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. 294, S.D. 3, entitled:

begs leave to report as follows:

The purpose of this bill is to assist Hawaii's workers while maintaining fairness for Hawaii's employers by:

The Hawaii State AFL-CIO, Hawaii State Teachers Association, ILWU Local 142, and The League of Women Voters of Hawaii testified in support of this bill. The Hawaii Business League, National Federation of Independent Business/Hawaii, The Chamber of Commerce of Hawaii, Retail Merchants of Hawaii, Hawaii Restaurant Association, Tiki's Grill & Bar, LWD, Inc., Gyotaku Japanese Restaurant, United Rim Transport, Inc., Staffing Partners, Aloha Petroleum, Ltd., Hawaii Automobile Dealers Association, Safeguard Services, Inc., and several concerned individuals opposed this measure. The Department of Labor and Industrial Relations submitted comments.

The concept of the minimum wage was established to allow working Americans the benefits of earning decent wages and living comfortable lives. Over the years, however, inflation and increases in the cost of living have outpaced increases in the minimum wage. This has forced many people, especially those living in Hawaii, to work two or more jobs just to make ends meet. This, in turn, has had a detrimental effect on the family unit as more and more parents find it necessary to work, making it more difficult to spend time with their families.

Your Committee understands the concerns raised by the business community regarding the amount of the minimum wage increase proposed in this bill. Your Committee also understands the concerns of the business community regarding the need for assistance with a minimum wage increase and that the lowering of the maximum taxable wage base for contributions to the unemployment insurance fund was an attempt to provide some relief to employers. However, in testimony submitted by the Hawaii Business League, it was noted that, with an increase in the minimum wage, many businesses may be forced to hire part-time workers and that to qualify for the tax savings proposed in this measure, a part-time employee will have to work 1,000 hours per year, which most part-time employees will not work.

After careful consideration, your Committee has amended this bill by deleting its contents and replacing it with the substantive contents of H.B. No. 1134, H.D. 2. As amended, this bill:

Technical, nonsubstantive amendments were also made for clarity, consistency, and style.

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. 294, S.D. 3, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 294, S.D. 3, H.D. 1, and be referred to the Committee on Finance.