REPORT TITLE:
Wage Laws Enforcement

DESCRIPTION:
Clarifies that attorney's fees and other costs of the opposing
party shall not be assessed against the Director of Labor and
Industrial Relations in cases involving the collection of unpaid
wages.  Increases violations, penalties, and suspensions for
repeated violations involving the wage violations, non-payment of
penalties.  (CD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 1999                                H.D. 2
STATE OF HAWAII                                            C.D. 1
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO ENFORCEMENT OF WAGE LAWS. 



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

 1      SECTION 1.  Section 104-24, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "104-24  Violations; penalties.(a)  Where the department
 
 4 finds that a first violation of this chapter has been committed,
 
 5 the department shall assess a penalty [of not more than $1,000
 
 6 for each offense.] equal to ten per cent of the amount of back
 
 7 wages found due or $25 per offense, whichever is greater.
 
 8      [(b) Where a second or third violation occurs, whether on
 
 9 the same contract or another, within two years of the first
 
10 violation, the director, after proper notice and opportunity for
 
11 hearing, shall order the person or firm in violation:
 
12      (1)  If it be a second violation, to pay a penalty of ten
 
13           per cent of the contract amount; or
 
14      (2)  If it be a third violation, to be suspended as
 
15           prescribed in section 104-25.]
 
16      (b)  Where the department finds that a second violation of
 
17 this chapter has been committed, whether on the same contract or
 
18 another, within two years of the first notification of violation,
 
19 the department, after proper notice and opportunity for hearing,
 

 
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 1 shall order the person or firm in violation to pay a penalty
 
 2 equal to the amount of back wages found due or $100 for each
 
 3 offense, whichever is greater.
 
 4      (c)  Where the department finds that a third violation of
 
 5 this chapter has been committed, whether on the same contract or
 
 6 another, within two years of the second notification of
 
 7 violation, the department, after proper notice and opportunity
 
 8 for hearing, shall order the person or firm in violation:
 
 9      (1)  To pay a penalty equal to two times the amount of back
 
10           wages found due or $200 for each offense, whichever is
 
11           greater; and
 
12      (2)  To be suspended from doing any new work on any public
 
13           work of a governmental contracting agency for a period
 
14           of three years except as provided in section
 
15           104-25(a)(2).  "New work on any public work" includes
 
16           any public works project in which the suspended person
 
17           or firm has not begun work at the job site as of the
 
18           date of the suspension order.
 
19      (d)  A first, second, or third violation refers to each
 
20 investigation involving one or more projects in which the
 
21 department finds that a contractor has failed to comply with this
 
22 chapter.
 
23      (e)  For purposes of this section, "offense" means each
 

 
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 1 section of this chapter under which the contractor is cited;
 
 2 provided that, with respect to prevailing wage and overtime
 
 3 citations under section 104-2, each employee and each project
 
 4 shall be considered a separate offense."
 
 5      SECTION 2.  Section 104-25, Hawaii Revised Statutes, is
 
 6 amended to read as follows:
 
 7      "104-25  Suspension.  [(a)  The director shall suspend a
 
 8 person or firm from doing any work on any public work of a
 
 9 governmental contracting agency for a period of three years if
 
10 the person or firm:
 
11      (1)  Commits a third violation of this chapter within two
 
12           years from the date of the first violation;
 
13      (2)  Fails to make the person's or firm's employees whole
 
14           for wages or overtime pay due under the contract; or
 
15      (3)  Fails to pay any penalty assessed.]  (a)  The director
 
16 shall suspend a person or firm as follows:
 
17      (1)  For a first or second violation, if a person or firm
 
18           fails to pay wages found due, any penalty assessed, or
 
19           both, the person or firm shall be immediately suspended
 
20           from doing any work on any public work of a
 
21           governmental contracting agency until all wages and
 
22           penalties are paid in full; and
 
23      (2)  For a third violation, the suspension shall be as
 

 
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 1           prescribed in section 104-24(c); provided that, if the
 
 2           person or firm continues to violate this chapter or
 
 3           fails to pay wages found due or any penalty assessed,
 
 4           or both, then the contractor shall immediately be
 
 5           suspended from doing any work on any public work of a
 
 6           governmental contracting agency for a mandatory
 
 7           three-year period.  If after the three-year suspension
 
 8           period the wages found due or penalties assessed are
 
 9           still unpaid, the suspension shall remain in force
 
10           until payment is made in full.
 
11      (b)  The director shall immediately notify the comptroller
 
12 and the auditor or director of finance of the county of any
 
13 suspension order.
 
14      [(c)  On application by the suspended person or firm, no
 
15 less than one year from the date of suspension, the director,
 
16 after a hearing, may shorten the term of suspension; provided
 
17 that the contractor or subcontractor has made the contractor's or
 
18 subcontractor's employees whole for wages or overtime pay due and
 
19 has paid to the director all penalties assessed under this
 
20 chapter.
 
21      (d)] (c)  No contract shall be awarded to the person or firm
 
22 so suspended or to any firm, corporation, partnership, or
 
23 association in which the person or firm has an interest, direct
 

 
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 1 or indirect, until three years have elapsed from the date of
 
 2 suspension, unless the period of suspension is reduced as herein
 
 3 provided.  Any contract awarded in violation of this subsection
 
 4 shall be void."
 
 5      SECTION 3.  Section 387-12, Hawaii Revised Statutes, is
 
 6 amended by amending subsection (c) to read as follows:
 
 7      "(c)  Collection suits; attorney's fee; assignments; relief
 
 8 from costs.  Action to recover such liability may be maintained
 
 9 in any court of competent jurisdiction by any one or more
 
10 employees for and in behalf of oneself or themselves and other
 
11 employees similarly situated, or the employee or employees may
 
12 designate an agent or representative to maintain action for and
 
13 in behalf of all employees similarly situated. The court in such
 
14 action shall, in addition to any judgment awarded to the
 
15 plaintiff or plaintiffs, in the event the plaintiff or plaintiffs
 
16 prevail, allow a reasonable attorney's fee to be paid by the
 
17 defendant[,] and costs of the action.  At the request of any
 
18 person paid less than the amount to which the person is entitled
 
19 under this chapter, the director [of labor and industrial
 
20 relations] may take an assignment in trust for the assigning
 
21 employee of the full amount to which the employee is entitled
 
22 under this subsection and may bring any legal action necessary to
 
23 collect the claim, and the employer shall be required to pay the
 

 
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 1 costs and such reasonable attorney's fees as may be allowed by
 
 2 the court in the event the director prevails.  The director shall
 
 3 not be required to pay the filing fee[,] or other costs[,] in
 
 4 connection with such action[.], including the opposing party's
 
 5 attorney's fees and costs.  The director, in case of suit, may
 
 6 join various claimants against the same employer in one cause of
 
 7 action.  The right provided by this [paragraph] subsection to
 
 8 bring an action by or on behalf of any employee, and the right of
 
 9 any employee to become a party plaintiff to any such action,
 
10 shall terminate upon the filing of a complaint by the director in
 
11 an action in which restraint is sought of any further delay in
 
12 the payment of unpaid minimum wages, or the amount of unpaid
 
13 overtime compensation owing to the employee under section 387-2
 
14 or 387-3 by an employer liable therefor under this section."
 
15      SECTION 4.  Section 388-11, Hawaii Revised Statutes, is
 
16 amended by amending subsection (c) to read as follows:
 
17      "(c)  The court in any action brought under this section
 
18 shall, in addition to any judgment awarded to the plaintiff or
 
19 plaintiffs, allow interest of six per cent per year from the date
 
20 the wages were due, costs of action, including costs of fees of
 
21 any nature, and reasonable attorney's fees, to be paid by the
 
22 defendant.  The director shall not be required to [pay]:
 
23      (1)  Pay the filing fee or other costs or fees of any
 

 
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 1           nature, including the opposing party's fees and costs;
 
 2           or [to file]
 
 3      (2)  File a bond or other security of any nature, in
 
 4           connection with such action [or], with proceedings
 
 5           supplementary thereto, or as a condition precedent to
 
 6           the availability to the director of any process in aid
 
 7           of such action or proceedings.  The director may join
 
 8           various claimants in one preferred claim or lien, and
 
 9           in case of suit join them in one cause of action."
 
10      SECTION 5.  Statutory material to be repealed is bracketed.
 
11 New statutory material is underscored.
 
12      SECTION 6.  This Act shall take effect upon its approval.