THE SENATE	S.B. NO.	2261
TWENTY-SEVENTH LEGISLATURE, 2014
STATE OF HAWAII

A BILL FOR AN ACT

relating to wages and hours on public works.

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

     SECTION 1.  Chapter 104, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§104-   Laws shall not be waived by private agreement. No requirement under this chapter shall be contravened or set aside in any manner by private agreement."

     SECTION 2.  Section 104-1, Hawaii Revised Statutes, is amended to read as follows:

"§104-1  Definitions.  As used in this chapter, the following words and phrases shall have the following meanings[:], except as otherwise provided:

     [(1)]  "Basic hourly rate" means the hourly wage paid to a laborer or mechanic for work performed during nonovertime hours, but shall not include the cost to an employer of furnishing fringe benefits whether paid directly or indirectly to the laborer or mechanic as [provided in paragraph (7);] defined under the definition of "wages".

     [(2)]  "Construction" includes alteration, repair, painting and decorating[;].

"Contractor" means the general contractor or any subcontractor, including any individual, partnership, firm, corporation, joint venture, or other legal entity, acting directly or through an agent, employee, consultant, corporate officer, or corporate director undertaking the execution of a construction contract over $2,000 with a governmental contracting agency.

     [(3)]  "Department" means the department of labor and industrial relations[;].

     [(4)]  "Director" means the director of labor and industrial relations of the State[;].

     [(5)]  "Governmental contracting agency" means the State, any county and any officer, bureau, board, commission, or other agency or instrumentality thereof[;].

     [(6)]  "Overtime compensation" means compensation based on one and one-half times the laborers or mechanics basic hourly rate of pay plus the cost to an employer of furnishing a laborer or mechanic with fringe benefits as [described in paragraph (7);] defined under the definition of "wages".

"Public work" means any project, including development of any housing pursuant to section 46-15 or chapter 201H and development, construction, renovation, and maintenance related to refurbishment of any real or personal property, where the funds or resources required to undertake the project are to any extent derived, either directly or indirectly, from public revenues of the State or any county, or from the sale of securities or bonds whose interest or dividends are exempt from state or federal taxes.

     [(7)]  "Wages", "rate of wages", "wage rates", "minimum wages" and "prevailing wages" mean the basic hourly rate and the cost to an employer of furnishing a laborer or mechanic with fringe benefits, including but not limited to health and welfare benefits, vacation benefits, and pension benefits, whether paid directly or indirectly to the laborer or mechanic."

     SECTION 3.  Section 104-2, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  This chapter shall apply to every contract in excess of $2,000 for construction of a public work project to which a governmental contracting agency is a party; provided that this chapter shall not apply to experimental and demonstration housing developed pursuant to section 46-15 or housing developed pursuant to chapter 201H if the cost of the project is less than $500,000 and the eligible bidder or eligible developer is a private nonprofit corporation.

     For the purposes of this subsection:

     "Contract" includes but is not limited to any agreement, purchase order, or voucher in excess of $2,000 for construction of a public work project.

     "Governmental contracting agency" includes any person or entity that causes either directly or indirectly the building or development of a public work.

     "Party" includes eligible bidders for and eligible developers of any public work and any housing under chapter 201H; provided that this subsection shall not apply to any housing developed under section 46-15 or chapter 201H if the entire cost of the project is less than $500,000 and the eligible bidder or eligible developer is a private nonprofit corporation.

     ["Public work" means any project, including development of any housing pursuant to section 46-15 or chapter 201H and development, construction, renovation, and maintenance related to refurbishment of any real or personal property, where the funds or resources required to undertake the project are to any extent derived, either directly or indirectly, from public revenues of the State or any county, or from the sale of securities or bonds whose interest or dividends are exempt from state or federal taxes.]"

     SECTION 4.  Section 104-22, Hawaii Revised Statutes, is amended to read as follows:

"§104-22  Investigation; penalties.  (a)  The department may conduct investigations to determine compliance with this chapter.  The department may enter the job site, examine records of any contractor, either during or after the performance of any contract, or subpoena the records.  The department may also interview employees during working hours on the job.

     (b)  If any contractor, subcontractor, of the agent of the subcontractor or contractor interferes with or delays any investigation by the department, the governmental contracting agency, on receipt of written notice from the director of the interference or delay, shall withhold from the contractor all further payments until the director has notified the governmental contracting agency in writing that the interference or delay has ceased.  Interference or delay includes failure to provide requested records under section 104-3; failure to allow employees to be interviewed during working hours on the job; and falsification of records required under this chapter.  The department shall assess a penalty of [$1,000] $10,000 per project for interference or delay.  For each day thereafter that the employer fails to cooperate, the director shall assess a penalty of [$100] $1,000 per project.

(c)  The general contractor shall be secondarily liable for the payment of any back wages and penalties imposed on any of its subcontractors that are unpaid on the twenty-first day after the notification of violation has been sent or a decision has been issued pursuant to section 104-23(c), whichever occurs later."

     SECTION 5.  Section 104-23, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  A notification of violation shall be final and conclusive unless within twenty days after a copy [was mailed to the violator, unless within the twenty-day period the violator] has been sent to the contractor, the contractor files a written notice of appeal with the director."

     SECTION 6.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 7.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 8.  This Act shall take effect upon its approval.

INTRODUCED BY:

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Report Title:

Public Work; Contractors; Liability; Penalties; Notice

Description:

Prohibits private agreements from contravening or setting aside any requirement under chapter 104, HRS.  Adds definitions of "contractor" and "public work".  Increases the prevailing wage penalty from $1,000 per project and $100 per day to $10,000 per project and $1,000 per day.  Clarifies that general contractors are secondarily liable for payment of back wages and penalties imposed on any of their subcontractors.  Requires notifications of violations to be final and conclusive unless within 20 days after a copy is sent to the contractor, the contractor files a written notice of appeal.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.