REPORT TITLE:
Wage Laws Enforcement

DESCRIPTION:
Clarifies that attorney's fees and other costs of the opposing
party shall not be assessed against the Director of Labor and
Industrial Relations in cases involving the collection of unpaid
wages.  Increases violations, penalties, and suspensions for
repeated violations involving the wage violations, non-payment of
penalties.  (SB1149 HD1)

 
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THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 1999                                H.D. 1
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO ENFORCEMENT OF WAGE LAWS. 



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

 1      SECTION 1.  Section 104-24, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "§104-24  Violations; penalties.(a)  Where the department
 
 4 finds that a first violation of this chapter has been committed,
 
 5 the department shall assess a penalty [of not more than $1,000
 
 6 for each offense.] equal to ten per cent of the amount of back
 
 7 wages found due or $25 per offense, whichever is greater.
 
 8      [(b) Where a second or third violation occurs, whether on
 
 9 the same contract or another, within two years of the first
 
10 violation, the director, after proper notice and opportunity for
 
11 hearing, shall order the person or firm in violation:
 
12      (1)  If it be a second violation, to pay a penalty of ten
 
13           per cent of the contract amount; or
 
14      (2)  If it be a third violation, to be suspended as
 
15           prescribed in section 104-25.]
 
16      (b)  Where the department finds that a second violation of
 
17 this chapter has been committed, whether on the same contract or
 
18 another, within two years of the first notification of violation,
 
19 the department, after proper notice and opportunity for hearing,
 

 
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 1 shall order the person or firm in violation to pay a penalty
 
 2 equal to the amount of back wages found due or $100 for each
 
 3 offense, whichever is greater.
 
 4      (c)  Where the department finds that a third violation of
 
 5 this chapter has been committed, whether on the same contract or
 
 6 another, within two years of the first notification of violation,
 
 7 the department, after proper notice and opportunity for hearing,
 
 8 shall order the person or firm in violation:
 
 9      (1)  To pay a penalty equal to two times the amount of back
 
10           wages found due or $200 for each offense, whichever is
 
11           greater; and
 
12      (2)  To be suspended from doing any work on any new contract
 
13           on any public work of a governmental contracting agency
 
14           for a period of three years.  "New contract" includes
 
15           any contract awarded in which no work has yet been
 
16           performed at the job site as of the date of the
 
17           suspension order.
 
18      (d)  A first, second, or third violation refers to the
 
19 first, second, or third investigation in which the department
 
20 finds that a contractor has failed to comply with this chapter.
 
21      (e)  Each section of this chapter for which the contractor
 
22 is cited, with respect to each employee and each project, shall
 
23 constitute a separate offense."
 

 
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 1      SECTION 2.  Section 104-25, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "§104-25  Suspension.  [(a)  The director shall suspend a
 
 4 person or firm from doing any work on any public work of a
 
 5 governmental contracting agency for a period of three years if
 
 6 the person or firm:
 
 7      (1)  Commits a third violation of this chapter within two
 
 8           years from the date of the first violation;
 
 9      (2)  Fails to make the person's or firm's employees whole
 
10           for wages or overtime pay due under the contract; or
 
11      (3)  Fails to pay any penalty assessed.]
 
12      (a)  The director shall suspend a person or firm as follows:
 
13      (1)  For a first or second violation, if a person or firm
 
14           fails to pay wages found due, any penalty assessed, or
 
15           both, the person or firm shall be immediately suspended
 
16           from doing any work on any public work of a
 
17           governmental contracting agency until all such wages
 
18           and penalties are paid in full; and
 
19      (2)  For a third violation, the suspension shall be as
 
20           prescribed in section 104-24(c); however, if the person
 
21           or firm continues to violate this chapter or fails to
 
22           pay wages found due or any penalty assessed, then the
 
23           contractor shall immediately be suspended from doing
 

 
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 1           any work on any public work of a governmental
 
 2           contracting agency for a period of three years.
 
 3      (b)  The director shall immediately notify the comptroller
 
 4 and the auditor or director of finance of the county of any
 
 5 suspension order.
 
 6      (c)  On application by [the suspended] a person or firm
 
 7 suspended under subsection (a)(2), no less than one year from the
 
 8 date of suspension, the director, after a hearing, may shorten
 
 9 the term of suspension; provided that the contractor or
 
10 subcontractor has made the contractor's or subcontractor's
 
11 employees whole for wages or overtime pay due and has paid to the
 
12 director all penalties assessed under this chapter.
 
13      (d)  No contract shall be awarded to the person or firm so
 
14 suspended or to any firm, corporation, partnership, or
 
15 association in which the person or firm has an interest, direct
 
16 or indirect, until three years have elapsed from the date of
 
17 suspension, unless the period of suspension is reduced as herein
 
18 provided.  Any contract awarded in violation of this subsection
 
19 shall be void."
 
20      SECTION 3.  Section 387-12, Hawaii Revised Statutes, is
 
21 amended by amending subsection (c) to read as follows:
 
22      "(c)  Collection suits; attorney's fee; assignments; relief
 
23 from costs.  Action to recover such liability may be maintained
 

 
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 1 in any court of competent jurisdiction by any one or more
 
 2 employees for and in behalf of oneself or themselves and other
 
 3 employees similarly situated, or the employee or employees may
 
 4 designate an agent or representative to maintain action for and
 
 5 in behalf of all employees similarly situated. The court in such
 
 6 action shall, in addition to any judgment awarded to the
 
 7 plaintiff or plaintiffs, in the event the plaintiff or plaintiffs
 
 8 prevail, allow a reasonable attorney's fee to be paid by the
 
 9 defendant[,] and costs of the action.  At the request of any
 
10 person paid less than the amount to which the person is entitled
 
11 under this chapter, the director [of labor and industrial
 
12 relations] may take an assignment in trust for the assigning
 
13 employee of the full amount to which the employee is entitled
 
14 under this subsection and may bring any legal action necessary to
 
15 collect the claim, and the employer shall be required to pay the
 
16 costs and such reasonable attorney's fees as may be allowed by
 
17 the court in the event the director prevails.  The director shall
 
18 not be required to pay the filing fee[,] or other costs[,] in
 
19 connection with such action[.], including the defendant's
 
20 attorney's fees and costs.  The director, in case of suit, may
 
21 join various claimants against the same employer in one cause of
 
22 action.  The right provided by this [paragraph] subsection to
 
23 bring an action by or on behalf of any employee, and the right of
 

 
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 1 any employee to become a party plaintiff to any such action,
 
 2 shall terminate upon the filing of a complaint by the director in
 
 3 an action in which restraint is sought of any further delay in
 
 4 the payment of unpaid minimum wages, or the amount of unpaid
 
 5 overtime compensation owing to the employee under section 387-2
 
 6 or 387-3 by an employer liable therefor under this section."
 
 7      SECTION 4.  Section 388-11, Hawaii Revised Statutes, is
 
 8 amended by amending subsection (c) to read as follows:
 
 9      "(c)  The court in any action brought under this section
 
10 shall, in addition to any judgment awarded to the plaintiff or
 
11 plaintiffs, allow interest of six per cent per year from the date
 
12 the wages were due, costs of action, including costs of fees of
 
13 any nature, and reasonable attorney's fees, to be paid by the
 
14 defendant.  The director shall not be required to [pay]:
 
15      (1)  Pay the filing fee or other costs or fees of any
 
16           nature, including the defendant's attorney's fees and
 
17           costs; or [to file]
 
18      (2)  File a bond or other security of any nature,
 
19 in connection with such action, [or] with proceedings
 
20 supplementary thereto, or as a condition precedent to the
 
21 availability to the director of any process in aid of such action
 
22 or proceedings.  The director may join various claimants in one
 
23 preferred claim or lien, and in case of suit join them in one
 

 
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 1 cause of action."
 
 2      SECTION 5.  Statutory material to be repealed is bracketed.
 
 3 New statutory material is underscored.
 
 4      SECTION 6.  This Act shall take effect upon its approval. 
 

 
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