Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Labor and Public Employment, to which was referred H.B. No. 1774 entitled:

begs leave to report as follows:

The purpose of this bill is to encourage eligible claimants of unemployment insurance (UI) to seek gainful employment by permitting claimants to receive their weekly benefit amount without reductions for wages earned by the claimant during that week.

The ILWU, Local 142 supported the intent of this measure. The Department of Labor and Industrial Relations (DLIR) opposed this measure.

Present UI benefits allow an unemployed individual to receive both their weekly benefit amount (WBA) of UI and additional earnings from part time employment. When the total wages earned from employment are less than an individual's WBA, earnings in excess of the first $50 for that week are deducted from the individual's UI benefits on a dollar for dollar basis. Your Committee finds that this serves as a disincentive for individuals to seek permanent, full time employment.

Although concerns were raised by DLIR regarding the financial implications this bill may have on present UI trust fund reserves, your Committee notes that $30,000,000 is available in federal funds under the Reed Act to pay for unemployment benefits and that these moneys should help to mitigate the financial effect that this bill will have on the State's Unemployment Compensation Fund.

Accordingly, your Committee has amended this measure by:

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. 1774, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1774, H.D. 1, and be referred to the Committee on Finance.