SB292 HD1

SECTION 1. The legislature finds that the Hawaii supreme court's decision in Konno v. County of Hawaii, 85 Haw. 61 (1997), affirmed that civil service jobs cannot be performed by private contractors if the work involved has been customarily and historically provided by civil servants.

The legislature further finds that service employees of contractors under state or county contracts require greater wage protection than is currently afforded. Unlike chapter 104, Hawaii Revised Statutes, which covers public works construction, section 103-55, Hawaii Revised Statutes, does not provide sufficient provisions to ensure compliance.

The purpose of this Act is to ensure that service employees of state or county contractors are paid at wages or salaries that are certified to be accurate and in accordance with applicable labor laws under chapter 104, Hawaii Revised Statutes, so as to be consistent with the Hawaii supreme court's decision in Konno.

SECTION 2. Section 103-55, Hawaii Revised Statutes, is amended to read as follows:

"§103-55 Wages, hours, and working conditions of employees of contractors performing services. (a) Before any offeror enters into a contract to perform services in excess of $25,000 for any governmental agency, the offeror shall certify that the services to be performed will be performed under the following conditions:

Wages. The services to be rendered shall be performed by employees paid at wages or salaries not less than the wages paid to public officers and employees for similar work.

The contractor or the contractor's subcontractor shall pay all mechanics and laborers 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, regardless of any contractual relationship which may be alleged to exist between the contractor or subcontractor and the laborers and mechanics. A copy of the rates of wages shall be given to each laborer and mechanic employed under the contract by the contractor at the time each laborer and mechanic is employed, except that where there is a collective bargaining agreement the contractor does not have to provide the contractor's employees the wage rates schedules.

Compliance with labor laws. All applicable laws of the federal and state governments relating to workers' compensation, unemployment compensation, payment of wages, and safety will be fully complied with.

(b) The government contracting agency may withhold from the contractor so much of the accrued payments as the government contracting agency may consider necessary to pay to the laborers and mechanics employed by the contractor or any subcontractor on the job site the difference between the required wages and the wages received and not refunded by the laborers and mechanics.

(c) Every such contract and the specifications for such contract shall contain a provision that a certified copy of all payrolls shall be submitted weekly to the governmental contracting agency for review. The 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, and that the classifications set forth for each laborer or mechanic conform with the work the laborer or mechanic performed. Any certification discrepancy found by the contracting agency shall be reported to the contractor and the director to effect compliance.

Payroll records for all laborers and mechanics working at the site of the work shall be maintained by the contractor and the 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, daily and weekly number of hours worked, deductions made, and actual wages paid. The contractor shall make payroll records available for examination within ten days from the date of a written request by a governmental contracting agency, director, or any authorized representatives thereof. Any contractor who:

(1) Fails to make payroll records accessible within ten days;

(2) Fails to provide information requested for the proper enforcement of this chapter within ten days; or

(3) Fails to keep or falsifies any record required under this chapter,

shall be assessed a penalty as provided in section 104-22(b).

The administration and enforcement of the requirement for certified payroll records shall be in the same manner as sections 104-4, 104-21 through 104-28, and 104-33 in relation to service contracts.

[~~(b)~~] (d) No contract to perform services for any governmental contracting agency in excess of $25,000 shall be granted unless all the conditions of this section are met. Failure to comply with the conditions of this section during the period of contract to perform services shall result in cancellation of the contract, unless such noncompliance is corrected within a reasonable period as determined by the procurement officer. Final payment of a contract or release of bonds or both shall not be made unless the procurement officer has determined that the noncompliance has been corrected.

It shall be the duty of the governmental contracting agency awarding the contract to perform services in excess of $25,000 to enforce this section.

[~~(c)~~] (e) This section shall apply to all contracts to perform services in excess of $25,000, including contracts to supply ambulance service and janitorial service.

This section shall not apply to:

(1) Managerial, supervisory, or clerical personnel;

(2) Contracts for supplies, materials, or printing;

(3) Contracts for utility services;

(4) Contracts to perform personal services under section 46-33(7), (8), and (9), section 76-16(b)(2), (3), (12), and (15), and section 76-77(7), (8), and (12);

(5) Contracts for professional services;

(6) Contracts to operate refreshment concessions in public parks, or to provide food services to educational institutions;

(7) Contracts to provide transportation services for school children; or

(8) Contracts with nonprofit institutions."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect on January 1, 2051.

THE SENATE	S.B. NO.	292
THIRTIETH LEGISLATURE, 2019		S.D. 1
STATE OF HAWAII		H.D. 1