Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committees on Public Safety & Military Affairs and Labor & Public Employment, to which was referred H.B. No. 713 entitled:

beg leave to report as follows:

The purpose of this bill is to clarify that participation in work, education, and vocational training programs while incarcerated is excluded from the type of service which is considered employment for the purposes of statutory employee benefits requirements.

Supportive testimony was submitted by the Department of Labor and Industrial Relations. Comments were also received from the Department of Public Safety.

Your Committee finds that any individual who performs services for wages or under contract of hire is considered an employee under chapter 383, Hawaii Revised Statutes, the state unemployment compensation law. The Federal Unemployment Tax Act of 1978 excludes inmates from this definition for purposes of federal law, but Hawaii has yet to adopt a similar exclusion. If inmates are treated as employees under state law, then the cost of unemployment insurance and other statutorily created employee benefits could financially strap the Department of Public Safety and might jeopardize these much-needed rehabilitative programs.

As affirmed by the records of votes of the members of your Committees on Public Safety & Military Affairs and Labor & Public Employment that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 713 and recommend that it pass Second Reading and be referred to the Committee on Finance.