REPORT TITLE:
Wages


DESCRIPTION:
Requires contractors under a public contract to provide their
employees with specified minimum wages and days off.  Provides
for enforcement and penalties.  Exempts nonprofit institutions
whose chief executive officers earn wages at a specified level.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                            1373        
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO PUBLIC CONTRACTS.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The legislature finds that procurement by
 
 2 contract of services has all too often resulted in the payment of
 
 3 service contractors to their employees of wages at or slightly
 
 4 above the minimum required by the minimum wage laws.  Such
 
 5 minimal compensation tends to inhibit the quantity and quality of
 
 6 services rendered by such employees.  Underpaying employees in
 
 7 this way fosters high turnover, absenteeism, and lackluster
 
 8 performance.  Conversely, adequate compensation promotes
 
 9 amelioration of these undesirable conditions.
 
10      The purpose of this Act is to require service contractors to
 
11 provide a minimum level of compensation that will improve the
 
12 level of services rendered to the public.
 
13      SECTION 2.  Section 103-55, Hawaii Revised Statutes, is
 
14 amended to read as follows:
 
15      "§103-55  Wages, hours, and working conditions of employees
 
16 of contractors supplying services.(a)  Before any prospective
 
17 bidder is entitled to submit any bid for the performance of any
 
18 contract to supply services in excess of $5,000 to any
 
19 governmental agency, the bidder shall certify that the services
 

 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 to be performed will be performed under the following conditions:
 
 2      Wages.  The services to be rendered shall be performed by
 
 3 employees paid at wages or salaries not less than [the wages paid
 
 4 to public officers and employees for similar work.] $8.50 an
 
 5 hour, beginning January 1, 2000, which will thereafter be
 
 6 adjusted annually to correspond with any increases in the
 
 7 Consumer Price Index for the Honolulu region prepared by the
 
 8 Bureau of Labor Statistics of the United States Department of
 
 9 Labor which have occurred in the last twelve months ending
 
10 June 30 of the year preceding.
 
11      Compensated days off.  Employees shall be provided with at
 
12 least twelve compensated days off per year for sick leave,
 
13 vacation, or personal necessity at the employee's request.
 
14 Employees shall also be provided with at least an additional ten
 
15 days a year of uncompensated time to be used for sick leave for
 
16 the illness of the employee or a member of the employee's
 
17 immediate family where the employee has exhausted the employee's
 
18 compensated days off for that year.
 
19      Compliance with labor laws.  All applicable laws of the
 
20 federal and state governments relating to workers' compensation,
 
21 unemployment compensation, payment of wages, and safety will be
 
22 fully complied with.
 
23      (b)  No contract to perform services for any governmental
 

 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 contracting agency in excess of $5,000 shall be granted unless
 
 2 all the conditions of this section are met.  Failure to comply
 
 3 with the conditions of this section during the period of contract
 
 4 to perform services shall result in cancellation of the contract,
 
 5 unless such noncompliance is corrected within a reasonable period
 
 6 as determined by the contracting officer.  Payment in the final
 
 7 settlement of a contract or release of bonds or both shall not be
 
 8 made unless the contracting officer has determined that the
 
 9 noncompliance has been corrected.
 
10      It shall be the duty of the governmental contracting agency
 
11 awarding the contract to perform services in excess of $5,000 to
 
12 enforce this section.
 
13      (c)  This section shall apply to all contracts to perform
 
14 services in excess of $5,000, including contracts to supply
 
15 ambulance service and janitorial service.
 
16      This section shall not apply to:
 
17      (1)  Managerial, supervisory, or clerical personnel.
 
18      (2)  Contracts for supplies, materials, or printing.
 
19      (3)  Contracts for utility services.
 
20      (4)  Contracts to perform personal services under paragraphs
 
21           (2), (3), (12), and (15) of section 76-16.
 
22      (5)  Contracts to operate refreshment concessions in public
 
23           parks, or to provide food services to educational
 

 
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                                     H.B. NO.           
                                                        
                                                        

 
 1           institutions.
 
 2      (6)  Contracts with nonprofit institutions[.] whose chief
 
 3           executive officer earns a salary which when calculated
 
 4           on an hourly basis is less than eight times the lowest
 
 5           wage paid by the institution.
 
 6      (d)  An employee claiming a violation of this section may
 
 7 bring an action in circuit court against a contractor and may be
 
 8 awarded as follows:
 
 9      (1)  For failure to pay wages required under this section,
 
10           the employee may be awarded back pay for each day
 
11           during which the violation continued;
 
12      (2)  For retaliation, the employee may be awarded
 
13           reinstatement, back pay, or other equitable relief
 
14           deemed appropriate by the court;
 
15      (3)  For wilful violations of this section, the employee may
 
16           be awarded treble the amount of back pay; and
 
17      (4)  For an employee who prevails in the enforcement action,
 
18           the employee may be awarded reasonable attorney's fees
 
19           and costs.
 
20      (e)  No contract shall be written under this section with
 
21 the State unless the contract provides that if the contract is
 
22 breached, and the breach is not cured within ten days following
 
23 written notice by the State, the State may, at its option, do any
 

 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 of the following:
 
 2      (1)  Suspend or terminate the contract and require the
 
 3           return of funds paid by the State for services not yet
 
 4           rendered;
 
 5      (2)  Debar the contractor from future contracts with the
 
 6           State for three years or until all penalties and
 
 7           restitution have been fully paid, whichever occurs
 
 8           last; or
 
 9      (2)  Require the contractor to pay any amounts underpaid to
 
10           its employees in violation of subsection (a), the
 
11           State's administrative costs in monitoring the breach
 
12           of contract conditions, liquidated damages, or other
 
13           reasonable sums.
 
14      (f)  Parties subject to this section may by collective
 
15 bargaining agreement provide that the agreement shall supersede
 
16 the requirements of this section.
 
17      (g)  If any provision of this section is declared legally
 
18 invalid by any court of competent jurisdiction, the remaining
 
19 provisions shall remain in full force and extent."
 
20      SECTION 3.  During the first, third, and seventh years
 
21 following the effective date of this Act, and every third year
 
22 thereafter, the state director of finance shall conduct or
 
23 commission an evaluation of this Act's operation and effects.
 

 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 The evaluation shall specifically address at least the following
 
 2 matters:
 
 3      (1)  The extent to which affected contractors are complying
 
 4           with this Act;
 
 5      (2)  The extent to which this Act is affecting the workforce
 
 6           composition of affected contractors;
 
 7      (3)  The extent to which this Act is affecting productivity
 
 8           and service quality of affected contractors; and
 
 9      (4)  The amount by which additional costs of this Act has
 
10           been distributed among workers, their employers, and
 
11           the State.
 
12 Within ninety days of the effective date of this Act, the state
 
13 director of finance shall develop detailed plans for evaluation,
 
14 including a determination of the current and future data needed
 
15 for effective evaluation.
 
16      SECTION 4.  Statutory material to be repealed is bracketed.
 
17 New statutory material is underscored.
 
18      SECTION 5.  This Act shall take effect upon its approval.
 
19 
 
20                              INTRODUCED BY:______________________