STAND. COM. REP. NO. 431

Honolulu, Hawaii

RE:    S.B. No. 854

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Sir:

     Your Committee on Judiciary and Labor, to which was referred S.B. No. 854 entitled:

"A BILL FOR AN ACT RELATING TO LABOR,"

begs leave to report as follows:

     The purpose and intent of this measure is to authorize the Director of Labor and Industrial Relations or the Director's designee to issue a stop-work order to an employer, until the employer complies with chapter 388, Hawaii Revised Statutes, relating to the payment of wages and other compensation.

     Your Committee received testimony in support of this measure from BKA Builders Inc., Allied Builders System, Hawai‘i Construction Alliance, Alan Shintani Inc., and Pacific Resource Partnership.  Your Committee received testimony in opposition to this measure from the Subcontractors Association of Hawaii; Ocean Tourism Coalition; Sea Paradise Scuba, Inc.; and Maui Dive Shop.  Your Committee received comments on this measure from the Department of Labor and Industrial Relations, Chamber of Commerce Hawaii, and General Contractors Association of Hawaii.

     Your Committee finds that when an employer fails to pay wages in accordance with chapter 388, Hawaii Revised Statutes, without justification, the employer is liable for monetary penalties; however, these penalties are not always effective deterrents, and in some cases, employers continue to operate illegally.

     Your Committee appreciates the seriousness of the issues that have given rise to the necessity of this measure; however, your Committee shares the concerns stated in the testimony of the Department of Labor and Industrial Relations (DLIR) that this measure, as introduced, may be problematic in achieving its intended purpose and may abrogate due process required prior to the imposition of penalties.

     To address these concerns, your Committee has amended this measure by:

     (1)  Deleting its contents and replacing it with language that is substantially similar to proposed language in the testimony of the DLIR, which allows the DLIR to issue notifications of stop-work orders to employers in violation of Chapter 388, Hawaii Revised Statutes, relating to the payment of wages and other compensation;

     (2)  Inserting an effective date of January 7, 2059, to encourage further discussion; and

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

     Your Committee notes that in this measure, as amended by your Committee, the number of days within which an appeal must be heard and within which a decision for that appeal will be rendered by a hearings officer have been left blank.  As the measure moves forward, your Committee encourages the DLIR to discuss with stakeholders how the process proposed by this measure might be further refined.

     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. 854, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 854, S.D. 1, and be referred to your Committee on Ways and Means.

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

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GILBERT S.C. KEITH-AGARAN, Chair