Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Labor, to which was referred H.B. No. 325 entitled:

begs leave to report as follows:

The purpose of this measure is to allow the use of sick leave in excess of the statutory minimum amount for temporary disability benefits for family leave purposes and to amend the definition of "sick leave" under the family leave law.

Testimony in support of this measure was submitted by the Hawaii State AFL-CIO, the Hawaii State Teachers Association, and the ILWU Local 142. Testimony in opposition to this measure was submitted by the Society for Human Resource Management and the Hawaii Restaurant Association. Comments on this measure were submitted by the Department of Labor and Industrial Relations (DLIR).

Your Committee finds that in 2003, the Legislature enacted Act 44, Session Laws of Hawaii 2003, which allowed employees with sick leave benefits to utilize up to ten days of accrued and available sick leave for family leave purposes. Subsequent to its enactment, the Legislature further determined that the intent of Act 44 was not being effectuated by DLIR in its enforcement. In response, the Legislature in 2004 adopted House Concurrent Resolution 77, House Draft 2, urging DLIR to enforce the provisions of Act 44, in accordance with the Legislature's intent.

It appears that the denial of the use of sick leave benefits for family leave purposes has been attributed to a loophole in the law, wherein the statutory minimum amount of temporary disability insurance (TDI) benefits required may be less than the minimum amount required under an employer's self-insured plan that is accepted by DLIR. Consequently, once the plan is accepted by DLIR, no sick leave in excess of the minimum amount specified under the plan may be utilized for family leave purposes, although such is in excess of the statutory minimum amount of TDI benefits. Therefore, your Committee believes that amendments to the current law are necessary in order to reflect the true intent of Act 44.

Additionally, your Committee finds that the issue has been raised concerning whether the Employee Retirement Income Security Act (ERISA) precludes legislation extending the application of Act 44 to ERISA benefit plans. DLIR had previously represented that it had or would be seeking an Attorney General's opinion regarding the issue. Your Committee believes that this measure should continue to move forward through the legislative process; however, it also finds that this issue should continue to be monitored to determine whether further amendments to the law are necessary.

Your Committee has amended this measure by:

As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 325, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 325, S.D. 1, and be referred to the Committee on Ways and Means.