STAND. COM. REP. NO.  110

 

Honolulu, Hawaii

                , 2009

 

RE:   H.B. No. 1427

      H.D. 1

 

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

 

Sir:

 

     Your Committee on Economic Revitalization, Business, & Military Affairs, to which was referred H.B. No. 1427 entitled:

 

"A BILL FOR AN ACT RELATING TO PROFESSIONAL EMPLOYER ORGANIZATIONS,"

 

begs leave to report as follows:

 

     The purpose of this bill is to protect employers who use professional employer organization (PEO) services and the employees of those employers, by establishing a new chapter regulating PEOs by among other things:

 

(1)  Requiring PEOs to register with the Department of Commerce and Consumer Affairs (DCCA);

 

     (2)  Requiring PEOs to make annual financial disclosures;

 

(3)  Defining the responsibilities of both the PEO and client; and

 

     (4)  Providing tools for enforcement of the law.

 

     The National Association of Professional employer Organizations, and ALTRES, Inc., testified in support of this measure.  The DCCA Professional and Vocational Licensing Division commented on this bill.

 

     PEOs are businesses that enable their clients to outsource the management of human resources, employee benefits, payroll, and workers' compensation.  Currently, there is no comprehensive regulatory scheme applicable to PEOs under Hawaii law.  Thus, this bill may trigger the requirement under section 26H-6, Hawaii Revised Statutes, that the Auditor conduct a sunrise review.

 

     Your Committee respectfully requests the Committee on Consumer Protection and Commerce to which this bill is next referred, to examine the sunrise review issue, as well as whether this bill would include certified public accountants.  To encourage further discussion of these and other issues, the bill's  effective date has been changed to July 1, 2112.  Technical, nonsubstantive amendments were also made for clarity, consistency, and style.

 

     As affirmed by the record of votes of the members of your Committee on Economic Revitalization, Business, & Military Affairs that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1427, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1427, H.D. 1, and be referred to the Committees on Consumer Protection & Commerce and Judiciary.

 

Respectfully submitted on behalf of the members of the Committee on Economic Revitalization, Business, & Military Affairs,

 

 

 

 

____________________________

ANGUS L.K. MCKELVEY, Chair