University payroll lag is wrong

ON July 14, the U.S. 9th Circuit Court of Appeals ruled on the University of Hawaii Professional Assembly (UHPA) et al. vs. Benjamin J. Cayetano et al, better known as the "payroll lag" case.

This complicated story comes down to this: The State of Hawaii signed a contract with UHPA that maintained traditional pay dates for faculty. But almost before those signatures were dry, the state passed a law to delay these pay dates.

UHPA sued. Last summer, U.S. District Court Judge Alan Kay issued a preliminary injunction preventing the state from imposing the payroll lag on UH faculty. His decision was based on the likelihood that such a statutory payroll lag would interfere with contractual rights protected by the U.S. Constitution.

The 9th Circuit's ruling backed the judge in every respect. There should be no doubt that the preliminary injunction was correctly granted.

In response, the state administration emitted a rather sour press release that derided the faculty for selfishly standing up for their rights

The practical question is, "So what now?" In response, your July 16 editorial concluded that the state should return to the bargaining table, and finally negotiate in good faith with UHPA over how to impose the lag.

Your newspaper stated that "the practice of making payment for work already performed is accepted throughout the private sector and is not too much to ask." But consider the following:

It is illegal to bargain over a payroll lag. Under Act 100 of 1999 (former SB 1518, CD 1), bargaining over public sector "cost items" is banned until July 2001.

The presumption that a UH payroll lag would prevent overpayments is simply wrong. With hourly workers, who punch a clock and pull random overtime, mistakes can certainly be made if you cut a check before the pay period is over.

Something that the UH faculty have in common with other educational workers is that they create value over, say, nine months, but their pay is stretched out over 12. If the state is worried about accidental overpayment, it should recall that it is already lagging faculty pay up to a year at a time. Some portion of September's earnings is put aside to fund a check next year in August. You'd think one-fourth of an employee's salary being set aside would be security enough.

As of the time this case was heard on motion, 238 UH faculty members earned less than $30,000 per year and that's with advanced degrees. Please forgive these struggling educators if they are not in the mood for give-backs.

The UH is in a global market for talent while pinned against a high cost of living. Salary cuts don't help.

As budget director, Earl Anzai removed one paycheck's worth of money from the UH budget in expectation of imposing the lag. When it turned out to be illegal, the UH asked for its money back. No dice. The state kept the money anyway. So the state has already achieved whatever "savings" might be created by a lag.

The governor says that "two" payroll systems are costly. Actually, state witnesses testified that, as of fall 1998, the dual payroll had been handled with some overtime but no extra staff had been hired. Maybe with more experience since then, it has figured out how to add staff.

So what now? We could all litigate some more. Or we could fix the underlying problem. Basically, government downtown should not be obsessing about things the UH should be handling on its own.

We should assign UH payroll functions to the UH itself. We should permit the regents and the faculty to bargain together directly, on all topics, including pay and pay dates, to be resolved finally between them without downtown interference.

COMBINED with lump-sum budgeting for the UH -- one appropriation and that's it for the year -- this would advance the stalled cause of UH autonomy, put the UH on an equal footing with other well-respected schools, make a proper two-sided bargaining table out of the current confusing triangular one (state, regents and faculty), and reduce the number of aspirin consumed by the judiciary. It would take legislation, but it could be done.

The main obstacle is the pervasive mindset that conceives of the UH as just another department in the executive branch of state government, its regents as short-term political co-directors thereof, and its employees as hostages in the eternal struggle for supremacy between parties and factions.

All governance problems at the UH are related to this same root cause.

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T. Anthony Gill is an attorney for the
University of Hawaii Professional Assembly
on the UH payroll case.