Requires businesses to offer cafeteria plans to its employees.

A BILL FOR AN ACT

SECTION 1. The Hawaii Revised Statutes is amended by adding a new section to be appropriately designated and to read as follows:

"§ - Cafeteria plans. (a) Each eligible business shall establish a wage and salary reduction benefit program that qualifies as a cafeteria plan within the meaning of section 125 of the Internal Revenue Code of 1986, as amended. The eligible business shall allow its employees to join a cafeteria plan to reduce their pretax compensation in return for payment by the eligible business of the expenses of eligible benefits.

(b) The contributions, interest earned, and forfeited employee balances may be held in trust outside of the eligible business for the benefit of the employees and the plan. The funds in trust shall not be subject to the business' general creditors. Interest earned or forfeited employee balances may be used to defray employee fees and other administrative costs.

(c) For the purposes of this section:

"Eligible business" means any business, whether formed for-profit or not-for-profit, including a sole proprietor, partnership, corporation, limited liability company, limited liability partnership, or any other business entity that is subject to chapter 235 or 237.

"Employee" means any person hired by an eligible business whose compensation is based on the commission of products or services sold."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act shall take effect upon its approval.