STAND. COM. REP. NO. 3359

Honolulu, Hawaii

RE:    H.B. No. 1958

       H.D. 2

       S.D. 2

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred H.B. No. 1958, H.D. 2, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO COMPENSATION,"

begs leave to report as follows:

     The purpose and intent of this measure is to provide flexibility in the calculation of overtime compensation for government public work construction contracts greater than $2,000.

Specifically, the measure provides that overtime compensation for laborers and mechanics:

     (1)  May exceed the current rate of one and one-half times the prevailing basic hourly rate of pay plus fringe benefits; and

     (2)  Shall be at the rates specified in a collective bargaining agreement if the prevailing basic hourly rate is based on a rate set by the agreement.

     Your Committee received written comments in support of this measure from the Department of Labor and Industrial Relations, United Public Workers, Hawaii Operating Engineers Industry Stabilization Fund, and Hawaii Construction Alliance.  The General Contractors Association of Hawaii submitted written comments.

     Your Committee finds that overtime compensation for public works is currently based on one and one-half times the laborer's or mechanic's prevailing basic hourly rate of pay plus the employer's cost of furnishing fringe benefits.  This measure provides flexibility in the payment of overtime by establishing time and a half as a floor rather than a set rate.  In addition, this measure promotes parity between union contractors and non-union contractors by setting overtime compensation at the rate specified in a collective bargaining agreement if the prevailing basic hourly rate used to determine overtime compensation is based on a rate in the agreement.

     Your Committee has amended this measure by making technical nonsubstantive amendments to conform a statutory cross-reference in section 444-16.5, Hawaii Revised Statutes, to a provision amended by this measure.

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1958, H.D. 2, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 1958, H.D. 2, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

DAVID Y. IGE, Chair