STAND. COM. REP. NO. 1199

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.R. No. 87
                                        




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Labor and Environment, to which was
referred S.R. No. 87 entitled:

     "SENATE RESOLUTION REQUESTING THE DEPARTMENT OF COMMERCE AND
     CONSUMER AFFAIRS AND THE DEPARTMENT OF LABOR AND INDUSTRIAL
     RELATIONS TO COORDINATE THEIR EFFORTS AND ENFORCE WORKERS'
     COMPENSATION MANDATORY COVERAGE REQUIREMENTS,"

begs leave to report as follows:

     The purpose of this measure is to request that the
Department of Commerce and Consumer Affairs (DCCA) and the
Department of Labor and Industrial Relations (DLIR) coordinate
efforts to enforce workers' compensation coverage requirements.

     The measure also requests the publishing of a list of the
contractors that do not carry workers' compensation insurance and
the cross-checking of this list against unemployment insurance
reports, temporary disability insurance reports, and pre-paid
health care reports.  The departments are also requested to
confer with private industry about the seriousness of the matter
and report to the Legislature on possible enforcement procedures.

     Testimony in support of this measure was received from
Hidano Construction, Inc., and the Subcontractors Association of
Hawaii.  DCCA and DLIR testified that the departments are not
opposed to the measure.

     Your Committee finds that there are contractors who claim to
have no employees in order to avoid the workers' compensation

 
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insurance requirements for licensure.  These contractors will
then hire employees after the license is obtained.  DCCA and DLIR
testified that there is no clear documentation that this abuse is
taking place on a wide scale.

     Your Committee also finds that this practice by some
contractors gives those contractors a bidding advantage over
contractors who pay the workers' compensation insurance premiums
in advance as required by law.

     As affirmed by the record of votes of the members of your
Committee on Labor and Environment that is attached to this
report, your Committee concurs with the intent and purpose of
S.R. No. 87, and recommends that it be referred to the Committee
on Commerce and Consumer Protection.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Labor and
                                   Environment,



                                   ______________________________
                                   BOB NAKATA, Chair

 
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