Report Title:
Unemployment Insurance
Description:
Allows employers to retain an employee on a reduced hourly basis without having to worry about affecting the employee's unemployment eligibility benefits.
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
2264 |
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TWENTY-FIRST LEGISLATURE, 2002 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to unemployment insurance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The principal objectives of the federal unemployment compensation system are to temporarily replace a part of the unemployed individuals' lost wages and help stabilize the economy during a recession. Eligibility and disqualification criteria, as well as benefit amount and duration, are set by state law. Benefits are funded by state payroll taxes on employers.
The attacks on the United States on September 11, 2001, caused a shock wave felt throughout the national economy. Hawaii's economy has suffered an immediate and significant downturn, with hotels, airlines, and other tourism-related industries losing millions of dollars in revenue. This has resulted in the layoffs of thousands of employees. In fact, in the weeks following the attacks, unemployment rates nearly tripled in Hawaii.
Although thousands of individuals joined the ranks of the unemployed because of the attacks of September 11th, many more individuals suffered severe cutbacks in their hours of work. Hawaii law allows these "partially unemployed" individuals to claim unemployment benefits, as long as the individual's wages are less than their weekly unemployment benefit payments and they are working less than the normal customary full-time hours. However, after an individual earns more than $50 per week, unemployment benefits are reduced. Thus, there is no incentive for a worker to work meaningful hours if unemployment benefits are reduced after the worker earns more than $50. The State is also affected by this disincentive to work. Unemployment fund contributions are reduced, employees lose medical benefits and enroll in the State's QUEST program, the reduction in the available unemployment fund is increased, and tax revenues are decreased. Over time, these factors become a tremendous economic burden to the State.
The purpose of this Act is to allow employers to retain an employee on a reduced, hourly basis without having to worry about affecting the employee's unemployment eligibility benefits.
SECTION 2. Section 383-11, Hawaii Revised Statutes, is amended to read as follows:
"§383-11 Excluded payments. "Wages" does not include:
(1) The amount of any payment (including any amount paid by an employing unit for insurance or annuities, or into a fund, to provide, for any such payment) to, or on behalf of, an individual or any of the individual's dependents under a plan or system established by an employing unit which makes provision generally for individuals performing service for it (or for such individuals generally and their dependents) or for a class or classes of such individuals (or for a class or classes of such individuals and their dependents), on account of:
(A) [retirement, or] Retirement;
(B) [sickness] Sickness or accident disability[, or];
(C) [medical] Medical or hospitalization expenses in connection with sickness or accident disability[,]; or
(D) [death;] Death;
(2) The amount of any payment by an employing unit to an individual performing service for it (including any amount paid by an employing unit for insurance or annuities or into a fund, to provide for any such payment) on account of retirement;
(3) The amount of any payment on account of sickness or accident disability, or medical or hospitalization expenses in connection with sickness or accident disability, by an employing unit to, or on behalf of, an individual performing services for it after the expiration of six calendar months following the last calendar month in which the individual performed services for the employing unit;
(4) The amount of any payment by an employing unit to, or on behalf of, an individual performing services for it or the individual's beneficiary:
(A) [from] From or to a trust described in section 401(a) and exempt from tax under section 501(a) of the federal Internal Revenue Code at the time of the payment unless the payment is made to an individual performing services for the trust as remuneration for such services and not as a beneficiary of the trust[,]; or
(B) [under] Under or to an annuity plan which, at the time of the payments, meets the requirements of section 401(a)(3), (4), (5), and (6) of the federal Internal Revenue Code;
(5) The amount of any payment by an employing unit (without deduction from the remuneration of the individual in its employ) of the tax imposed upon an individual in its employ under section 3101 of the federal Internal Revenue Code;
(6) Remuneration paid in any medium other than cash to an individual for service not in the course of the employing unit's trade or business;
(7) The amount of any payment (other than vacation or sick pay) to an individual after the month in which the individual attains the age of sixty-five, if the individual did not perform services for the employing unit in the period for which such payment is made;
(8) The amount of any payment (not required under any contract of hire) to an individual with respect to the individual's period of training or service in the armed forces of the United States by an employing unit by which the individual was formerly employed;
(9) The amount of any payment (including any amount paid by an employer into a fund to provide for such payment) made after April 1, 1956, to or on behalf of an employee under a written agreement, contract, trust arrangement, or other instrument, which makes provision for the employer's employees generally or for a class or group of the employer's employees, for the purpose of supplementing benefits paid under this chapter or providing benefits based on wages paid for excluded services[.]; and
(10) Payments received from a department-approved employer supplemental unemployment benefit plan of an amount up to, but not exceeding, an amount equal to the employee's weekly benefit amount."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act shall take effect upon its approval.
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INTRODUCED BY: |
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