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. 2325 entitled:

begs leave to report as follows:

The purpose of this bill is to require a bidder for construction work to file a sworn statement specifying that construction work performed by a subcontractor, will be performed by employees who are paid the prevailing rate of compensation, including benefits, and working under the same conditions of employment as those employed by the bidder.

Unity House, Inc. testified in support of this measure. The Department of Accounting and General Services and General Contractors Association of Hawaii opposed this measure. The Department of Labor and Industrial Relations commented on this measure expressing a number of concerns.

Your Committee finds that employees of subcontractors may not always enjoy the benefits of union representation and may not be fairly compensated when working on a project. This measure will ensure that these employees of subcontractors will receive wages and benefits equivalent to employees working for the contract bidder under a State contract.

However, uncertainties of the effects this measure will have on the State procurement process and contractors warrant further discussion.

Accordingly, your Committee has amended this measure by:

(1) Changing the effective date to February 31, 3003; and

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. 2325, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2325, H.D. 1, and be referred to the Committee on Finance.