STAND. COM. REP. 186
Honolulu, Hawaii
, 2003
H.D. 1
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. 1069 entitled:
begs leave to report as follows:
The purpose of this bill is to clarify Hawaii's unemployment insurance law. Specifically, this bill would:
(1) Provide and limit optional exemptions from the unemployment insurance law for business owners holding at least a 50 percent interest in their company; and
(2) Repeal the disqualification for unemployment benefits of an owner-employee of a corporation who voluntarily leaves employment is terminated for any reason.
The Representative of the 19th Representative District and the National Federation of Independent Business testified in support of this measure. The Department of Labor and Industrial Relations (DLIR), ILWU Local 142, and the Hawaii Business League testified in opposition to this measure.
Your Committee received conflicting testimony from the business community on the benefits of this bill. Furthermore, the Director of Labor and Industrial Relations (Director) opposed this measure on grounds that it would
violate federal withdrawal standards, as well as mandatory coverage requirements for government and non-profit entities under Section 3304(a)(6)(A) of the federal Unemployment Tax Act based upon information received on this bill from the U.S. Department of Labor.
However, your Committee also received testimony from the Representative of the 19th Representative District in support of the concept of providing unemployment insurance benefits for owner-employees of a corporation, in which it was suggested that the bill could be amended to remedy the possible conflicts with the federal Unemployment Tax Act.
Accordingly, your Committee has amended the bill by:
(1) Deleting provisions that would have conditionally excluded individuals who hold an ownership interest of 50 percent or more in the employee unit from the definition of "employment" under Hawaii's Unemployment Insurance Law;
(2) Allowing an owner-employee of a corporation or a member of a limited liability company owning a distributed interest of at least 50 percent to collect unemployment benefits in circumstances where "voluntary closure" of a business is necessary;
(3) Requiring the Director to adopt rules with respect to hardship and work availability; and
(4) Making technical, nonsubstantive revisions for purposes of clarity, style, and conformity.
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. 1069, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1069,
H.D. 1, and be referred to the Committee on Consumer Protection and Commerce.
Respectfully submitted on behalf of the members of the Committee on Labor and Public Employment,
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MARCUS R. OSHIRO, Chair |