SB2090

SECTION 1. Section 104-1, Hawaii Revised Statutes, is amended by amending the definitions of "basic hourly rate", "overtime compensation", "public work", and "wages", "rate of wages", "wage rates", "minimum wages", and "prevailing wages" to read as follows:

""Basic hourly rate" means the hourly wage paid to a laborer [or], mechanic, or utility worker for work performed during nonovertime hours, but shall not include the cost to an employer of furnishing fringe benefits, whether paid directly or indirectly to the laborer [or], mechanic, or utility worker as provided in the definition of "wages".

"Overtime compensation" means compensation based on not less than one and one-half times the laborers [or], mechanics, or utility workers basic hourly rate of pay plus the cost to an employer of furnishing a laborer [or], mechanic, or utility worker with fringe benefits as described in the definition of "wages"; provided that if the department determines that a prevailing wage is defined by a collective bargaining agreement, the overtime compensation shall be at the rates set by the applicable collective bargaining agreement.

"Public work" means any project, including development of any housing pursuant to section 46-15 or chapter 201H and development, construction, renovation, and maintenance related to refurbishment of any real or personal property, where the funds or resources required to undertake the project are to any extent derived, either directly or indirectly, from public revenues of the State or any county, or from the sale of securities or bonds whose interest or dividends are exempt from state or federal taxes. "Public work" includes utility projects.

"Wages", "rate of wages", "wage rates", "minimum wages" and "prevailing wages" mean the basic hourly rate and the cost to an employer of furnishing a laborer [or], mechanic, or utility worker with fringe benefits, including but not limited to health and welfare benefits, vacation benefits, and pension benefits, whether paid directly or indirectly to the laborer [or], mechanic, or utility worker."

SECTION 2. Section 104-2, Hawaii Revised Statutes, is amended as follows:

1. By amending subsections (b) through (e) to read:

"(b) Every laborer [~~and~~], mechanic, and utility worker performing work on the job site for the construction of any public work project shall be paid no less than prevailing wages; provided that:

(1) The prevailing wages shall be established by the director as the sum of the basic hourly rate and the cost to an employer of providing a laborer [or], mechanic, or utility worker with fringe benefits. In making prevailing wage determinations, the following shall apply:

(A) The director shall make separate findings of:

(i) The basic hourly rate; and

(ii) The rate of contribution or cost of fringe benefits paid by the employer when the payment of the fringe benefits by the employer constitutes a prevailing practice. The cost of fringe benefits shall be reflected in the wage rate scheduled as an hourly rate; and

(B) The rates of wages which the director shall regard as prevailing in each corresponding classification of laborers [~~and~~], mechanics, and utility workers shall be the rate of wages paid to the greatest number of those employed in the State, the modal rate, in the corresponding classes of laborers [or], mechanics, or utility workers on projects that are similar to the contract work;

(2) Except for the project prevailing wages established by subsections (h) and (i), the prevailing wages shall be not less than the wages payable under federal law to corresponding classes of laborers [~~and~~], mechanics, and utility workers employed on public works projects in the State that are prosecuted under contract or agreement with the government of the United States; and

(3) Notwithstanding the provisions of the original contract, the prevailing wages shall be periodically adjusted during the performance of the contract in an amount equal to the change in the prevailing wage as periodically determined by the director.

(c) No laborer [or], mechanic, or utility worker employed on the job site of any public work of the State or any political subdivision thereof shall be permitted or required to work on Saturday, Sunday, or a legal holiday of the State or in excess of eight hours on any other day unless the laborer [or], mechanic, or utility worker receives overtime compensation for all hours worked on Saturday, Sunday, and a legal holiday of the State or in excess of eight hours on any other day. The rate for overtime compensation and any other premium rates of pay shall be those rates specified in an applicable collective bargaining agreement when the basic hourly rate is established by a collective bargaining agreement.

For purposes of determining overtime compensation under this subsection, the basic hourly rate of any laborer [or], mechanic, or utility worker shall not be less than the basic hourly rate determined by the director to be the prevailing basic hourly rate for corresponding classes of laborers [~~and~~], mechanics, or utility workers on projects of similar character in the State.

(d) The contractor or the contractor's subcontractor shall pay all mechanics [~~and~~], laborers, and utility workers employed on the job site, unconditionally and not less often than once a week, and without deduction or rebate on any account, except as allowed by law, the full amounts of their wages including overtime, accrued to not more than five working days prior to the time of payment, at wage rates not less than those deemed to be prevailing, regardless of any contractual relationship which may be alleged to exist between the contractor or subcontractor and the laborers [~~and~~], mechanics, and utility workers. The rates of wages to be paid shall be posted by the contractor in a prominent and easily accessible place at the job site, and a copy of the rates of wages required to be posted shall be given to each laborer [~~and~~], mechanic, and utility worker employed under the contract by the contractor at the time each laborer [~~and~~], mechanic, and utility worker is employed, except that where there is a collective bargaining agreement the contractor does not have to provide the contractor's employees the wage rate schedules.

(e) The governmental contracting agency may withhold from the contractor so much of the accrued payments as the governmental contracting agency may consider necessary to pay to the laborers [~~and~~], mechanics, and utility workers employed by the contractor or any subcontractor on the job site the difference between the prevailing wages and the wages received and not refunded by the laborers [~~and~~], mechanics, and utility workers."

2. By amending subsection (i) to read:

"(i) The terms of section 201H-36(a)(5) prevailing wages shall be deemed the prevailing wages serving as the basis of compliance with this chapter for work on the project when:

(1) The Hawaii housing finance and development corporation has approved and certified a qualified person or firm involved with a newly constructed, or moderately or substantially rehabilitated project under section 201H-36(a)(5) for exemption from general excise taxes;

(2) The qualified person or firm has entered into a contract with a general contractor or subcontractors whose workforce is subject to either:

(A) A collective bargaining agreement with a bona fide labor union for which a section 201H‑36(a)(5) prevailing wage for the laborers [~~and~~], mechanics, and utility workers employed for the construction project has been approved by the director; or

(B) A project labor agreement with the group whose wages are reflected in the Hawaii prevailing wage schedule for which section 201H-36(a)(5) prevailing wages for the laborers [~~and~~], mechanics, and utility workers employed for the construction project have been approved by the director; and

(3) The qualified person or firm has received no other direct or indirect financing for the construction project from any other governmental contracting agency, including the Hawaii housing finance and development corporation."

SECTION 3. Section 104-3, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

"(a) Every contract subject to this chapter and the specifications for those contracts shall contain a provision that a certified copy of all payrolls and a certified copy of a fringe benefit reporting form supplied by the department or any certified form that contains all of the required fringe benefit information shall be submitted weekly to the governmental contracting agency for review. The fringe benefit reporting form shall itemize the cost of fringe benefits paid by the general contractor or subcontractor for:

(1) Health and welfare benefits;

(2) Pension and annuity benefits;

(3) Vacation benefits;

(4) Continuing education and training benefits; and

(5) Other fringe benefit costs paid by the general contractor or subcontractor.

The general contractor shall be responsible for the submission of certified copies of the payrolls of all subcontractors. The certification shall affirm that the payrolls are correct and complete, that the wage rates contained therein are not less than the applicable rates contained in the wage determination decision of the director of labor and industrial relations attached to the contract, and that the classifications set forth for each laborer [or], mechanic, or utility worker conform with the work the laborer [or], mechanic, or utility worker performed. Any certification discrepancy found by the contracting agency shall be reported to the general contractor and the director to effect compliance.

(b) Payroll records for all laborers [~~and~~], mechanics, and utility workers working at the site of the work shall be maintained by the general contractor and the general contractor's subcontractors, if any, during the course of the work and preserved for a period of three years thereafter. The records shall contain the name of each employee, the employee's correct classification, rate of pay, the itemized fringe benefit reporting form pursuant to subsection (a), daily and weekly number of hours worked, deductions made, and actual wages paid."

SECTION 4. Section 104-4, Hawaii Revised Statutes, is amended to read as follows:

"§104-4 Termination of work on failure to pay agreed wages; completion of work; contract and specifications provision. Every contract and the specifications for such contract shall contain a provision that if the governmental contracting agency finds that any laborer [or], mechanic, or utility worker employed on the job site by the contractor or any subcontractor has been or is being paid wages at a rate less than the required rate by the contract or the specifications, or has not received the laborer's [or], mechanic's, or utility worker's full overtime compensation, the governmental contracting agency may, by written notice to the contractor, terminate the contractor's right, or the right of any subcontractor, to proceed with the work or with the part of the work in which the required wages or overtime compensation have not been paid and may complete such work or part by contract or otherwise, and the contractor and the contractor's sureties shall be liable to the governmental contracting agency for any excess costs occasioned thereby."

SECTION 5. Section 104-21, Hawaii Revised Statutes, is amended to read as follows:

"§104-21 Governmental contracting agency responsibilities. The governmental contracting agency shall:

(1) Pay or cause to be paid, within sixty days of a determination made by the director, directly to laborers [~~and~~], mechanics, or utility workers or to the director, from any accrued payment withheld under the terms of the contract, any wages or overtime compensation found to be due to laborers [or], mechanics, or utility workers under the terms of the contract subject to this chapter, or any penalty assessed;

(2) Order any contractor to pay, within sixty days of a determination made by the director, any wages or overtime compensation which the contractor, or any of the contractor's subcontractors, should have paid to any laborer [or], mechanic, or utility worker under any contract subject to this chapter, or any penalty assessed which the contractor, or any of the contractor's subcontractors, should have paid to the director; and

(3) Report to the director any violation of this chapter, the rules adopted thereunder, or the terms of the contract subject to this chapter."

SECTION 6. Section 104-27, Hawaii Revised Statutes, is amended to read as follows:

"§104-27 Liability. If the accrued payments withheld under the terms of the contract are insufficient to reimburse all the laborers [~~and~~], mechanics, and utility workers for wages or overtime compensation due under this chapter, and the contractor has failed to pay the wages or overtime compensation, the contractor and the contractor's sureties shall be liable to the laborers [~~and~~], mechanics, and utility workers in the amount of the unpaid wages and overtime compensation due, and in an additional equal amount as liquidated damages. However, any claim for liquidated damages, insofar as the surety or sureties are concerned, shall not be paid until the claims of all other creditors have been satisfied."

SECTION 7. Section 104-28, Hawaii Revised Statutes, is amended as follows:

1. By amending subsection (a) to read:

"(a) The following civil actions may be instituted in any court of competent jurisdiction:

(1) An action to recover unpaid wages or overtime compensation may be maintained by any one or more laborers [or], mechanics, or utility workers for and on behalf of oneself or themselves and others similarly situated; and

(2) An action for injunctive and other relief against an employer that fails to pay the prevailing wage to its employees as required by this chapter by a joint labor-management committee established pursuant to section 175a of the federal Labor Management Cooperation Act of 1978 (29 U.S.C. 175a)."

2. By amending subsections (c) and (d) to read:

"(c) It shall be no defense that the laborers [~~and~~], mechanics, and utility workers accepted or agreed to accept less than the required rate of wages or overtime compensation or voluntarily made refunds.

(d) When a written request is filed by any laborer [or], mechanic, or utility worker with the director claiming unpaid wages or overtime compensation under this chapter, the director, after receiving an assignment from the laborer [or], mechanic, or utility worker, may bring an action in any court of competent jurisdiction to recover the amount of the claim. The consent of any laborer [or], mechanic, or utility worker to the bringing of such action by the director, unless the action is dismissed without prejudice on motion of the director, shall constitute a waiver by the laborer [or], mechanic, or utility worker of any right of action the laborer [or], mechanic, or utility worker may have under subsection (a). Any amount recovered by the director before suit and accepted by the laborer [or], mechanic, or utility worker as payment in full shall constitute a waiver of any rights under this chapter."

SECTION 8. Section 104-34, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Parties to a collective bargaining agreement covering classes of laborers [or], mechanics, or utility workers, which are included in the prevailing wage determinations made pursuant to this chapter, shall submit a copy of the agreement to the director within five days after execution of the agreement."

SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 10. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	2090
TWENTY-NINTH LEGISLATURE, 2018
STATE OF HAWAII