STAND. COM. REP. NO. 2248

Honolulu, Hawaii

RE:    S.B. No. 2704

       S.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Madam:

     Your Committee on Judiciary and Labor, to which was referred S.B. No. 2704 entitled:

"A BILL FOR AN ACT RELATING TO COMPENSATION,"

begs leave to report as follows:

     The purpose and intent of this measure is to amend the prevailing wage law to allow for payment of overtime compensation on public works contracts to exceed time and a half.

     Your Committee received testimony in support of this measure from the Department of Labor and Industrial Relations, Plumbers and Fitters UA Local Union 675, and Hawaii Operating Engineers Industry Stabilization Fund.

     Your Committee finds that overtime compensation for public works is based on one and one-half times the laborer's or mechanic's basic hourly rate of pay plus the cost to an employer of furnishing a laborer or mechanic with fringe benefits.  This measure provides flexibility to the payment of overtime to allow overtime compensation to exceed time and a half.

     According to the Department of Labor and Industrial Relations, this measure only affects contractors with collective bargaining agreements to pay their employees at more than time and a half for all hours worked over an eight-hour day, weekends, and holidays, if specified in the agreement.  A non-union contractor would be under no obligation to pay more than the time and a half.  In response to the disparity that would be caused by this measure between the rates for union and non-union contractors, the Department proposed amendments to your Committee.

     Your Committee has amended this measure by:

     (1)  Adopting the language suggested by the Department of Labor and Industrial Relations that establishes the rate for overtime compensation as the rate specified in a collective bargaining agreement if the basic hourly rate is based on such agreement, to create parity between a union contractor and non-union contractor; and

     (2)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Judiciary and Labor that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2704, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2704, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Judiciary and Labor,

____________________________

CLAYTON HEE, Chair