The bill proposes temporary salary reductions for state government employees during the 2025-2027 fiscal biennium, specifically from July 1, 2025, through June 30, 2026. It mandates a 4.98 percent reduction in base salaries for employees across the executive, legislative, and judicial branches, with exemptions for certain groups, including employees at state institutions of higher education and elected officials. The legislation also introduces provisions for temporary salary reduction leave and requires the Office of Financial Management to ensure that salary reductions do not fall below minimum wage. Additionally, it amends existing laws regarding sick leave compensation to ensure that the rate for unused sick leave remains unaffected by these temporary reductions.

Furthermore, the bill includes amendments to various retirement systems, ensuring that compensation forgone due to budgetary measures, including those related to the COVID-19 pandemic, is included in retirement calculations. It clarifies definitions and eligibility criteria for retirement benefits, particularly for law enforcement officers, teachers, and public safety employees, while also repealing previous restrictions on salary increases for state employees. The bill aims to provide clearer guidelines for managing employee compensation and protecting retirement benefits during challenging fiscal periods, with an effective date of July 1, 2025, for most provisions.

Statutes affected:
Original Bill: 41.04.820, 43.03.3051, 41.04.340, 43.01.041, 41.06.500, 41.26.162, 41.37.010, 41.40.010, 43.43.120