  Allows the Department to contract with a third-party, without regard to the Hawaii Public Procurement Code, to assist the Department in its timely completion of the review.  Requires reports to the Legislature.  Appropriates funds.  Effective 7/1/2050.

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

A BILL FOR AN ACT

Relating to the Classification and Compensation systems.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that state agencies are experiencing a significant labor shortage that is anticipated to  worsen in the future.  According to the department of human resources, vacant positions within state agencies increased from eighteen per cent in 2019 before the COVID-19 pandemic to twenty-seven per cent in 2023.  While the COVID-19 pandemic may have contributed to this increase, the department also reported that thirty per cent of existing state employees will be eligible for retirement in the next five years.

     The legislature also finds that the class specifications of state positions, defining the duties and responsibilities of the specific class, level of difficulty and authority, and minimum qualifications, and compensation for the positions have become outdated, contributing to the state agencies' struggle in recruiting, hiring, and retaining employees.  Therefore, it is imperative for the State's executive branch to conduct a comprehensive review and modernization of its classification and compensation systems to enable the state agencies to attract and retain qualified and capable employees to effectively serve the residents of the State.

     Accordingly, the purpose of this Act is to require the department of human resources development to expeditiously conduct a comprehensive review of the classification and compensation systems for the State's executive agencies, and appropriate funds thereof.

     SECTION 2.  (a)  The department of human resources development shall complete a comprehensive review of the classification and compensation systems for all positions within the State's executive branch by           .  The department of human resources development may contract with a third-party, without regard to chapter 103D, Hawaii Revised Statutes, to assist the department in the timely completion the review.

     (b)  The department of human resources development shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of     .

     SECTION 3.  There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 for the department of human resources development to conduct and complete a comprehensive review of the classification and compensation systems for the State's executive agencies pursuant to this Act, including contracting with a third-party to assist in completing the review.

     The sums appropriated shall be expended by the department of human resources development for the purposes of this Act.

     SECTION 4.  This Act shall take effect on July 1, 2025.

Report Title:

DHRD; Executive Branch; Classification and Compensation Systems; Comprehensive Review; Report; Appropriations

Description:

Requires the Department of Human Resources Development to complete a comprehensive review of the classification and compensation systems for all positions within the State's executive branch.  Allows the Department to contract with a third-party, without regard to the Hawaii Public Procurement Code, to assist the Department in its timely completion of the review.  Requires the Department to report to the Legislature.  Appropriates funds.

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

CONFERENCE COMMITTEE REP. NO. 147

Honolulu, Hawaii

                 , 2025

RE:    S.B. No. 1567

       S.D. 1

       H.D. 1

       C.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir and Madam:

     Your Committee on Conference on the disagreeing vote of the Senate to the amendments proposed by the House of Representatives in S.B. No. 1567, S.D. 1, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE CLASSIFICATION AND COMPENSATION SYSTEMS,"

having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.

     The purpose of this measure is to:

     (1)  Require the Department of Human Resources Development to complete a comprehensive review of the classification and compensation systems for civil service positions under the jurisdiction of the Department of Human Resources Development;

     (2)  Allow the Department to contract with a third party, in accordance with the Hawaii Public Procurement Code, to assist with the timely completion of the review;

     (3)  Require reports to the Legislature; and

     (4)  Appropriate funds.

     Your Committee on Conference finds that many state agencies are experiencing staffing shortages which hinder the delivery of critical public services, such as the Supplemental Nutrition Assistance Program, Med-QUEST, and unemployment benefits.  Your Committee on Conference further finds that high vacancy rates are exacerbated by outdated classification and compensation systems for state employee positions, which impede state hiring efforts.  Therefore, this measure will reassess the qualifications and compensation packages for certain positions to improve retention and recruitment of qualified candidates to public service.

     Your Committee on Conference has amended this measure by:

     (1)  Specifying that the Department of Human Resources Development shall complete the comprehensive review of the classification and compensation systems for all civil service positions that are under its jurisdiction by October 31, 2026;

     (2)  Requiring the Department of Human Resources Development to submit its preliminary report to the Legislature by February 28, 2026, rather than twenty days prior to the convening of the Regular Session of 2026;

     (3)  Deleting language that would have appropriated funds to the Department of Human Resources Development to conduct and complete a comprehensive review of the classification and compensation systems for civil service positions under its jurisdiction;

     (4)  Amending section 1 to reflect its amended purpose;

     (5)  Changing its effective date to July 1, 2025; and

     (6)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of S.B. No. 1567, S.D. 1, H.D. 1, as amended herein, and recommends that it pass Final Reading in the form attached hereto as S.B. No. 1567, S.D. 1, H.D. 1, C.D. 1.

Respectfully submitted on behalf of the managers:

STAND. COM. REP. NO.  1920

Honolulu, Hawaii

                , 2025

RE:   S.B. No. 1567

      S.D. 1

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Finance, to which was referred S.B. No. 1567, S.D. 1, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE CLASSIFICATION AND COMPENSATION SYSTEMS,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Require the Department of Human Resources Development to conduct a comprehensive review of the classification and compensation systems for state executive agencies;

     (2)  Allow the Department of Human Resources Development to contract a third-party to assist with the completion of the review; and

     (3)  Appropriate funds to support the completion of the review.

     Your Committee received testimony in support of this measure from the Department of Human Resources Development and Holomua Collaborative.

     As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1567, S.D. 1, H.D. 1, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Finance,

STAND. COM. REP. NO.  1322

Honolulu, Hawaii

                , 2025

RE:   S.B. No. 1567

      S.D. 1

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Labor, to which was referred S.B. No. 1567, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE CLASSIFICATION AND COMPENSATION SYSTEMS,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Require the Department of Human Resources Development to conduct a comprehensive review of the classification and compensation systems for state executive agencies;

     (2)  Allow the Department of Human Resources Development to contract a third-party to assist with the completion of the review; and

     (3)  Appropriate funds to support the completion of the review.

     Your Committee received testimony in support of this measure from the Department of Human Resources Development and Holomua Collaborative.

     Your Committee finds that the number of vacant positions in the State was twenty-three percent in 2023, and, by 2029, thirty percent of state employees will be eligible for retirement, further increasing the vacancy rate unless the hiring rate outpaces quitting and retirement rates.  Your Committee also finds that the class specifications of state positions, which establish minimum requirements, duties, responsibilities, pay grades, and levels of authority are outdated and contribute to the difficulty of filling vacancies.  Your Committee further finds that high vacancy rates exacerbate certain agencies from dispensing critical public services, such as SNAP, MedQuest, and unemployment benefits.  This measure seeks to reassess the qualifications and compensation packages for certain positions to improve overall retention and recruitment of qualified candidates.

     Your Committee has amended this measure by:

     (1)  Limiting the scope of this review to civil service positions under the Department of Human Resources Development's jurisdiction;

     (2)  Changing the effective date to July 1, 3000, to encourage further discussion; and

     (3)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     Your Committee respectfully requests your Committee on Finance, should it deliberate on this measure, to consider an appropriation amount of $1,750,000.

     As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1567, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1567, S.D. 1, H.D. 1, and be referred to your Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Labor,

STAND. COM. REP. NO. 680

Honolulu, Hawaii

RE:    S.B. No. 1567

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B. No. 1567, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE CLASSIFICATION AND COMPENSATION SYSTEMS,"

begs leave to report as follows:

     The purpose and intent of this measure is to require and appropriate moneys for the Department of Human Resources Development to expeditiously conduct a comprehensive review of the classification and compensation systems for state executive agencies.

     Your Committee received written comments in support of this measure from the Department of Human Resources Development.

     Your Committee recognizes that state agencies are short staffed, and this problem has been exacerbated by the coronavirus disease (COVID-19) pandemic and an aging employee population.  Your Committee also recognizes that the State's antiquated classification and compensation systems for state employee positions impede the State's efforts to recruit, hire, and retain qualified employees.  Accordingly, your Committee finds that modernizing the State's hiring classifications and compensation systems, as anticipated by this measure, may help the State attract and retain qualified employees.

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1567, S.D. 1, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

STAND. COM. REP. NO. 54

Honolulu, Hawaii

RE:    S.B. No. 1567

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committee on Labor and Technology, to which was referred S.B. No. 1567 entitled:

"A BILL FOR AN ACT RELATING TO THE CLASSIFICATION AND COMPENSATION SYSTEMS,"

begs leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Require the Department of Human Resources Development to complete a comprehensive review of the classification and compensation systems for all positions within the State's executive branch by a certain date;

     (2)  Allow the Department of Human Resources Development to contract with a third-party without regard to the Hawaii Public Procurement Code;

     (3)  Require the Department of Human Resources Development to submit a report to the Legislature; and

     (4)  Appropriate funds.

     Your Committee received testimony in support of this measure from the Department of Human Resources Development.

     Your Committee received comments on this measure from the State Procurement Office.

     Your Committee finds that state agencies in Hawaii are experiencing a significant labor shortage that has only been exacerbated by the COVID-19 pandemic and an aging state employee workforce.  Your Committee further finds that the State faces significant hurdles in recruiting, hiring, and retaining employees due to the antiquated classification and compensation systems for state positions impeding the State from remaining a competitive employer in the State.  Therefore, this measure will enable the State to modernize its hiring classifications and systems to attract and retain qualified employees throughout the State's executive agencies.

     Your Committee notes that this measure contains an unspecified appropriation amount.  Should your Committee on Ways and Means choose to deliberate on this measure, your Committee respectfully requests that it consider inserting an appropriation amount of $1,000,000 for the Department of Human Resources Development to complete a comprehensive review of the classification and compensation systems for all positions within the State's executive branch, including contracting with a third-party to assist in the review.

Your Committee has amended this measure by:

     (1)  Specifying that the Department of Human Resources Development may contract with a third party for assistance in accordance with the Hawaii Public Procurement Code;

     (2)  Requiring the Department of Human Resources Development to submit a preliminary report to the Legislature prior to the convening of the regular session of 2026 and a final report to the Legislature prior to the convening of the regular session of 2027;

     (3)  Inserting an effective date of July 1, 2050, to encourage further discussion; and

     (4)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Labor and Technology that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1567, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1567, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Labor and Technology,