STAND. COM. REP. NO. 1040

Honolulu, Hawaii

RE: S.B. No. 1082

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committee on Judiciary, to which was referred S.B. No. 1082, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO WAGES,"

begs leave to report as follows:

The purpose and intent of this measure is to make general contractors entering into or under contracts in Hawaii for work on buildings or structures liable for debt incurred by subcontractors for wages due to claimants for performance of labor in the contract between the general contractor and owner.

Your Committee received testimony in support of this measure from Pacific Resource Partnership, Hawaii Regional Council of Carpenters, and Hawai‘i Construction Alliance. Your Committee received testimony in opposition to this measure from the Subcontractors Association of Hawaii. Your Committee received comments on this measure from the Department of Labor and Industrial Relations.

Your Committee finds that under existing law, general contractors are not held liable for the unfair labor practices of their subcontractors, including the nonpayment of wages. As a result, employees of subcontractors are, in certain instances, not being adequately compensated for work they provide. This measure will allow general contractors to require their subcontractors to furnish payroll records and other relevant documents upon request so that general contractors can ensure that the subcontractors' employees are being properly paid, allow general contractors to withhold any future payments to their subcontractors unless the requested information is provided, and hold general contractors liable if their subcontractors do fail to properly pay their employees. This will ensure that general contractors take precautions in hiring and monitoring their subcontractors if they want to avoid being liable for their subcontractors' debts and will help protect the workers from unfair labor practices.

Your Committee has amended this measure by inserting an effective date of March 15, 2094, to encourage further discussion.

As affirmed by the record of votes of the members of your Committee on Judiciary that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1082, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1082, S.D. 2.

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

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KARL RHOADS, Chair