Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Labor & Public Employment, to which was referred S.B. No. 1808, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this bill is to protect workers' rights by:

Hawaii State AFL-CIO, ILWU, Local 142, Hawaii Government Employees Association, Hawaii Nurses Association, Hawaii Psychological Association, and numerous concerned individuals testified in support of the bill. The Department of Labor and Industrial (DLIR) Relations, Hawaii Medical Association, Kaiser Permanente, Hawaii Insurers Council, Island Insurance Companies, First Insurance Company of Hawaii, Ltd., Hawaii Employer's Mutual Insurance Company, Inc., National Federation of Independent Business-Hawaii, The Chamber of Commerce of Hawaii, Hawaii Business Roundtable, Retail Merchants of Hawaii, Employers' Chamber of Commerce, Metzler Contracting Company, LLC, ML Pacific, Inc., HSI Mechanical, Inc., CC Engineering and Construction, Inc., Foundations Hawaii, Inc., Atlas Construction Services, Sen Plex Corporation, Oahu Plumbing & Sheet Metal, Ltd., Oahu Air Conditioning Service, Inc., Oahu Restaurant Supply, Inc., Access Lifts of Hawaii, Artisan Paint and Coatings, Homeworks Construction, Inc., Reflections Glass Company, Robert M. Kaya Builders, Inc., Mark Development, Inc., Universal Construction, Inc., Gima Pest Control, Inc., Raynor Pacific Overhead Doors Ltd., Benny's Better Builders, Ltd., Hidano Construction, Inc., David's Custom Roofing & Painting, Inc., Decor Builders, Inc., and Mouse Builders, Inc., opposed this measure. The Department of Commerce and Consumer Affairs, Attorney General, and Hawaii Chapter of the American Physical Therapy Association opposed the bill in part. The Department of Human Resources Development submitted comments and concerns.

This bill takes a two pronged approach to ensure a balanced approach in the workers compensation system. Your Committee finds that this bill is necessary to maintain the underlying premise of the system which is to enable the injured worker, who by giving up the right to sue the employer, will receive timely and effective medical treatments and rehabilitation. First, this bill codifies the existing Sections 12-10-1 et. seq., 12-14-1 et. seq. and 12-15-1 et. seq., Hawaii Administrative Rules into Chapter 386, HRS, pertaining to workers’ compensation. Your Committee finds that codification of these rules are necessary to ensure consistency with the public policy set forth by the Legislature.

Second, this bill reaffirms the constitutional responsibility and powers given to the Legislature to determine public policy through enactment of laws and to the Executive to execute and administer these laws. Your Committee is concerned with recent events by DLIR to propose new rules that in effect circumvent the Legislature's policymaking role. Moreover, your Committee finds it imperative to maintain the integrity of the workers compensation system as envisioned by the Legislature. It is the Legislature who decides what balanced and reasonable changes to make to the current workers' compensation statutes. The Executive should not enact rules that do not comport with the laws enacted by the Legislature. The Legislature has statutorily created a valuable protection to workers and their employers in the event of a workplace-related injury or disease. In chapter 386, Hawaii Revised Statutes, the Legislature has developed a workers' compensation mechanism to allow injured workers to receive payments to cover loss of earning capacity, receive medical treatment, and undergo vocational rehabilitation, where necessary, to assist them to return to work.

However, your Committee understands some of the concerns raised at the public hearing, particularly with regard to the investigation of fraud. After discussing the issue of fraud investigation with the Insurance Commissioner during the public hearing, your Committee finds that another bill dealing with insurance would be better suited to address this issue and will work with the Committee on Finance to address this issue.

Your Committee has amended this measure by:

As affirmed by the record of votes of the members of your Committee on Labor & Public Employment that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1808, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1808, S.D. 1, H.D. 1, and be referred to the Committee on Finance.