Hawaii lawmakers look to deter, recover salary overpayments

HONOLULU (AP) — Hawaii officials are working to reclaim balances on nearly $1.4 million in salary overpayments mistakenly made to public employees as far back as the 1990s.

The outstanding balance across state departments was about $394,700 as of Dec. 31 after amounts recovered through installment payments and amounts referred to the attorney general for collection are deducted.

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Monthly balances in 2017 ranged from a low of $387,542 in November to a high of $613,883 in March, according to the Department of Accounting and General Services, which administers the state’s payroll.

Democratic State Sen. Donna Mercado Kim said those balances are too high and introduced legislation aimed at motivating state departments to more aggressively recover balances owed and deter salary overpayments in the first place.

“The problem is we have automatic salary payments,” said Kim, the lead sponsor of the bill. “You automatically will get your paycheck every two weeks unless notified otherwise.”

Most of the overpayments happen when employees call in sick or take vacation when they don’t have enough or have exhausted their paid leave, Kim said.

“So when you use up all of your leave but you take sick leave anyway or go on vacation, the system doesn’t pick that up. When the payroll goes in, you get paid the full amount,” she said.

“When the system realizes, ‘Oh, this person doesn’t have leave,’ now the system realizes that they overpaid you.”

Kim’s bill would require state agencies to deduct overpayment costs from their annual budget requests to the Legislature and place employees who exhaust their sick leave on a manual payroll system.

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An earlier provision that would have allowed the state Employees’ Retirement System to garnish the pensions of retirees who owe the state for overpayments has been removed.

Kim said state departments aren’t taking advantage of an existing state law that allows “indebtedness” to the state, including salary overpayments, to be promptly recovered via payroll.