REPORT TITLE:
Penalty Provision

DESCRIPTION:
Amends existing penalty provisions applied to contractors who
violate Chapter 104, HRS, which deals with the wages and hours of
employees on public works.  Creates a special fund for
enforcement of Chapter 104, HRS.  (HB96 HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        96
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO PENALTIES.



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

 1      SECTION 1.  Chapter 104, Hawaii Revised Statutes, is amended
 
 2 by adding a new section to be appropriately designated and to
 
 3 read as follows:
 
 4      "104-     Prevailing wage enforcement fund.  (a)  There is
 
 5 established in the state treasury the prevailing wage enforcement
 
 6 fund, into which shall be deposited all monetary penalties
 
 7 collected for violations of this chapter.
 
 8      (b)  Moneys in the prevailing wage enforcement fund shall be
 
 9 used by the department for the purpose of enforcing this chapter.
 
10      (c)  All expended and unencumbered moneys remaining in the
 
11 prevailing wage enforcement fund at the close of each fiscal year
 
12 that are deemed by the director of finance to be in excess of the
 
13 moneys necessary to carry out the purposes of this section over
 
14 the next following fiscal year shall lapse to the credit of the
 
15 state general fund.
 
16      (d)  Any amount to be deposited into the prevailing wage
 
17 enforcement fund from the revenues collected under this chapter
 
18 that causes the prevailing wage enforcement fund to exceed
 
19 $          shall be deposited into the general fund.  No further
 
20 deposits from the revenues collected under this chapter shall be
 

 
Page 2                                                     96
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 made into the prevailing wage enforcement fund until the balance
 
 2 of the prevailing wage enforcement fund drops below $           ,
 
 3 in which event monetary penalties collected for violations of
 
 4 this chapter shall be deposited into the prevailing wage
 
 5 enforcement fund until the balance equals $           ."
 
 6      SECTION 2.  Section 104-24, Hawaii Revised Statutes, is
 
 7 amended to read as follows:
 
 8      "104-24  Violations; penalties.(a)  Where the department
 
 9 finds that a first violation of this chapter has been committed,
 
10 the department shall assess a penalty [of not more than $1,000
 
11 for each offense.] equal to the amount of back wages found due or
 
12 $100 for each offense, whichever is greater.
 
13      (b)  Where a second or third violation occurs, whether on
 
14 the same contract or another, within two years of the date of the
 
15 notification of the first violation, the director, after proper
 
16 notice and opportunity for hearing, shall order the person or
 
17 firm in violation:
 
18      (1)  If it be a second violation, to pay a penalty [of ten
 
19           per cent of the contract amount;] equal to three times
 
20           the amount of back wages found due or $300 for each
 
21           offense, whichever is greater.  If this violation was
 
22           made by a subcontractor, the penalty will be based on
 
23           the portion of the contract attributable to the
 
24           subcontractor's work; or
 

 
Page 3                                                     96
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (2)  If it be a third violation, to pay a penalty equal to
 
 2           five times the amount of back wages found due or $500
 
 3           for each offense, whichever is greater, and to be
 
 4           suspended as prescribed in section 104-25[.]; provided
 
 5           that the person or firm shall not be suspended from
 
 6           doing any work on current contracts."
 
 7      SECTION 3.  Section 104-25, Hawaii Revised Statutes, is
 
 8 amended by amending subsection (a) to read as follows:
 
 9      "(a)  The director shall suspend a person or firm from doing
 
10 any work on any public work of a governmental contracting agency
 
11 for a period of three years if the person or firm:
 
12      (1)  Commits a third violation of this chapter within two
 
13           years from the date of the notification of the first
 
14           violation;
 
15      (2)  Fails to make the person's or firm's employees whole
 
16           for wages or overtime pay due under the contract; or
 
17      (3)  Fails to pay any penalty assessed."
 
18      SECTION 4.  Statutory material to be repealed is bracketed.
 
19 New statutory material is underscored.
 
20      SECTION 5.  This Act shall take effect upon its approval.