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 HD2)

 
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THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 1999                                H.D. 2
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,
 
20 shall order the person or firm in violation to pay a penalty
 

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

 
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 1 each project shall constitute a separate offense."
 
 2      SECTION 2.  Section 104-25, Hawaii Revised Statutes, is
 
 3 amended to read as follows:
 
 4      "§104-25  Suspension.  [(a)  The director shall suspend a
 
 5 person or firm from doing any work on any public work of a
 
 6 governmental contracting agency for a period of three years if
 
 7 the person or firm:
 
 8      (1)  Commits a third violation of this chapter within two
 
 9           years from the date of the first violation;
 
10      (2)  Fails to make the person's or firm's employees whole
 
11           for wages or overtime pay due under the contract; or
 
12      (3)  Fails to pay any penalty assessed.]  (a)  The director
 
13           shall suspend a person or firm as follows:
 
14      (1)  For a first or second violation, if a person or firm
 
15           fails to pay wages found due, any penalty assessed, or
 
16           both, the person or firm shall be immediately suspended
 
17           from doing any work on any public work of a
 
18           governmental contracting agency until all wages and
 
19           penalties are paid in full; provided that the
 
20           suspension shall not exceed three years; and
 
21      (2)  For a third violation, if the person or firm continues
 
22           to violate this chapter or fails to pay wages found due
 
23           or any penalty assessed, then the contractor shall
 

 
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 1           immediately be suspended from doing any work on any
 
 2           public work of a governmental contracting agency for a
 
 3           mandatory three year period.  If after the three year
 
 4           period of suspension the wages found due or penalties
 
 5           assessed are still unpaid, the suspension shall remain
 
 6           in force until payment is made in full.
 
 7      (b)  The director shall immediately notify the comptroller
 
 8 and the auditor or director of finance of the county of any
 
 9 suspension order.
 
10      [(c)  On application by the suspended person or firm, no
 
11 less than one year from the date of suspension, the director,
 
12 after a hearing, may shorten the term of suspension; provided
 
13 that the contractor or subcontractor has made the contractor's or
 
14 subcontractor's employees whole for wages or overtime pay due and
 
15 has paid to the director all penalties assessed under this
 
16 chapter.
 
17      (d)] (c)  No contract shall be awarded to the person or firm
 
18 so suspended or to any firm, corporation, partnership, or
 
19 association in which the person or firm has an interest, direct
 
20 or indirect, until three years have elapsed from the date of
 
21 suspension, unless the period of suspension is reduced as herein
 
22 provided.  Any contract awarded in violation of this subsection
 
23 shall be void."
 

 
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 1      SECTION 3.  Section 387-12, Hawaii Revised Statutes, is
 
 2 amended by amending subsection (c) to read as follows:
 
 3      "(c)  Collection suits; attorney's fee; assignments; relief
 
 4 from costs.  Action to recover such liability may be maintained
 
 5 in any court of competent jurisdiction by any one or more
 
 6 employees for and in behalf of oneself or themselves and other
 
 7 employees similarly situated, or the employee or employees may
 
 8 designate an agent or representative to maintain action for and
 
 9 in behalf of all employees similarly situated. The court in such
 
10 action shall, in addition to any judgment awarded to the
 
11 plaintiff or plaintiffs, in the event the plaintiff or plaintiffs
 
12 prevail, allow a reasonable attorney's fee to be paid by the
 
13 defendant[,] and costs of the action.  At the request of any
 
14 person paid less than the amount to which the person is entitled
 
15 under this chapter, the director [of labor and industrial
 
16 relations] may take an assignment in trust for the assigning
 
17 employee of the full amount to which the employee is entitled
 
18 under this subsection and may bring any legal action necessary to
 
19 collect the claim, and the employer shall be required to pay the
 
20 costs and such reasonable attorney's fees as may be allowed by
 
21 the court in the event the director prevails.  The director shall
 
22 not be required to pay the filing fee[,] or other costs[,] in
 
23 connection with such action[.], including the opposing party's
 

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

 
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 1           connection with such action [or], with proceedings
 
 2           supplementary thereto, or as a condition precedent to
 
 3           the availability to the director of any process in aid
 
 4           of such action or proceedings.  The director may join
 
 5           various claimants in one preferred claim or lien, and
 
 6           in case of suit join them in one cause of action."
 
 7      SECTION 5.  Statutory material to be repealed is bracketed.
 
 8 New statutory material is underscored.
 
 9      SECTION 6.  This Act shall take effect upon its approval. 
 

 
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