STAND. COM. REP. NO. 198

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 1181

       S.D. 1

 

 

 

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

 

Madam:

 

     Your Committee on Labor, to which was referred S.B. No. 1181 entitled:

 

"A BILL FOR AN ACT RELATING TO LABOR,"

 

begs leave to report as follows:

 

     The purpose of this measure is to require the Department of Labor and Industrial Relations to use a standard reporting form to report the fringe benefit rate paid to laborers who perform work for the construction of public works projects.

 

     Fringe benefits are a component of the prevailing wage, which is required to be paid to laborers on public works projects pursuant to chapter 104, Hawaii Revised Statutes.  In making prevailing wage determinations, Act 229, Session Laws of Hawaii 2005, requires the Director of Labor and Industrial Relations to select the modal rate, or the rate of the greatest number of employees in the State, as the prevailing wage rate in a corresponding class of laborers.  Since this requirement favors collective bargaining rates for certain classifications due to the large number of union workers in certain labor markets, the Department of Labor and Industrial Relations uses this method to calculate prevailing wage rates for union workers, and conducts surveys or uses average wages to determine prevailing wage rates for labor classifications that do not have corresponding union rates or modal rates.

 

     Testimony in support of this measure was submitted by one organization.  Testimony in opposition to this measure was submitted by one state agency.  Written testimony presented to the Committee may be reviewed on the Legislature's website.

 

     Your Committee finds that the current reporting of fringe benefits by employers is inadequate, and that there should be a reasonable way for laborers to determine the itemization of their fringe benefits through public records.  Employers are currently only required to check a box indicating that they are in compliance with the payment of fringe benefit wages required under chapter 104, Hawaii Revised Statutes.  Hourly wages, but not fringe benefits, are listed as itemized payments to prove compliance.

 

     Your Committee finds that the Department of Labor and Industrial Relations already conducts annual surveys to determine prevailing wage rates for job classifications that are not updated according to prevailing wage rates from collective bargaining agreements, and that the provision in this measure to conduct biannual surveys is unnecessary.  Your Committee also finds that the portion of the proposed section 104-2(b)(1)(C), Hawaii Revised Statutes, that lists the required itemizations for the fringe benefit reporting form would be more appropriately codified under section 104-3, Hawaii Revised Statutes, relating to payrolls and payroll records.

 

     Your Committee notes the concern that requiring the reporting of certain fringe benefit information on certified payroll may reveal proprietary information.  However, your Committee believes that fringe benefits are monies that belong to the laborers and that laborers, therefore, should be able to easily access the itemization of their fringe benefits.

 

     Your Committee has accordingly amended this measure as follows:

 

     (1)  By eliminating the portion of the proposed section 104‑2(b)(1)(C), Hawaii Revised Statutes, that requires the Department of Labor and Industrial Relations to determine the prevailing cost of fringe benefits through a biannual survey;

 

     (2)  By deleting the portion of the proposed section 104‑2(b)(1)(C), Hawaii Revised Statutes, that lists the required itemizations of the fringe benefit reporting form, and reinserting it into section 104-3(a), Hawaii Revised Statutes;

 

     (3)  By amending the effective date to July 1, 2050, for the purpose of encouraging further discussion; and

 

     (4)  By making technical, nonsubstantive amendments for the purposes of clarity and consistency and to correctly reflect the language in the Hawaii Revised Statutes.

 

     As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1181, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1181, S.D. 1, and be referred to the Committee on Judiciary and Government Operations.

 

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

 

 

 

____________________________

DWIGHT Y. TAKAMINE, Chair