Report Title:

Labor; Family Leave

Description:

Establishes a family leave benefits insurance program to provide income support to those on family leave.

THE SENATE

S.B. NO.

772

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to family leave benefits insurance.

 

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

SECTION 1. The legislature finds that:

(1) Although family leave laws have assisted employees to balance the demands of the workplace with their family responsibilities, more needs to be done to achieve the goals of workforce stability and economic security;

(2) Many employees do not have access to family leave, and those who do may not be in a financial position to take family leave that is unpaid;

(3) Employer-paid benefits meet only a relatively small part of this need; and

(4) The establishment of family leave benefits will reduce the impact on state income-support programs by increasing the ability of workers to recover from illness or provide caregiving services for family members while maintaining an employment relationship.

The purpose of this Act is to establish a family leave benefits insurance program to provide limited income support for a reasonable period while an employee is away from work: on family leave, a policy which protects the health and safety of residents and strengthens the economy.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"CHAPTER

FAMILY LEAVE BENEFITS INSURANCE

§   -1 Definitions. As used in this chapter unless otherwise noted:

"Application year" means the twelve-month period beginning on the first day of the calendar week in which an employee files an application for family leave benefits and, thereafter, the twelve-month period beginning with the first day of the calendar week in which the employee files a subsequent application for family leave benefits after the expiration of the employee’s last preceding application year.

"Child" means a person who is a biological, adopted, foster child, stepchild, legal ward, or child of a person standing in loco parentis, and who is:

(1) Under eighteen years of age; or

(2) Eighteen years of age or older and incapable of self-care because of a mental or physical disability.

"Department" means the department of labor and industrial relations.

"Employer" shall have the same meaning as in chapter 386.

"Employment" shall have the same meaning as in chapter 386.

"Family leave" means leave taken by an employee who is temporarily disabled and unavailable to work because:

(1) The employee has to care for a newborn, newly-adopted, or foster child (and leave is completed within twelve months after the birth or the placement of the child or foster care or adoption);

(2) The employee has to care for a family member who has a serious health condition; or

(3) The employee has a serious health condition, making the employee unable to perform the functions of the employee’s position.

"Family member" means a child, spouse, or the parent of the employee or employee’s spouse.

"Health care provider" shall have the same meaning as in chapter 386.

"Parent" means a biological or adoptive parent, a stepparent, or a person who stood in loco parentis to an employee or an employee’s spouse.

"Premium" means the money payments required by this chapter to be made to the department for the family leave benefits insurance special fund.

"Qualifying year" means the first four of the last five completed calendar quarters or the last four completed calendar quarters immediately preceding the first day of the employee’s application year.

"Serious health condition" means an illness, injury, impairment, or physical or mental condition that involves inpatient care in a hospital, hospice, or residential medical care facility, or continuing treatment by a health care provider.

§   -2 Application for family leave benefits. (a) The department shall establish and administer the family leave benefits insurance special fund, and establish procedures and forms for filing benefit claims. The department shall notify the employer within two business days of a claim being filed.

(b) The department may require that a claim for benefits under this chapter be supported by a certification issued by a health care provider who is providing care to the employee or the employee’s family member, as applicable.

(c) Information contained in the files and records pertaining to an employee under this chapter is confidential and not open to public inspection, other than to public employees in the performance of their official duties. However, the employee, or an authorized representative of an employee, may review the records or receive specific information from the records on the presentation of the signed authorization of the employee. An employer or the employer’s duly authorized representative may review the records of an employee employed by the employer in connection with a pending claim. At the department’s discretion, other persons may review records when those persons are rendering assistance to the department at any stage of the proceedings on any matter pertaining to the administration of this chapter.

§   -3 Eligibility for family leave benefits. (a) Family leave benefits are payable to an employee during a period in which the employee is on unpaid family leave if the employee:

(1) Files a claim for benefits as required by rules adopted by the department;

(2) Has been employed for at least five hundred twenty hours during the employee’s qualifying year;

(3) Establishes an application year. An application year may not be established if the qualifying year includes hours worked before establishment of a previous application year; and

(4) Documents that the employee has provided the employer from whom family leave is to be taken with written notice of the employee’s intention to take family leave as follows:

(A) If the necessity for family leave was foreseeable based on an expected-birth, placement or treatment, notice was given at least thirty days before the family leave was to begin, stating the anticipated starting date and ending date of the family leave;

(B) If the date of birth, placement or treatment requiring family leave will begin in less than thirty days, as much notice as practicable was given;

(C) In the case of medical treatment, the employee made reasonable efforts to schedule the treatment so as not to unduly disrupt the operations of the employer, subject to the approval of the health care provider of the employee or the employee’s ill family member; and

(5) Discloses whether or not the employee owes child support obligations.

§   -4 Disqualification from benefits. (a) An employee is disqualified from family leave insurance benefits beginning with the first day of the calendar week, and continuing for the next fifty-two consecutive weeks, if the employee:

(1) Wilfully made a false statement or misrepresentation regarding a material fact, or wilfully failed to report a material fact, to obtain benefits under this chapter; or

(2) Seeks benefits based on a wilful and intentional self-inflicted serious health condition or a serious health condition resulting from the employee’s perpetration of a felony.

(b) Benefits are not payable for any weeks in which compensation is payable to the employee under chapter 386 or the federal workers’ compensation law.

(c) An employee is not disqualified for benefits for any week when there is a strike or lockout at the factory, establishment, or other premises at which the employee is or was last employed.

§   -5 Duration and amount of benefits. (a) In an application year, family leave benefits are payable for a maximum of twelve weeks.

(b) The first payment of benefits shall be made to an employee within two weeks after the claim is filed or the family leave began, whichever is later. Subsequent payments shall be made twice a month thereafter.

(c) Family leave benefits shall be paid as follows:

(1) For family leave beginning before July 1, 2003, benefits shall be $250 per week for an employee who at the time of beginning family leave was regularly working forty hours or more per week or a prorated amount based on the weekly hours regularly worked for an employee regularly working less than forty hours per week;

(2) By June 30, 2003, and by each subsequent June 30, the department shall calculate, to the nearest dollar, an adjusted maximum benefit to account for inflation using the consumer price index for urban wage earners and clerical workers, CPI-W, published by the United States Department of Labor, or a successor index. The adjusted maximum benefit shall take effect for family leave beginning after the relevant June 30;

(3) If an employee was regularly working forty hours a week or more per week at the beginning of family leave, and during family leave is working less than forty hours but at least eight hours a week, the employee’s weekly payment shall be .025 times the maximum benefit times the number of hours of family leave taken in the week. Benefits are not payable for less than eight hours of family leave taken in a week;

(4) If an employee discloses that the employee owes child support obligations and the department determines that the employee is eligible for benefits, the department shall notify the child support enforcement agency; and

(5) If an employee elects to have federal income tax deducted and withheld from benefits, the department shall deduct and withhold the amount required by the federal Internal Revenue Code or regulations of the Internal Revenue Service.

(d) If family leave benefits are paid erroneously or as a result of fraud, or if a claim for benefits is rejected after benefits are paid, the department shall seek repayment of benefits from the recipient.

(e) If an employee dies before receiving payment of benefits, the payment shall be made by the department to the surviving spouse or the child or children if there is no surviving spouse. If there is no surviving spouse and no child or children, the payment shall be made and distributed consistent with the terms of the decedent’s will or, if the decedent dies intestate, consistent with chapter 560.

§   -6 Existing benefits not diminished. (a) Nothing in this chapter shall be construed to limit an employee’s right to leave from employment under other laws or employer policy.

(b) If an employer provides paid family leave or an employee is covered by disability insurance, the employee may elect whether first to use the paid family leave or to receive temporary disability benefits. An employee may not be required to use one’s paid family leave to which one is entitled before receiving benefits under this chapter.

(c) An employer may require that family leave for which an employee is receiving or received benefits under this chapter be taken concurrently with leave under the federal Family and Medical Leave Act of 1993, or other applicable federal, state, or county law, except that:

(1) Family leave taken for sickness or temporary disability because of pregnancy or childbirth is in addition to leave under the federal Family and Medical Leave Act of 1993, or other applicable federal, state, or county law;

(2) Family leave during which the employee is receiving or received benefits under this chapter is in addition to leave from employment during which benefits are paid under chapter 386 or the federal workers’ compensation law and that is designated as leave under the federal Family and Medical Leave Act of 1993; or

(3) If an employer requires that family leave for which an employee is receiving or received benefits under this chapter be taken concurrently with leave under the federal Family and Medical Leave Act, or other applicable federal, state, or county law, the employer shall give all employees written notice of the requirement.

(d) The right of an employee who receives benefits under this chapter to be returned to the employee’s position at the established ending date of family leave is governed by chapter 398. However, this entitlement is supplementary to a federal, state, or county law establishing a similar entitlement, and if a federal, state, or county law applying to the employee establishes a more favorable right to return to the employee’s position than is established under this section, the application of that federal, state, or county law is not affected by this section.

(e) An employee who has received benefits under this chapter shall not lose any employment benefit, including seniority or pension rights accrued before the date that family leave commenced. However, this chapter does not entitle an employee to accrue employment benefits during a period of family leave or to a right, benefit, or position of employment other than a right, benefit, or position to which the employee would have been entitled had the employee not taken family leave.

(f) This chapter shall not be construed to diminish an employer’s obligation to comply with a collective bargaining agreement or an employment benefit program or plan that provides greater benefits to employees than family leave insurance benefits provided under this chapter.

(g) An agreement by an employee to waive the employee’s rights under this chapter is void as against public policy. The benefits provided to employees under this chapter may not be diminished by a collective bargaining agreement or an employment benefit program or plan entered into or renewed after the effective date of this section.

§   -7 Election of coverage. (a) An employer of employees not covered by this chapter or a self-employed person may elect coverage under the family leave benefits insurance program for an initial period of not less than three years or a subsequent period of not less than one year immediately following another period of coverage. The employer or self-employed person shall file a notice of election in writing with the department. The election becomes effective on the date of filing the notice.

(b) An employer or self-employed person who has elected coverage may withdraw from coverage within thirty days after the end of the three-year period of coverage, or at such other times as the department may prescribe by rule, by filing written notice with the department. The withdrawal shall take effect not sooner than thirty days after the filing of the notice.

(c) The department may cancel elective coverage if the employer or self-employed person fails to provide required payments or reports. The department may collect due and unpaid premiums and may levy an additional premium for the remainder of the period of coverage. The cancellation shall be effective no later than thirty days from the date of the notice in writing advising the employer or self-employed person of the cancellation.

§   -8 Records and reports. (a) The department shall specify the forms and times for employers to provide reports, furnish information, and remit premiums. If the employer is a temporary services agency that provides employees on a temporary basis to its customers, the temporary services agency is considered the employer for purposes of this section. However, if the temporary services agency fails to remit the required premiums, the customer to whom the employees were provided is liable for paying the premiums.

(b) An employer shall keep at the employer’s place of business a record of employment from which the information needed by the department for purposes of this chapter may be obtained. This record shall at all times be open to the inspection of the department pursuant to rules adopted by the department.

(c) Information obtained from employer records under this chapter is confidential and not open to public inspection, other than to public employees in the performance of their official duties. However, an interested party shall be supplied with information from employer records to the extent necessary for the proper presentation of the case in question. An employer may authorize inspection of its records by written consent.

§   -9 Disposal of business. (a) When an employer quits business, or sells out, exchanges, or otherwise disposes of the business or stock of goods, any premium payable under this chapter is immediately due and payable, and the employer, within ten days thereafter, shall make a return and pay the premium due. Any person who becomes a successor to the business is liable for the full amount of the premium and shall withhold from the purchase price a sum sufficient to pay any premium due from the employer until the employer produces a receipt from the department showing payment in full of any premium due or a certificate that no premium is due and, if the premium is not paid by the employer within ten days from the date of the sale, exchange, or disposal, the successor is liable for the payment of the full amount of premium. The successor’s payment thereof is, to the extent thereof, a payment upon the purchase price, and if the payment is greater in amount than the purchase price, the amount of the difference is a debt due the successor from the employer.

(b) A successor is not liable for any premium due from the person from whom the successor has acquired a business or stock of goods if the successor gives written notice to the department of the acquisition and no assessment is issued by the department within one hundred eighty days of receipt of the notice against the former operator of the business and a copy thereof mailed to the successor.

§   -10 Family leave benefits insurance special fund. (a) There is created in the state treasury, the family leave benefits insurance special fund to be administered by the department. All receipts from the premium or penalties imposed under this chapter shall be deposited into the special fund. Expenditures from the special fund may be used only for the purposes of the family leave benefits insurance program.

(b) Each employer shall retain from the earnings of each employee a premium of one cent per hour worked, up to a maximum of forty hours per week. The employer shall match the amount retained by an equal amount, and the money retained shall be paid to the department in the manner and at such intervals as the department directs for deposit in the family leave insurance special fund.

(c) The department shall adjust the amount of the premium from time to time to ensure that the amount is the lowest rate necessary to pay family leave benefits and administrative costs, and maintain actuarial solvency in accordance with recognized insurance principles.

(d) The department may adopt rules to permit an employee with multiple employers and the employee’s employers to petition for refunds or credits of amounts paid to the department for hours in excess of forty hours per week worked by the employee.

§   -11 Taxation of family leave benefits. The department shall advise an employee filing a new claim for family leave benefits, at the time of filing such claim, that:

(1) Benefits are subject to federal income tax;

(2) Requirements exist pertaining to estimated tax payments;

(3) The employee may elect to have federal income tax deducted and withheld from the employee’s payment of benefits at the amount required by the Internal Revenue Code and regulations of the Internal Revenue Service; and

(4) The employee is permitted to change a previously elected withholding status.

§   -12 No discrimination against claimants. An employer, temporary services agency, employment agency, employee organization, or other person may not discharge, expel, or otherwise discriminate against a person because the person has filed or communicated to the employer an intent to file a claim, a complaint, or an appeal, or has testified or is about to testify or has assisted in any proceeding under this chapter.

§   -13 No entitlement. (a) Family leave benefits are payable under this chapter only to the extent that moneys are available in the family leave benefits insurance special fund for this purpose. Neither the State nor the department is liable for any amount in excess of these limits.

(b) This chapter does not create a continuing entitlement or contractual right. There is no vested private right of any kind against amendment or repeal of this chapter.

§   -14 Rules. The department may adopt rules under chapter 91 as necessary to implement this chapter. In adopting rules, the department shall maintain consistency with the rules adopted to implement the federal Family and Medical Leave Act of 1993, to the extent such rules are not in conflict with this chapter."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $         or so much thereof as may be necessary for fiscal year 2003-2004 to be deposited into the family leave benefits insurance special fund created under this Act.

The sum appropriated shall be expended by the department of labor and industrial relations for the purposes of this Act.

SECTION 4. There is appropriated out of the family leave benefits insurance special fund the sum of $         or so much thereof as may be necessary for fiscal year 2003-2004 to implement the purposes of this Act.

The sum appropriated shall be expended by the department of labor and industrial relations for the purposes of this Act.

SECTION 5. This Act shall take effect on July 1, 2003.

INTRODUCED BY:

_____________________________