§78-12  Salary withheld for indebtedness tothe government.  (a)  In case any officer, agent, employee, or other personin the service of a jurisdiction is indebted to a jurisdiction and theindebtedness has been determined by a hearing pursuant to chapter 91, upondemand of the officer charged with the duty of collecting the indebtedness, thedisbursing officer charged with the duty of paying the indebted officer, agent,employee, or other person, after notice to the indebted person, shall withholdone-quarter of the salary, wages, or compensation due the indebted person andpay the same, from time to time as the same shall become due, to the officercharged with the duty of collecting the indebtedness, until the full amount ofthe indebtedness, together with penalties and interest thereon, is paid.

(b)  If the indebtedness has arisen or beenincurred by reason of the indebted officer, agent, employee, or other personhaving embezzled, stolen, or otherwise unlawfully acquired any moneys or otherproperty of a jurisdiction, the whole amount of the salary, wages, orcompensation, or so much thereof as may be required to pay the indebtedness infull, shall be withheld and paid over to the officer charged with the duty ofcollecting the indebtedness.

(c)  The officer, agent, employee, or otherperson in the service of the jurisdiction, alleged to be indebted to ajurisdiction, may waive the right to a hearing to determine the indebtednessand instead assign by contract to the officer charged with the duty of collectingdebts:

(1)  The priority right to payment of the total amountof the alleged indebtedness; and

(2)  The right of the officer to deduct from each andevery periodic payment normally due the assignor an amount equal to the maximumlegally permissible amount deductible under garnishment law until the totalamount owing is paid in full.

For purposes of this section, a person shall bedeemed to waive the hearing if the person fails to request a hearing withinfifteen days from the date the person was notified of the indebtedness and theopportunity to request a hearing.

(d)  The operation of all garnishment processserved upon the disbursing officer shall be stayed until the indebtedness hasbeen fully paid.

(e)  If the indebtedness has occurred as a resultof salary or wage overpayment, the disbursing officer shall determine theamount of indebtedness and notify the employee in writing of the indebtedness;provided that, to be an actionable cause of action, the determination andnotice to the employee shall be made within two years from the date of thesalary or wage overpayment, and not after.  If the employee contests thedisbursing officer's determination of indebtedness, the employee may request ahearing pursuant to chapter 91.

(f)  Regardless of whether a contesteddetermination of indebtedness is pending, the disbursing officer shall commenceimmediate recovery of the indebtedness as provided in this subsection.  If theindebtedness is equal to or less than $1,000, the disbursing officer shall immediatelydeduct from any subsequent periodic payment normally due the employee anyamount up to the total amount of indebtedness and for indebtedness greater than$1,000, the disbursing officer shall deduct:

(1)  An amount agreed to by the employee and theappointing authority, but not less than $100 per pay period; or

(2)  One-quarter of the salary, wages, or compensationdue the employee until the indebtedness is repaid in full.

In addition to paragraph (1), an employee and theappointing authority may agree to offset any remaining amount of indebtednessby applying the current value of appropriate leave or compensatory time creditsposted in the employee's respective accounts as balances that would otherwisebe payable in cash upon separation from service; provided that credits shallnot be applied to any extent that would require a refund of any moneys alreadydeducted or repaid or that would require the payment of any moneys to theemployee equivalent to a cashing out of leave or compensatory time credits.

(g)  If the determination of indebtedness wascontested and is subsequently found to be incorrect:

(1)  Any moneys repaid or deducted under subsection(e) for any indebtedness in excess of the correct amount shall be promptlyrefunded with interest as specified by section 103-10; or

(2)  All leave or compensatory time credits applied tooffset any indebtedness in excess of the correct amount shall be re-credited tothe employee's respective leave or compensatory time accounts and shall notresult in a cash payment.

(h)  If an employee is entitled to contest thedetermination of indebtedness under a collective bargaining grievanceprocedure, that procedure shall be used in lieu of a hearing under subsection(e).  A collective bargaining agreement may include overpayment recoveryprocedures; provided that the parties do not agree on any provision that wouldbe inconsistent with subsections (f) and (g).

(i)  Where an officer, agent, employee, orother person in the service of a jurisdiction is compensated in an amountgreater than or less than that to which the person is entitled, thedetermination of the officer's, agent's, employee's, or other person's averagefinal compensation for the period of indebtedness shall be calculated inaccordance with section 88-81; provided that the compensation used to calculatethe average final compensation shall be the compensation the officer, agent,employee, or other person should have been paid during that period. [L 1911, c120, §1; RL 1925, §163; am L 1933, c 191, §1; RL 1935, §100; am L 1937, c 14,§2; RL 1945, §453; RL 1955, §5-14; am L 1957, c 152, §1; HRS §78-12; am L 1975,c 25, §1; am L 1996, c 231, §4; am L 2000, c 253, §77; am L 2001, c 55, §35 andc 123, §§12, 13; am L 2009, c 190, §1]

 

Attorney General Opinions

 

  Withholding of salary for indebtedness to federal governmentnot authorized.  Att. Gen. Op. 71-11.

 

Case Notes

 

  This scheme of collecting indebtedness, as applied to onedetermined after hearing to be liable on parking violations at the Universityof Hawaii, is not unconstitutional.  379 F. Supp. 65.

  As a rule, salary follows title, irrespective of amount ofservice performed.  8 H. 19.