Mandates a basic hourly wage rate for workers of employers who hold contracts of any amount to perform services for a governmental contracting agency.

A BILL FOR AN ACT

SECTION 1. The legislature finds that in 1999, nearly twenty-five per cent of jobs in Hawaii paid below poverty wages. State and federal minimum wage protections do not provide enough compensation for a worker supporting a family to live above the poverty level. Public funds should not be used to create jobs that leave workers and their families in poverty.

Over fifty living wage ordinances have been passed in the United States since 1991, improving living standards for low-wage workers without overburdening public budgets or harming local economies. When low-wage workers receive a boost in income, the money circulates back into the local economy and the need for public assistance and services is lessened. As state and county governments in Hawaii seek to privatize more functions, a living wage law is both a mirror and a measure of Hawaii's commitment to economic justice and respect for the dignity of work and sets the standard for economic development.

As a matter of public policy, Hawaii must assure that no one working full-time should live in poverty.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

§   -1 Definitions. As used in this chapter, unless the context clearly requires otherwise:

"Basic hourly rate" means the hourly wage paid to a private sector employee for work performed during non-overtime hours, but shall not include the cost to a private sector employer of furnishing fringe benefits.

"Department" means the department of labor and industrial relations.

"Director" means the director of labor and industrial relations.

"Governmental contracting agency" means the State, any county, and any department, agency, board, or commission, or its authorized officers.

§   -2 Applicability. This chapter shall apply to any private sector employer who contracts with a governmental contracting agency under a contract of any amount to provide services or labor to or on behalf of a governmental contracting agency.

(b) This chapter shall not apply to contracts that merely provide for the purchase of goods or other property, or the leasing of property, or to the wages of laborers and mechanics already protected by chapter 104.

§   -3 Payment of minimum compensation. (a) All employers subject to this chapter shall pay their employees who are actually engaged in the performance of contracted work for a governmental contracting agency a basic hourly rate of not less than $7.25 per hour in addition to health benefits, as described in subsection (b). If no health benefits are provided, the basic hourly rate shall be $8.50.

(b) Health insurance benefits shall consist of the payment of not less than $1.25 per hour towards family medical insurance for employees actually engaged in the performance of contracted work for a governmental contracting agency. An employer shall be required to submit proof of health insurance benefits to the department within ten days after execution of the contract to be qualified to pay the $7.25 basic hourly rate.

§   -4 Supersession by collective bargaining agreement. If an employer subject to this chapter provides greater compensation to its employees through a collective bargaining agreement than that provided by this chapter, the agreement shall supersede the requirements of this chapter.

§   -5 Enforcement. (a) All service or labor contracts with a governmental contracting agency that are subject to this chapter shall include a provision that requires the governmental contracting agency to report to the department any violation of this chapter that is not corrected within          days after written notice.

(b) The department, upon determination that an employer has committed a first violation, shall:

(c) Upon determination that a second violation has been committed, whether pertaining to the same contract as the first violation or not, and within two years of the notification of the first violation, the department, after proper notice and opportunity for hearing, shall:

(d) Upon determination that a third violation has been committed, whether pertaining to the same contract as the first or second violation or not, and within two years of the notification of the second violation, the department, after proper notice and opportunity for hearing, shall:

§   -6 Investigation. The department may conduct investigations to determine compliance with this chapter. The department may enter the job site, examine or subpoena the records of any employer subject to this chapter, either during or after the performance of any contract subject to this chapter. The department may also conduct interviews with employees of the employer on the job during working hours."

SECTION 3. Section 103-55, Hawaii Revised Statutes, is amended to read as follows:

"§103-55 Wages, hours, and working conditions of employees of contractors performing services. (a) Before any offeror enters into a contract to perform services in excess of $25,000 for any governmental agency, the offeror shall certify that the services to be performed will [be performed under the following conditions:

Wages. The services to be rendered shall be performed by employees paid at wages or salaries not less than the wages paid to public officers and employees for similar work.

Compliance] comply with labor laws[. All] and all applicable laws of the federal and state governments relating to workers' compensation, safety, unemployment compensation, and payment of wages[, and safety will be fully complied with.], including payment of a basic hourly rate under chapter      ; provided that payment of a basic hourly rate shall apply to all contracts to perform services regardless of the amount of the contract.

(b) No contract to perform services for any governmental contracting agency in excess of $25,000 shall be granted unless all the conditions of this section are met. Failure to comply with the conditions of this section during the period of contract to perform services shall result in cancellation of the contract, unless [such] the noncompliance is corrected within a reasonable period as determined by the procurement officer. Final payment of a contract or release of bonds, or both, shall not be made unless the procurement officer has determined that the noncompliance has been corrected.

It shall be the duty of the governmental contracting agency awarding the contract to perform services in excess of $25,000 to enforce this section[.]; provided that the governmental contracting agency shall also enforce this section in connection with service contracts of any amount that require the payment of a basic hourly rate pursuant to chapter      .

(c) This section shall apply to all contracts to perform services in excess of $25,000, including contracts to supply ambulance service and janitorial service.

(7) Contracts with nonprofit institutions."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2001.