HB1352

SECTION 1. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

short-time compensation program

§ -1 Definitions. As used in this chapter:

"Affected unit" means a specified plant, department, shift, or other definable unit which includes or more workers to which an approved short-time compensation plan applies.

"Director" means the director of labor and industrial relations.

"Health and retirement benefits" means employer-provided health benefits, and retirement benefits under a defined benefit pension plan (as defined in section 414(j) of the Internal Revenue Code of 1986, as amended) or contributions under a defined contribution plan (as defined in section 414(i) of the Internal Revenue Code of 1986, as amended), which are incidents of employment in addition to the cash remuneration earned.

"Short-time compensation" means the unemployment benefits payable to employees in an affected unit under an approved short-time compensation plan, as distinguished from the unemployment benefits otherwise payable under chapters 383 and 385.

"Short-time compensation plan" means a plan submitted by an employer, for approval by the director, under which the employer requests the payment of short-time compensation to workers in an affected unit of the employer to avert layoffs.

"Usual weekly hours of work" means the usual hours of work for full-time or part-time employees in the affected unit when that unit is operating on its regular basis, not to exceed forty hours and not including hours of overtime work.

"Unemployment compensation" means the unemployment benefits payable under chapter 383, other than short-time compensation, and includes any amounts payable pursuant to an agreement under any federal law providing for compensation, assistance, or allowances with respect to unemployment.

§ -2 Short-time compensation program; application. (a) The director shall develop an application form for an employer to request approval of a short-time compensation plan. The director shall develop an approval process for such applications.

(b) An employer wishing to participate in the short-time compensation program shall submit an application and written short-time compensation plan to the director for approval.

(1) The affected unit or units covered by the plan, including the number of full-time or part-time workers in each unit, the percentage of workers in the affected unit covered by the plan, identification of each individual employee in the affected unit by name and social security number, the employer's unemployment tax account number, and any other information required by the director to identify plan participants;

(2) A description of how workers in the affected unit will be notified of the employer's participation in the short-time compensation program if such application and plan are approved, including how the employer will notify those workers in a collective bargaining unit as well as any workers in the affected unit who are not in a collective bargaining; provided that if the employer will not provide advance notice to workers in the affected unit, the employer shall explain in a statement in the application why it is not feasible to provide such notice;

(3) Identification of the usual weekly hours of work for employees in the affected unit and the specific percentage by which their hours will be reduced during all weeks covered by the plan; provided that the percentage of reduction shall be not less than ten per cent and not more than sixty per cent; provided further that if the plan includes a week for which the employer regularly provides no work, such as a holiday or other closing, then such week shall be identified in the application;

(4) Certification by the employer that, if the employer provides health and retirement benefits to any employee whose usual weekly hours of work are reduced under the program, such benefits shall continue to be provided to employees participating in the short-time compensation program under the same terms and conditions as though the usual weekly hours of work of the employee had not been reduced, or to the same extent as other employees not participating in the short-time compensation program; provided that, notwithstanding paragraph (4), an application may contain the required certification when a reduction in health and retirement benefits scheduled to occur during the duration of the plan will be applicable equally to employees who are not participating in the short-time compensation plan and to employees who are participating in the short-time compensation plan;

(5) Certification by the employer that the aggregate reduction in work hours is in lieu of layoffs, including an estimate of the number of employees who would have been laid off in the absence of the short-time compensation plan;

(6) Agreement by the employer to:

(A) Furnish reports to the director relating to the implementation of the plan;

(B) Allow the director or the director's authorized representatives access to all records necessary to approve or disapprove the application and plan and, after approval, to monitor and evaluate the plan; and

(C) Follow any other directives the director deems necessary for the implementation of the plan and which are consistent with the requirements for applications;

(7) Certification by the employer that the short-time compensation plan and its implementation are consistent with the employer's obligations under applicable state and federal laws;

(8) The intended effective date and duration of the plan; provided that the plan shall expire no later than the end of the twelfth full calendar month after the plan's effective date; and

(9) Any other provisions added to the application by the director that the United States Secretary of Labor determines to be appropriate for the purposes of a short-time compensation plan.

(d) For defined benefit retirement plan benefits paid pursuant to subsection (c)(4), the hours reduced under the short-time compensation plan shall be credited for purposes of participation, vesting, and accrual benefits as though the usual weekly hours of work had not been reduced. For employer contributions to a defined contribution plan paid pursuant to subsection (c)(4), the dollar amount of the employer's contributions may be less due to the reduction in the employee's compensation.

§ -3 Plan approval and disapproval. (a) The director shall approve or disapprove a short-time compensation plan in writing within days of receipt of the plan and promptly communicate the decision to the employer.

(b) A decision disapproving of the plan shall clearly identify the reasons for the disapproval.

(c) If a plan is disapproved, the employer may submit a new short-time compensation plan for approval no earlier than days from the date of the disapproval.

§ -4 Plan effective date and duration. (a) A short-time compensation plan shall be effective on the date that is mutually agreed upon by the employer and the director, which shall be specified in the notice of approval to the employer.

(b) A short-time compensation plan shall expire on the date specified in the notice of approval, which shall be either the date at the end of the twelfth full calendar month after its effective date, or an earlier date that is mutually agreed upon by the employer and the director.

(c) If a short-time compensation plan is revoked by the director pursuant to section -5, the plan shall terminate on the date specified in the director's written order of revocation.

(d) An employer may terminate a short-time compensation plan at any time upon written notice to the director; provided that upon receipt of notice of termination from the employer, the director shall promptly notify each member of the affected unit of the termination date.

(e) An employer may submit a new application to participate in another short-time compensation plan at any time after the expiration or termination date of the current short-time compensation plan.

§ -5 Plan revocation; review. (a) The director may revoke approval for a short-time compensation plan for good cause at any time, including upon the request of any of the affected unit's employees.

(b) The revocation order shall be in writing and shall specify the reasons for the revocation and the revocation's effective date.

(c) The director may periodically review the operation of each employer's short-time compensation plan to assure that no good cause exists for revocation of the approved plan.

(d) For the purposes of this section, "good cause" shall include but not be limited to failure to comply with the assurances given in the plan, unreasonable revision of productivity standards for the affected unit, conduct or occurrences tending to defeat the intent and effective operation of the short-time compensation plan, and violation of any criteria on which approval of the plan was based.

§ -6 Modification of an approved short-time compensation plan. (a) An employer may request a modification of an approved plan by filing a written request to the director. The request shall identify the specific provisions proposed to be modified and provide an explanation of why the proposed modification is appropriate for the short-time compensation plan.

(b) The director shall approve or disapprove the proposed modification in writing within days of receipt of the request and promptly communicate the decision to the employer, if approved, the effective date of the modification.

(c) The director may, at their discretion, approve a request for modification of the plan based on conditions that have changed since the plan was approved; provided that the modification is consistent with and supports the purposes for which the plan was initially approved.

(d) A modification to the approved plan shall not extend the original expiration date of the approved plan.

(e) An employer is not required to request approval of a plan modification if the change is not substantial; provided that if the director determines that the change is substantial, the director shall require the employer to request a modification of the plan.

(f) The employer shall notify the director, promptly and in writing, of all changes to the plan. The director may terminate the plan if the employer fails to report a change to the plan.

§ -7 Eligibility for short-time compensation. (a) An individual is eligible to receive short-time compensation with respect to any week only if the individual is monetarily eligible for unemployment compensation, or not otherwise disqualified from unemployment compensation, and:

(1) During the week, the individual is employed as a member of an affected unit under an approved short-time compensation plan, which was approved prior to that week, and the plan is in effect with respect to the week for which short-time compensation is claimed; and

(2) Notwithstanding any other provisions of this chapter, the individual is available for the individual's usual hours of work with the short-time compensation employer, which may include, for purposes of this section, participating in training to enhance job skills, as approved by the director.

(b) Notwithstanding any other provision of law, an individual covered by a short-time compensation plan is deemed unemployed in any week during the duration of such plan if the individual's remuneration as an employee in an affected unit is based on a reduction of the individual's usual weekly hours of work under an approved short-time compensation plan.

§ -8 Benefits. (a) In a short-time compensation plan, the weekly benefit amount shall be the product of the regular weekly unemployment compensation amount for a week of total unemployment multiplied by the percentage of reduction in the individual's usual weekly hours of work.

(b) An individual may be eligible for short-time compensation or unemployment compensation, as appropriate, except that no individual shall be eligible for combined benefits in any benefit year in any amount more than the maximum entitlement established for regular unemployment benefits.

(c) No individual shall be paid short-time compensation benefits for more than fifty-two weeks under a short-time compensation plan.

(d) The short-time compensation paid to an individual shall be deducted from the maximum entitlement amount of regular unemployment compensation established for that individual's benefit year.

(e) Provisions applicable to unemployment compensation shall apply to short-time compensation employees to the extent that they are not inconsistent with the provisions of this chapter; provided that an employee who files an initial claim for short-time compensation benefits shall receive a monetary determination.

(f) If an individual works for both a short-time compensation employer and another employer during the weeks covered by the approved short-time compensation plan, the following provisions shall apply:

(1) If the combined hours of work in a week for both employers does not result in a reduction of at least ten per cent of the usual weekly hours of work with the short-time employer, the individual shall not be entitled to benefits under this chapter;

(2) If the combined hours of work in a week for both employers results in a reduction equal to or greater than ten per cent of the usual weekly hours of work for the short-time compensation employer, the short-time compensation benefit amount payable to the individual shall be reduced for that week and is determined by multiplying the weekly unemployment benefit amount for a week of total unemployment by the percentage by which the combined hours of work have been reduced by ten per cent or more of the individual's usual weekly hours of work; provided that a week for which benefits are paid under this provision shall be reported as a week of short-time compensation;

(3) If an individual worked the reduced percentage of the usual weekly hours of work for the short-time compensation employer and is available for all the individual's usual hours of work with the short-time compensation employer, and the individual did not work any hours for the other employer, either because of lack of work with that employer or because the individual is excused from work with the other employer, the individual shall be eligible for short-time compensation for that week; provided that the benefit amount for such week shall be calculated according to subsection (a).

(g) An individual who is not provided any work during a week by the short-time compensation employer, or any other employer, and who is otherwise eligible for unemployment compensation shall be eligible for the amount of regular unemployment compensation to which they would otherwise be eligible.

(h) An individual who is not provided any work by the short-time compensation employer during a week, but who works for another employer and is otherwise eligible, may be paid unemployment compensation for that week subject to the disqualifying income and other provisions applicable to claims for regular unemployment compensation.

§ -9 Charges for benefits. (a) Short-time compensation shall be charged to the short-time compensation employer in the same manner as unemployment compensation is charged section 383-65.

(b) Employers liable for payments in lieu of contributions shall have short-time compensation attributed to service in their employ in the same manner as unemployment compensation is attributed.

§ -10 Extended benefits. An individual who has received all of the short-time compensation, or combined unemployment compensation and short-time compensation, available in a benefit year shall be considered an exhaustee for purposes of the extended benefits program, sections 383-168 to 383-174, and, if otherwise eligible under the program, shall be eligible to receive extended benefits.

§ -11 Rules. The director shall adopt rules pursuant to chapter 91 to carry out the purposes of this chapter."

SECTION 2. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	1352
THIRTY-SECOND LEGISLATURE, 2023
STATE OF HAWAII