When is an 89-day temporary job contract not a temporary job contract? In Hawaii, it’s when the contract gets extended time and time again for the same government worker, sometimes to the tune of 10 or 11 years. This practice has allowed some government retirees to keep their union pensions and generous medical benefits intact, while picking up lucrative "short-term" contracts that extend for years. Like cases of overtime "spiking" near the end of a career to boost pension pay, this is another galling example of gaming the system that needs to be limited.
More than 150 city or state jobs are now filled by retirees who work at their previous wages on 89-day contracts, which preserve their benefits. Such three-month stints, used properly, can be justified — for purposes of continuity, transition or training. But it turns problematic when it becomes a limitless license to indulge hiring favoritism, and raises serious questions about whether their work can and should be taken over by permanent employees. One investigator for the state attorney general has racked up 11 years of short-term contracts since his retirement, while high-paid city retirees have been rehired regularly for the past 10 years for various agencies — skirting the intent of temporary employ.
With more baby boomers approaching retirement, government agencies have begun coping to replace them in high-level jobs requiring experience. That has caused questions about apparent cronyism, with retirees engaged in double-dipping by earning their old salaries on top of their pensions. Limits should be imposed to make the rehiring of retirees an exception rather than the rule, and include a finite training period for the retirees’ full-time job replacements.
"This is more about helping and giving," former Honolulu Managing Director Robert Fishman told the Star-Advertiser’s Rob Perez regarding his earnings at $62.31 an hour, 30 hours a week, assisting Mayor Peter Carlisle’s present managing director. "This is not a lot of money for me."
An unending part-time job that can end up at $97,000 a year is a lot of money for taxpayers to shell out for what amounts to a supplemental managing director. For the record, taxpayers are already paying for a managing director in Doug Chin. The fact that Fishman’s hiring and retention occur at such a high level, just under the mayor, sends disturbing signals that such open-ended plum hirings are OK and shouldn’t be challenged. No, and no.
The city now employs 95 retirees on 89-day contracts. Among the highest-paid is Jerry Iwata, a real property acquisition officer for the Honolulu Authority for Rapid Transportation, working 25 hours a week at a rate of $55 an hour, according to Carlisle administration files. Though he retired in December 2001, Iwata started his routinely renewed 89-day contracts the following month, which, based on his hourly rate, would have paid him about $71,500 annually.
Honolulu and Hawaii government retirees can work full- or part-time through these 89-day employment deals, beginning at least six months after retirement, according to a 2010 law change. What appears to be the only other limitation is that the returning retiree must take a break of as little as one workday before starting another 89-day stretch. Such arrangements have no cap so can continue for many years — and they have.
Some states have begun to prevent retirees from returning to previous positions to eventually draw two pensions, or allow their return to work without additional benefits. Some, though, are reaching out to provide opportunities for retirees to return.
Most notably, California launched a "Boomerang" program in 2006 in anticipation of 70,000 employees, or 34 percent on the state payroll, eyeing eligibility to retire in the following five years. Retirees can be hired to work up to 960 hours in a fiscal year, beginning at least 60 days after the employee’s retirement began, and, similar to a Hawaii rule, as long as there was no prior agreement with the employer.
Any system in our city and state governments trying to deal with the baby-boomer retirement period, though, should focus on streamlining the government.
Rather than inviting retired bureaucrats to stay on the public payroll for years on end, the people in charge need to gather the political will to curb the practice. On behalf of taxpayers, they must ensure that the work encompassed by these short-term 89-day contracts is essential, targeted and, indeed, short-term.