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. 2659 entitled:

begs leave to report as follows:

The purpose of this bill is to appropriate funds for fiscal year 2004-2005 for the purchase and installation of computers and software to process workers' compensation claims in the State of Hawaii.

The Administration has proposed an omnibus bill intended to reform Hawaii's workers' compensation system. That measure, H.B. No. 2486, contains nine separate components pertaining to:

(1) Managed care and limits on palliative care;

To facilitate a thorough review of each of these components, proposed drafts reflecting the deletion of current contents of nine bills and the insertion of new language pertaining to each of the components found in H.B. No. 2486 were heard for purposes of receiving testimony and public comment.

As proposed, the new contents for this bill would prohibit compensation for mental injury or illness proximately caused by personnel actions taken in good faith, including disciplinary action, counseling, work evaluation or criticism, job transfer, layoff, demotion, suspension, termination, retirement, or other good faith actions associated ordinarily with personnel administration.

Supportive testimony was submitted by the Departments of Labor and Industrial Relations (DLIR) and Human Resources Development, The Chamber of Commerce of Hawaii, the National Federation of Independent Business – Hawaii, the Society for Human Resource Management, Altres, HEMIC, and one individual.

Testimony in opposition was received from ILWU Local 142, United Public Workers, the Hawaii Government Employees Association, Hawaii State IBEW, the Hawaii Fire Fighters Association, AFL-CIO, Hawaii Ironworkers, and one individual.

Your Committee notes that during the Regular Session of 2003, this Committee reported out H.B. No. 387, H.D. 1 [Standing Committee Report No. 483, February 14, 2003] to specifically address the Hawaii Supreme Court's ruling in Davenport v. City and County of Honolulu, in which an injury stemming from personnel actions incidental to employment that serves as an important interest to the employer is compensable under the Workers' Compensation Law. This measure carried over to the 2004 Session and is currently before the Committee on Finance. As such, the provisions of this proposed draft is not necessary at this time.

During the discussion on the proposed draft for H.B. No. 1776, a measure pertaining to vocational rehabilitation reform, your Committee learned that as of February 2004, there is only one vocational rehabilitation plan reviewer employed by DLIR to analyze and process the rehabilitation plans submitted by service providers. This delays the worker's entry into the workforce and extends the time that the worker may have to receive workers' compensation benefits.

After careful consideration, your Committee has reconsidered the provisions of the proposed draft, and instead replaced the contents of the original bill with language appropriating a blank sum for the establishment of two new positions within the Disability Compensation Division of DLIR to process vocational rehabilitation plans.

Your Committee urges the Committee on Finance to assess the feasibility of using federal Reed Act funds for unemployment insurance benefits to supplant other federal funds that could then be used to fund this appropriation request.

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. 2659, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2659, H.D. 1, and be referred to the Committee on Finance.