STAND. COM. REP. NO. 793

Honolulu, Hawaii

RE: S.B. No. 415

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 415, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO WAGES,"

begs leave to report as follows:

The purpose and intent of this measure is to hold general contractors entering into or under contracts in the State for work on buildings, structures, or other private works liable for debt incurred by subcontractors for wages due to claimants for performance of labor in the contract between the general contractor and owner.

Your Committee received testimony in support of this measure from the Department of Labor and Industrial Relations and Hawaii Regional Council of Carpenters. Your Committee received testimony in opposition to this measure from Associated Builders and Contractors, Subcontractors Association of Hawaii, and one individual. Your Committee received comments on this measure from the General Contractors Association of Hawaii.

Your Committee finds that for state construction projects, a general contractor is the party in direct privity with the State and is responsible for the day-to-day oversight of the construction project. A general contractor often subcontracts for specialized work to satisfy its obligations under its contract with the State. If a general contractor hires a subcontractor who fails to pay its employees' wages, the employee has no recourse against the general contractor. This measure holds general contractors liable for a subcontractor's failure to pay its employees for certain construction projects.

Your Committee notes the concerns raised in testimony that an amendment to the definition of "employer" in Hawaii's wage laws is necessary for this measure to be enforceable.

Accordingly, your Committee has amended this measure by:

(1) Inserting language amending the definition of "employer" in section 388-1, Hawaii Revised Statutes, to include general contractors for purposes of wages owed to a subcontractor's employees; and

(2) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 415, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 415, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Commerce and Consumer Protection,

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JARRETT KEOHOKALOLE, Chair