STAND. COM. REP. NO. 358

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 471
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Labor and Public Employment, to which was
referred H.B. No. 471 entitled: 

     "A BILL FOR AN ACT RELATING TO EMPLOYMENT SECURITY,"

begs leave to report as follows:

     The purpose of this bill is to:

     (1)  Establish a safe harbor declaration for individuals and
          business entities with no employees so they will not be
          subject to payroll unemployment insurance (UI)
          contributions required by chapter 383, Hawaii Revised
          Statutes;

     (2)  Allow employers to appeal UI grievances without a
          deposit of disputed amounts; and

     (3)  Require the Department of Labor and Industrial
          Relations (DLIR) to pay interest and other costs upon
          appeal of a UI grievance if the final judgment favors
          the individual or business entity.

     Testimony in support of the bill was received from the
Hawaii Chapter of the American Massage Therapy Association and
several individuals.  Testimony in opposition to the bill was
received from DLIR.  


 
 
 
 
                                 STAND. COM. REP. NO. 358
                                 Page 2

 
     Your Committee finds that a balance needs to be struck
between DLIR's ability to enforce the law and a business
enterprise's ability to operate as it sees fit.

     Your Committee has amended this bill by:

     (1)  Deleting the ability of individuals and business
          entities to recover interest and additional costs or
          charges from DLIR upon a final judgment in their favor
          in a UI grievance; and 

     (2)  Making technical, nonsubstantive changes for purposes
          of style and clarity.

     As affirmed by the record of votes of the members of your
Committee on Labor and Public Employment that is attached to this
report, your Committee is in accord with the intent and purpose
of H.B. No. 471, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as H.B. No. 471, H.D.
1, and be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Labor and Public
                                   Employment,



                                   ______________________________
                                   TERRY NUI YOSHINAGA, Chair