Hawaii substitute, part-time teachers lose claim to millions in back pay

The Hawaii Supreme Court on Wednesday ruled in favor of the state in denying millions of dollars in back wages and interest that nearly 30,000 public-school substitute and part-time teachers had argued they were owed.

In a unanimous opinion authored by Chief Justice Mark Recktenwald, the high court reversed two Oahu Circuit Court rulings that had awarded $54 million in back wages and interest stemming from two class-action lawsuits.

At issue were daily wages paid to substitute teachers and hourly wages paid to part-time temporary teachers who worked for the Department of Education between 2000 and 2012, and whether interest was owed on the back pay being sought.

In one case, the lower court had awarded hourly back wages totaling $6.8 million to substitute teachers who had worked part-time for the DOE from November 2000 to June 2012. The 2015 ruling had also awarded interest on back wages totaling $13.5 million for the 8,000 teachers. The state appealed the ruling.

The teachers had accused the DOE of failing to calculate substitute teachers’ daily wages correctly. The original complaint argued the department violated a 1996 law pegging pay for substitutes to rates for Class II teachers — full-time unionized instructors who have a bachelor’s degree but no advanced training. (That law was changed in 2005, allowing the department to establish a compensation schedule for substitutes based on academic qualifications.)

The dispute was partially settled in 2014 when a judge awarded more than $14 million to settle only the daily wage claims for substitutes. The parties had disagreed on whether hourly back wages — for substitutes who weren’t paid per diem wages — and interest on daily and hourly wages were owed.

Wednesday’s Supreme Court ruling says the plaintiffs are neither entitled to hourly back wages nor interest on hourly back pay or the settled daily back wages.

In a second class-action lawsuit, 20,000 part-time temporary teachers who worked for the state from February 2004 to June 2012 claimed they too were underpaid and owed back wages because, they argued, their wages should have been linked to the substitute teacher rates at the time.

A 2015 Circuit Court ruling awarded the plaintiffs more than $24 million in hourly back wages. But the judge determined the part-time teachers were not entitled to an estimated $9.5 million in interest on the back wages.

The Supreme Court reversed the hourly back-pay claims and affirmed the ruling denying interest owed.

A Board of Education policy from 1976 had linked part-time teachers’ hourly pay to the wages for substitute teachers, but that policy was amended in 2005 to pay part-time teachers based on academic qualifications. The state had argued on appeal that it was not liable for any alleged amounts owed after the policy change. The high court agreed that the board policy did not “have the force and effect of law, and that it is merely an internal policy that may be amended at any time.”

Plaintiffs in both class-action suits had argued that interest was owed under a state law that says contractors shall be entitled to interest if they are not paid within 30 days of providing goods or services to a state agency. In denying that argument, the high court said, “The teachers are not selling goods or services, but rather are being compensated as employees in accordance with their contracts with the state.”

The state Attorney General’s office said the decision settles more than a decade of litigation.

“The state and DOE appreciate the part-time teachers’ important contribution to the education of our youth. They can and should be paid for that contribution. But the state also has a duty to all citizens to ensure that part-time teachers are not paid more than they are owed,” Attorney General Doug Chin said in a statement.

Attorneys for the plaintiffs did not immediately respond to a request for comment.