HONOLULU – State Director of Human Resources Development Marie Laderta today notified the United Public Workers and the Hawai‘i Government Employees Association of possible reductions in force (RIF) of more than 1,100 state employees covered by collective bargaining agreements.
“This is the first step necessary to begin the notification period under reduction in force procedures,” Laderta stated. “We have informed the two public employee unions that we are available to consult with them should they elect to do so.”
Written notification to each employee will take place later this month to provide them with adequate time and opportunity to determine their options. As a courtesy, informal discussions and communications were held with employees prior to them learning that their names would appear on a list provided to their union.
“I remain hopeful that we will not have to undertake large-scale layoffs,” Governor Linda Lingle said. “I continue to believe furloughs or salary reductions are preferable to having some employees lose their jobs. My Administration will continue to work tirelessly to achieve a resolution of collective bargaining negotiations,” Governor Lingle added.
The RIF procedures may allow certain workers to “bump” employees with less seniority. The procedures may also allow certain individuals to retain their old salary although they may wind up in a lower-level job that pays less money, sometimes referred to as “red circling.” Because the bumping process may occur over several months, it is not possible to predict precisely how much money the reductions in force may save the State until after the entire process is completed. Based on the outcome of the initial set of reductions in force, the State will determine whether additional reductions will be required.
“The State of Hawai‘i is facing a very serious budget crisis and labor costs make up nearly 70 percent of our entire state budget,” Governor Lingle said. “Every day that passes without the implementation of labor savings will result in deeper cuts in the future to make up the shortfall.”
Many states around the country are finding themselves in a deepening budget hole, illustrating the importance of fiscal restraints.
Pennsylvania is withholding pay from thousands of state employees for days worked in July, because a budget was not enacted before a July 1 deadline.
Illinois borrowed $3.5 billion to fund its operations and postponed $3.2 billion in vendor payments in order to enact a budget, which caused rating agencies to place their bonds under review for a possible downgrade.
Facing a deficit of more than $26 billion and an inability to restrict spending, California’s crisis continues to intensify with the state issuing IOUs, while its bonds were recently downgraded to near-junk status.