Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Labor and Public Employment, to which was referred H.B. No. 389 entitled:

begs leave to report as follows:

The purpose of this bill is to:

The Hawaii State AFL-CIO, ILWU Local 142, and concerned citizens testified in support of this measure. The Department of Labor and Industrial Relations, the Chamber of Commerce of Hawaii, the Hawaii Business League, the Hawaii Bankers Association, the Society of Human Resource Management, and the Retail Merchants of Hawaii testified in opposition to this measure.

Hawaii has long been viewed as a leader in the establishment of progressive social policy in the United States. One such law that has demonstrated Hawaii's leadership is Act 328, Session Laws of Hawaii 1991, the Hawaii Family Leave Act (HFLA), which was later codified as chapter 398, Hawaii Revised Statutes (HRS).

Under this law, employers who employ more than one hundred or more employees for each working day during each of twenty or more calendar weeks in the current or preceding calendar year must provide up to four weeks of family leave during any calendar year upon the birth or adoption of a child, or to care for the employee's reciprocal beneficiary, child, spouse, or parent with a serious health condition.

HFLA served as the model for the federal Family and Medical Leave Act of 1993 (FMLA) -- the first national policy aimed at helping working individuals meet both work and family obligations by balancing the demands of the workplace with the needs of families to promote the stability and economic security of families as well as the national interests in preserving family integrity.

Since the enactment of FMLA ten years ago, the complexity of family obligations for working families has grown considerably in terms of intricacy, intensity, and scope. For example, Hawaii's population is growing older, necessitating greater demands for long-term care and health insurance. The larger segment of Hawaii's workforce is female, the member of the family unit primarily responsible for child care and other everyday tasks for many of Hawaii's families. These trends have been found in most every state throughout our nation.

Subsequently, lawmakers across the United States have looked toward the enactment of state family leave laws to further ensure that the needs of the workplace and those of families are balanced. Over the past two years, 22 states have introduced legislation to either establish state family leave laws, or to amend these laws.

On January 28, 2003, your Committee heard seven bills proposing amendments to the manner in which benefits are provided under HFLA and other mandated programs. Each bill proposed a novel approach to finding the "balance" that is needed in the law, and your Committee acknowledges the fine efforts of the introducers in developing the concepts behind each measure.

However, given the enormous impact any change to HFLA might potentially have on the costs borne by employers, your Committee is hesitant to recommend fundamental systemic changes to the existing system at this time.

During the review of this issue, it was discovered that requiring self-insured employers to allow employees to use sick leave for purposes other than for their own illness or injury would result in those employers having to increase the amount of sick leave available for the employee to ensure continued compliance with the Temporary Disability Insurance (TDI) Law. In essence, this situation could potentially require the employer to provide paid leave for the employee, in addition to the amount of sick leave that is required under the TDI Law.

Furthermore, while the State and counties are exempted from HFLA, most if not all public sector employee contracts contain provisions that allow the use of accrued sick leave for purposes other than an employee's own illness or injury. As such, the public sector employer may already be required to provide paid leave above and beyond the accrued and available amount of sick leave authorized under HFLA.

Your Committee asserts that it was never the Legislature's intention to require an employer to provide paid leave above and beyond what an employee had accrued and had available and the amount of leave an employee is entitled to under the TDI Law.

In light of this, your Committee has amended this bill as follows:

Your Committee believes this bill will ultimately reduce the fiscal liability of employers, especially the State and counties, in providing benefits to workers by closing an existing loophole in HFLA and urges the Committee on Finance to further investigate the existing conflicts between HFLA and the TDI Law.

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. 389, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 389, H.D. 1, and be referred to the Committee on Finance.