SB1814

SECTION 1. The legislature finds that the current balance in the unemployment compensation fund allows for adjustments to contributions and benefits. The current balance was created over the past few years by an upswing in the economy, the contributions paid by employers, and the limited changes to statutory language for benefits paid to the unemployed.

The legislature further finds that since both employees and employers have contributed to the present balance of the fund, adjustments that will benefit both the employer and the employee are appropriate and equitable.

The purpose of this Act is:

(1) To provide an adjustment in 2008 and 2009 to the calculation of contributions paid for by employers. The adjustment should provide some relief to employers without unnecessarily depleting the fund; and

(2) To adjust certain areas of benefits paid to the unemployed who have gone without substantial changes to the statutory language on benefits for many years.

This Act also clarifies that the ineligibility for benefits arises from wilful or wanton misconduct of an employee.

SECTION 2. Section 383-22, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) In the case of an individual whose benefit year begins prior to January 5, 1992, the individual's weekly benefit amount shall be, except as otherwise provided in this section, an amount equal to one twenty-fifth of the individual's total wages for insured work paid during the calendar quarter of the individual's base period in which such total wages were highest. In the case of an individual whose benefit year begins after January 4, 1992, the individual's weekly benefit amount shall be, except as otherwise provided in this section, an amount equal to one twenty-first of the individual's total wages for insured work paid during the calendar quarter of the individual's base period in which such total wages were highest. The weekly benefit amount, if not a multiple of $1, shall be computed to the next higher multiple of $1. If an individual's weekly benefit amount is less than $5, it shall be $5. The maximum weekly benefit amount shall be determined annually as follows: On or before November 30 of each year the total remuneration paid by employers, as reported on contribution reports submitted on or before such date, with respect to all employment during the four consecutive calendar quarters ending on June 30 of the year shall be divided by the average monthly number of individuals performing services in the employment during the same four calendar quarters as reported on the contribution reports. The amount thus obtained shall be divided by fifty-two and the average weekly wage (rounded to the nearest cent) thus determined. For benefit years beginning prior to January 1, 1992, two-thirds of the average weekly wage shall constitute the maximum weekly benefit amount and shall apply to all claims for benefits filed by an individual qualifying for payment at the maximum weekly benefit amount in the benefit year commencing on or after the first day of the calendar year immediately following the determination of the maximum weekly benefit amount. For benefit years beginning January 1, 1992, and thereafter, seventy per cent of the average weekly wage shall constitute the maximum weekly benefit amount and shall apply to all claims for benefits filed by an individual qualifying for payment at the maximum weekly benefit amount in the benefit year commencing on or after the first day of the calendar year immediately following the determination of the maximum weekly benefit amount. For benefit years beginning January 1, 2008, and thereafter, eighty per cent of the average weekly wage shall constitute the maximum weekly benefit amount and shall apply to all claims for benefits filed by an individual qualifying for payment at the maximum weekly benefit amount in the benefit year commencing on or after the first day of the calendar year immediately following the determination of the maximum weekly benefit amount. The maximum weekly benefit amount, if not a multiple of $1, shall be computed to the next higher multiple of $1.

(Column A) (Column B) (Column C) (Column D)

High Basic Minimum Maximum

Quarter Weekly Qualifying Total Benefits

Wages Benefit Wages in Benefit Year

$ 37.50 - 125.00 $ 5.00 $ 150.00 $ 130.00

125.01 - 150.00 6.00 180.00 156.00

150.01 - 175.00 7.00 210.00 182.00

175.01 - 200.00 8.00 240.00 208.00

200.01 - 225.00 9.00 270.00 234.00

225.01 - 250.00 10.00 300.00 260.00

250.01 - 275.00 11.00 330.00 286.00

275.01 - 300.00 12.00 360.00 312.00

300.01 - 325.00 13.00 390.00 338.00

325.01 - 350.00 14.00 420.00 364.00

350.01 - 375.00 15.00 450.00 390.00

375.01 - 400.00 16.00 480.00 416.00

400.01 - 425.00 17.00 510.00 442.00

425.01 - 450.00 18.00 540.00 468.00

450.01 - 475.00 19.00 570.00 494.00

475.01 - 500.00 20.00 600.00 520.00

500.01 - 525.00 21.00 630.00 546.00

525.01 - 550.00 22.00 660.00 572.00

550.01 - 575.00 23.00 690.00 598.00

575.01 - 600.00 24.00 720.00 624.00

600.01 - 625.00 25.00 750.00 650.00

625.01 - 650.00 26.00 780.00 676.00

650.01 - 675.00 27.00 810.00 702.00

675.01 - 700.00 28.00 840.00 728.00

700.01 - 725.00 29.00 870.00 754.00

725.01 - 750.00 30.00 900.00 780.00

750.01 - 775.00 31.00 930.00 806.00

775.01 - 800.00 32.00 960.00 832.00

800.01 - 825.00 33.00 990.00 858.00

825.01 - 850.00 34.00 1020.00 884.00

850.01 - 875.00 35.00 1050.00 910.00

875.01 - 900.00 36.00 1080.00 936.00

900.01 - 925.00 37.00 1110.00 962.00

925.01 - 950.00 38.00 1140.00 988.00

950.01 - 975.00 39.00 1170.00 1014.00

975.01 -1000.00 40.00 1200.00 1040.00

1000.01 -1025.00 41.00 1230.00 1066.00

1025.01 -1050.00 42.00 1260.00 1092.00

1050.01 -1075.00 43.00 1290.00 1118.00

1075.01 -1100.00 44.00 1320.00 1144.00

1100.01 -1125.00 45.00 1350.00 1170.00

1125.01 -1150.00 46.00 1380.00 1196.00

1150.01 -1175.00 47.00 1410.00 1222.00

1175.01 -1200.00 48.00 1440.00 1248.00

1200.01 -1225.00 49.00 1470.00 1274.00

1225.01 -1250.00 50.00 1500.00 1300.00

1250.01 -1275.00 51.00 1530.00 1326.00

1275.01 -1300.00 52.00 1560.00 1352.00

1300.01 -1325.00 53.00 1590.00 1378.00

1325.01 -1350.00 54.00 1620.00 1404.00

1350.01 and over 55.00 1650.00 1430.00"

SECTION 3. Section 383-23, Hawaii Revised Statutes, is amended to read as follows:

"§383-23 Weekly benefit for unemployment. For weeks beginning prior to January 5, 1992, each eligible individual who is unemployed, as defined in section 383-1, in any week shall be paid with respect to that week a benefit in an amount equal to the individual's weekly benefit amount less that part of the wages (if any) payable to the individual with respect to that week which is in excess of $2. Effective for weeks beginning January 5, 1992, and thereafter, each eligible individual who is unemployed, as defined in section 383-1, in any week shall be paid with respect to that week a benefit in an amount equal to the individual's weekly benefit amount less that part of the wages (if any) payable to the individual with respect to that week which is in excess of $50. Effective for weeks beginning July 2, 2007, and thereafter, each eligible individual who is unemployed, as defined in section 383-1, in any week shall be paid with respect to that week a benefit in an amount equal to the individual's weekly benefit amount less that part of the wages, if any, payable to the individual with respect to that week which is in excess of $150. The benefit, if not a multiple of $1, shall be computed to the next higher multiple of $1."

SECTION 4. Section 383-24, Hawaii Revised Statutes, is amended to read as follows:

"§383-24 Maximum potential benefits. The maximum potential benefits of an eligible individual in a benefit year shall be twenty-six times the eligible individual's weekly benefit amount. For claims filed on or after January 1, 2008, and thereafter, the maximum potential benefits of an eligible individual's weekly benefit amount shall be thirty times the eligible individual's weekly benefit amount."

SECTION 5. Section 383-30, Hawaii Revised Statutes, is amended to read as follows:

"§383-30 Disqualification for benefits. An individual shall be disqualified for benefits:

(1) Voluntary separation. For any week prior to October 1, 1989, in which the individual has left work voluntarily without good cause, and continuing until the individual has, subsequent to the week in which the voluntary separation occurred, been employed for at least five consecutive weeks of employment. For the purposes of this paragraph, "weeks of employment" means all those weeks within each of which the individual has performed services in employment for not less than two days or four hours per week, for one or more employers, whether or not such employers are subject to this chapter. For any week beginning on and after October 1, 1989, in which the individual has left the individual's work voluntarily without good cause, and continuing until the individual has, subsequent to the week in which the voluntary separation occurred, been paid wages in covered employment equal to not less than five times the individual's weekly benefit amount as determined under section 383-22(b).

An owner-employee of a corporation who brings about the owner-employee's unemployment by divesting ownership, leasing the business interest, terminating the business, or by other similar actions where the owner-employee is the party initiating termination of the employment relationship, has voluntarily left employment.

(2) Discharge or suspension for misconduct. For any week prior to October 1, 1989, in which the individual has been discharged for wilful or wanton misconduct connected with work, and continuing until the individual has, subsequent to the week in which the discharge occurred, been employed for at least five consecutive weeks of employment. For the week in which the individual has been suspended for wilful or wanton misconduct connected with work and for not less than one or more than four consecutive weeks of unemployment which immediately follow such week, as determined in each case in accordance with [~~the seriousness of~~] the wilful or wanton misconduct. For the purposes of this paragraph, "weeks of employment" means all those weeks within each of which the individual has performed services in employment for not less than two days or four hours per week, for one or more employers, whether or not such employers are subject to this chapter. For any week beginning on and after October 1, 1989, in which the individual has been discharged for wilful or wanton misconduct connected with work, and until the individual has, subsequent to the week in which the discharge occurred, been paid wages in covered employment equal to not less than five times the individual's weekly benefit amount as determined under section 383-22(b). Wilful or wanton misconduct consists of actions that show a wilful or wanton disregard of the employer's interest. It includes deliberate or intentional violations or deliberate disregard for established standards of behavior that indicate a wrongful intent or evil design. Mere inefficiency, unsatisfactory conduct, poor performance, isolated instances, or good faith errors in judgment or discretion shall not constitute wilful or wanton misconduct.

(3) Failure to apply for work, etc. For any week prior to October 1, 1989, in which the individual failed, without good cause, either to apply for available, suitable work when so directed by the employment office or any duly authorized representative of the department of labor and industrial relations, or to accept suitable work when offered and continuing until the individual has, subsequent to the week in which the failure occurred, been employed for at least five consecutive weeks of employment. For the purposes of this paragraph, "weeks of employment" means all those weeks within each of which the individual has performed services in employment for not less than two days or four hours per week, for one or more employers, whether or not such employers are subject to this chapter. For any week beginning on and after October 1, 1989, in which the individual failed, without good cause, either to apply for available, suitable work when so directed by the employment office or any duly authorized representative of the department of labor and industrial relations, or to accept suitable work when offered until the individual has, subsequent to the week in which the failure occurred, been paid wages in covered employment equal to not less than five times the individual's weekly benefit amount as determined under section 383-22(b).

(A) In determining whether or not any work is suitable for an individual there shall be considered among other factors and in addition to those enumerated in paragraph (3)(B), the degree of risk involved to the individual's health, safety, and morals, the individual's physical fitness and prior training, the individual's experience and prior earnings, the length of unemployment, the individual's prospects for obtaining work in the individual's customary occupation, the distance of available work from the individual's residence, and prospects for obtaining local work. The same factors so far as applicable shall be considered in determining the existence of good cause for an individual's voluntarily leaving work under paragraph (1).

(B) Notwithstanding any other provisions of this chapter, no work shall be deemed suitable and benefits shall not be denied under this chapter to any otherwise eligible individual for refusing to accept new work under any of the following conditions:

(i) If the position offered is vacant due directly to a strike, lockout, or other labor dispute;

(ii) If the wages, hours, or other conditions of the work offered are substantially less favorable to the individual than those prevailing for similar work in the locality; and

(iii) If as a condition of being employed the individual would be required to join a company union or to resign from or refrain from joining any bona fide labor organization.

(4) Labor dispute. For any week with respect to which it is found that unemployment is due to a stoppage of work which exists because of a labor dispute at the factory, establishment, or other premises at which the individual is or was last employed; provided that this paragraph shall not apply if it is shown that:

(A) The individual is not participating in or directly interested in the labor dispute which caused the stoppage of work; and

(B) The individual does not belong to a grade or class of workers of which, immediately before the commencement of the stoppage, there were members employed at the premises at which the stoppage occurs, any of whom are participating in or directly interested in the dispute; provided that if in any case separate branches of work, which are commonly conducted as separate businesses in separate premises, are conducted in separate departments of the same premises, each such department shall, for the purpose of this paragraph, be deemed to be a separate factory, establishment, or other premises.

(5) If the department finds that the individual has within the twenty-four calendar months immediately preceding any week of unemployment made a false statement or representation of a material fact knowing it to be false or knowingly failed to disclose a material fact to obtain any benefits not due under this chapter, the individual shall be disqualified for benefits beginning with the week in which the department makes the determination and for each consecutive week during the current and subsequent twenty-four calendar months immediately following such determination, and such individual shall not be entitled to any benefit under this chapter for the duration of such period; provided that no disqualification shall be imposed if proceedings have been undertaken against the individual under section 383-141.

(6) Other unemployment benefits. For any week or part of a week with respect to which the individual has received or is seeking unemployment benefits under any other employment security law, but this paragraph shall not apply (A) if the appropriate agency finally determines that the individual is not entitled to benefits under such other law, or (B) if benefits are payable to the individual under an act of Congress which has as its purpose the supplementation of unemployment benefits under a state law."

SECTION 6. Section 383-61, Hawaii Revised Statutes, is amended to read as follows:

"§383-61 Payment of contributions; wages not included. (a) Contributions with respect to wages for employment shall accrue and become payable by each employer for each calendar year in which the employer is subject to this chapter. The contributions shall become due and be paid by each employer to the director [~~of labor and industrial relations~~] for the fund in accordance with such rules as the department [~~of labor and industrial relations~~] may prescribe, and shall not be deducted, in whole or in part, from the wages of individuals in the employer's employ.

(b) Except as provided in subsections (c) and (d), the term "wages" does not include remuneration paid with respect to employment to an individual by an employer during any calendar year which exceeds the average annual wage, rounded to the nearest hundred dollars, for the four calendar quarter period ending on June 30 of the preceding year.

The average annual wage shall be computed as follows: on or before November 30 of each year the total remuneration paid by employers, as reported on contribution reports on or before such date, with respect to all employment during the four consecutive calendar quarters ending on June 30 of such year shall be divided by the average monthly number of individuals performing services in such employment during the same four calendar quarters as reported on such contribution reports and rounded to the nearest hundred dollars.

[~~(c) For the calendar year 1991 only, the term "wages" does not include remuneration in excess of $7,000 paid with respect to employment to an individual by an employer.~~

(d) For calendar year 1988 only, the term "wages" as used in this part does not include remuneration paid with respect to employment to an individual by an employer during the calendar year which exceeds:

(1) One hundred per cent of the average annual wage if the most recently computed ratio of the current reserve fund to the adequate reserve fund prior to that calendar year is equal to or less than .80; or

(2) Seventy-five per cent of the average annual wage if the most recently computed ratio of the current reserve fund to the adequate reserve fund prior to that calendar year is greater than .80 but less than 1.2; or

~~(3) Fifty per cent of the average annual wage if the most recently computed ratio of the current reserve fund to the adequate reserve fund prior to that calendar year is equal to or more than 1.2;~~

provided that "wages" with respect to which contributions are paid are not less than that part of remuneration which is subject to tax in accordance with section 3306(b) of the Internal Revenue Code of 1986, as amended.]

(c) For calendar years 2008 and 2009 only, the term "wages" as used in this part does not include remuneration in excess of $7,000 paid with respect to employment to an individual by an employer; provided that this subsection shall apply only to the contribution rate paid into the unemployment insurance trust fund.

[~~(e)~~] (d) If an employer during any calendar year acquires substantially all the property used in a trade or business, or in a separate unit of a trade or business, of another employer, and after the acquisition employs an individual who prior to the acquisition was employed by the predecessor, then for the purpose of determining whether remuneration in excess of the average annual wages has been paid to the individual for employment, remuneration paid to the individual by the predecessor during the calendar year shall be considered as having been paid by the successor employer. For the purposes of this subsection, the term "employment" includes services constituting employment under any employment security law of another state or of the federal government.

[~~(f)~~] (e) Subsections (b) through [~~(e)~~] (d) notwithstanding, for the purposes of this part the term "wages" shall include at least that amount of remuneration paid in a calendar year to an individual by an employer or the employer's predecessor with respect to employment during any calendar year which is subject to a tax under a federal law imposing a tax against which credit may be taken for contributions required to be paid into a state unemployment fund.

[~~(g)~~] (f) In accordance with section 303(a)(5) of the Social Security Act, as amended, and section 3304(a)(4) of the Internal Revenue Code of 1986, as amended, any contributions overpaid due to a retroactive reduction in the taxable wage base may be credited against the employer's future contributions upon request by the employer; provided that no employer shall be given a cash refund."

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	1814
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII