THE SENATE

S.B. NO.

3047

TWENTY-NINTH LEGISLATURE, 2018

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO FAMILY AND MEDICAL LEAVE.

 

 

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

 


SECTION 1. The legislature recognizes the immense benefits of paid family and medical leave programs to individuals, families, and communities. Paid family and medical leave provides continuity and stability in the labor workforce, strengthens employee retention and participation in the workplace, and enhances job opportunities in the workplace. Paid family and medical leave also enables employees to take time off to attend to certain life events, including medical emergencies for their own illnesses or family members' illnesses without undue financial burden.

According to the National Conference of State Legislatures, California, New Jersey, and Rhode Island currently offer paid family and medical leave. New York's paid family leave benefits law will take effect in 2018, and Washington's paid family and medical leave law will take effect in 2020. The legislature finds that paid family and medical leave laws, as well as paid sick leave laws and school or parental leave laws in cities and states, show that policymakers, businesses, and communities recognize the positive effects of these laws.

The legislature finds that it is in the public interest to enact paid family and medical leave legislation that provides reasonable paid family leave for the birth or placement of a child with an employee, for the care of a family member who has a serious health condition, and for a qualifying exigency under the federal Family and Medical Leave Act, and to provide reasonable paid medical leave for an employee's own serious health condition.

The purpose of this Act is to establish a system of family and medical leave insurance in the State that makes it possible for working individuals to take paid leave for family care and medical reasons.

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

"CHAPTER    

HAWAII PAID FAMILY AND MEDICAL LEAVE

PART I. SHORT TITLE, PROGRAM, CONSTRUCTION, AND DEFINITIONS

   -1 Short title. This chapter shall be known and cited as the Hawaii Paid Family and Medical Leave Act.

   -2 Definitions. As used in this chapter, unless the context clearly requires otherwise:

"Child" includes a biological, adopted, or foster child, a stepchild, or a child to whom the employee stands in loco parentis, is a legal guardian of, or is a de facto parent of, regardless of age or dependency status.

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

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

"Employee" means any individual in the employment of an employer. "Employee" does not include employees of the United States.

"Employee's average weekly wage" means the quotient derived by dividing the employee's total wages during the two quarters of the employee's qualifying period in which total wages were highest by twenty-six. If the result is not a multiple of $1, the department shall round the result to the next lower multiple of $1.

"Employer" means any individual or type of organization, including the State, any of its political subdivisions, any instrumentality of the State or its political subdivisions, any partnership, association, trust, estate, joint stock company, insurance company, limited liability company, or corporation, whether domestic or foreign, or the receiver, trustee in bankruptcy, trustee, or the legal representative of a deceased person that has any person in employment in the State but does not include the United States.

"Employment" has the same meaning as defined in section 383-2.

"Employment benefits" means all benefits, other than salary or wages, provided or made available to employees by an employer, including group life insurance, health insurance, disability insurance, sick leave, annual leave, educational benefits, and pensions except benefits that are provided by a practice or written policy of an employer or through an employee benefit plan as defined in 29 United States Code section 1002(3).

"Family leave" means leave taken by an employee from work:

(1) To participate in providing care, including physical or psychological care, for a family member of the employee made necessary by a serious health condition of the family member;

(2) To bond with the employee's child during the first twelve months after the child's birth, or the first twelve months after the placement of a child under the age of eighteen with the employee; or

(3) Because of any qualifying exigency as permitted under the federal Family and Medical Leave Act, 29 United States Code section 2612(a)(1)(e) and 29 Code of Federal Regulations section 825.126(a)(1) through (8) for family members of members of the United States Armed Forces.

"Family member" means a child, grandchild, grandparent, parent, sibling, or spouse of an employee.

"Grandchild" means a child of the employee's child.

"Grandparent" means a parent of the employee's parent.

"Health care provider" means:

(1) A person licensed as a physician, osteopathic physician, or surgeon under chapter 453;

(2) A person licensed as an advanced practice registered nurse under chapter 457; or

(3) Any other person determined by the director to be capable of providing health care services.

"Medical leave" means leave taken by an employee from work made necessary by the employee's own serious health condition.

"Parent" means the biological, adoptive, de facto, or foster parent, stepparent, or legal guardian of an employee or the employee's spouse, or an individual who stood in loco parentis to an employee when the employee was a child.

"Period of incapacity" means the period in which an individual is unable to work, attend school, or perform other regular daily activities because of a serious health condition, treatment of that condition, recovery from the condition or treatment, or subsequent treatment in connection with inpatient care.

"Premium" or "premiums" means the payments required by section    -29 and paid to the department for deposit in the family and medical leave insurance fund under section    -12.

"Qualifying exigency" means a qualifying exigency as determined by the United States Secretary of Labor arising out of the fact that an employee's spouse, son, daughter, or parent is on covered active duty or has been notified of an impending call or order to covered active duty in the armed forces of the United States.

"Qualifying period" means the first four of the last five completed calendar quarters or, if eligibility is not established, the last four completed calendar quarters immediately preceding the application for leave.

"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; a period of incapacity; or continuing treatment by a health care provider.

"State average weekly wage" means the amount determined by the director under section 383-22 as the average weekly wage.

"Typical workweek hours" means:

(1) For an hourly employee, the average number of hours worked per week by the employee since the beginning of the qualifying period; and

(2) Forty hours for a salaried employee, regardless of the number of hours the salaried employee typically works.

"Wage" means the remuneration paid or payable by one or more employers to an individual for employment during the individual's base year.

   -3 Family and medical leave program; establishment; program administration. (a) The department shall establish and administer the family and medical leave program and pay family and medical leave benefits as specified in this chapter.

(b) The department shall establish procedures and forms for filing applications for benefits under this chapter. The department shall notify the relevant employer within five business days of the filing of an application.

   -4 Family and medical leave data collection system. (a) There is established a family and medical leave data collection system to:

(1) Ensure that all employees covered by the benefits of this chapter are informed of their rights under this chapter and their names are entered into the database upon application for benefits;

(2) Collect pertinent data, consistent with state and federal privacy statutes, on the use and potential demand for family and medical leave benefits for both public and private-sector employees, including information on who and under what circumstances employees are using family and medical leave benefits, the nature and duration of family members' needs, and the adequacy of current family and medical leave benefits;

(3) Provide analysis of the data to assist in the development and implementation of an efficient system of paid family and medical leave for employees in Hawaii; and

(4) Provide analysis of data to assist in the future development of caregiver services for senior citizens in Hawaii.

(b) The department shall work with the University of Hawaii center on aging to create a web-based data system with the following capabilities:

(1) The capacity for all employees seeking family and medical leave benefits under this chapter to log into the data system and enter pertinent data on the circumstances and need for family and medical leave benefits;

(2) The ability to secure confidential information, consistent with state and federal privacy statutes, available only in aggregate form for managers and analysts of the data system;

(3) The ability of the employee to print out a simple form to be submitted to the employer certifying that required data has been entered;

(4) The ability of data managers and analysts to manipulate and query the database to achieve the purpose of this chapter;

(5) A back-up paper system that can be used when computer access or printing is unavailable; and

(6) A user-friendly format that can be translated into multiple languages for employees.

(c) The state auditor shall be provided access to the database and shall prepare annual reports to the legislature, the department, and the University of Hawaii center on aging.

   -5 Advisory committee. (a) The director shall appoint an advisory committee to review issues and topics of interest related to this chapter.

(b) The advisory committee shall comprise ten members, as follows:

(1) Four members representing employees' interests in family and medical leave, each of whom shall be appointed from a list of at least four names submitted by a recognized statewide organization of employees;

(2) Four members representing employers, each of whom shall be appointed from a list of at least four names submitted by a recognized statewide organization of employers; and

(3) Two ex officio members, without a vote, one of whom shall represent the department and the other of whom shall be the ombuds for the family and medical leave program.

The member representing the department shall be the chair.

(c) The advisory committee shall provide comment on rule making, policies, implementation of this chapter, utilization of benefits, and other initiatives, and study issues the advisory committee determines to require its consideration.

(d) The members of the advisory committee shall serve without compensation but shall be reimbursed for expenses, including travel expenses, necessary for the performance of their duties.

(e) The advisory committee may utilize personnel and facilities of the department as it needs, without charge. All expenses of the committee shall be paid by the family and medical leave insurance fund.

   -6 Ombuds. (a) The director shall establish an ombuds office for family and medical leave within the department. An ombuds shall be appointed by the governor and report directly to the director. The ombuds shall be available to all employers and employees in the State.

(b) The person appointed ombuds shall hold office for a term of six years and shall continue to hold office until reappointed or until the ombud's successor is appointed. The governor may remove the ombuds only for neglect of duty, misconduct, or inability to perform duties. Any vacancy shall be filled by similar appointment for the remainder of the unexpired term.

(c) The ombuds shall:

(1) Offer and provide information on family and medical leave to employers and employees;

(2) Act as an advocate for employers and employees in their dealings with the department;

(3) Identify, investigate, and facilitate resolution of disputes and complaints under this chapter; and

(4) Refer complaints to the department when appropriate.

(d) The ombuds may conduct surveys of employees. Survey questions and results are confidential and shall not be disclosed.

(e) The ombuds is not liable for the good faith performance of responsibilities under this chapter.

   -7 Outreach program. The department shall develop and implement an outreach program to ensure that employees who may be qualified to receive family and medical leave benefits under this chapter are made aware of these benefits. Outreach information shall explain, in an easy to understand format, eligibility requirements, the application process, weekly benefit amounts, maximum benefits payable, notice and certification requirements, reinstatement and nondiscrimination rights, confidentiality, voluntary plans, and the relationship between employment protection, leave from employment, and wage replacement benefits under this chapter and other laws, collective bargaining agreements, and employer policies.

   -8 Information sharing; inspection; audit. (a) The department shall use information sharing and integration technology to facilitate the disclosure of relevant information or records by the department, so long as an employee consents to the disclosure as required under section    -19.

(b) Information contained in the files and records pertaining to an employee under this chapter are confidential and not open to public inspection, other than to public employees in the performance of their official duties; provided that 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 application. At the department's discretion, other persons may review records when such persons are rendering assistance to the department at any stage of the proceedings on any matter pertaining to the administration of this chapter.

(c) The department is authorized to inspect and audit employer files and records relating to the family and medical leave program, including employer voluntary plans.

   -9 Reports to legislature. Beginning December 1,     , and annually thereafter, the department shall report to the legislature on the entire program, including:

(1) Projected and actual program participation;

(2) Premium rates;

(3) Fund balances;

(4) Benefits paid;

(5) Demographic information on program participants, including income, gender, race, ethnicity, geographic distribution by county and legislative district, and employment sector;

(6) Costs of providing benefits;

(7) Elective coverage participation;

(8) Voluntary plan participation; and

(9) Outreach efforts.

   -10 Rules. The director shall adopt rules pursuant to chapter 91 as necessary to implement this chapter.

PART II. FAMILY AND MEDICAL LEAVE INSURANCE; ELIGIBILITY, FUNDING, AND EMPLOYEE AND EMPLOYER RIGHTS

   -11 Eligibility for leave; serious health condition. (a) An employee who meets the eligibility criteria established by this section and section    -16 may receive family or medical leave benefits pursuant to this chapter when the employee is absent from work:

(1) Following the birth or placement for adoption of a child;

(2) To provide care for a family member who has a serious health condition;

(3) Because of the employee's own serious health condition; or

(4) Because of a qualifying exigency.

(b) For purposes of this chapter, a serious health condition for which an employee may receive benefits shall be:

(1) A period of incapacity of more than three consecutive, full calendar days and any subsequent treatment or period of incapacity relating to the same condition that also involves:

(A) In-person treatment two or more times within thirty days of the first day of incapacity where the first in-person treatment occurs within the first seven days following the first day of incapacity, unless circumstances beyond the employee's control prevent adherence to this requirement, by a health care provider, a nurse or physician's assistant under direct supervision of a health care provider, or a provider of health care services under orders of or on referral by a health care provider, as determined to be necessary by the health care provider; or

(B) In-person treatment by a health care provider on at least one occasion within the first seven days following the first day of incapacity which results in a regimen of continuing treatment under the supervision of the health care provider;

(2) Any period of incapacity due to pregnancy or for prenatal care;

(3) Any period of incapacity or treatment for such incapacity due to a chronic serious health condition which:

(A) Requires periodic visits, defined as at least twice a year, for in-person treatment by a health care provider, or by a nurse under direct supervision of a health care provider;

(B) Continues over an extended period of time, including recurring episodes of a single underlying condition; and

(C) May cause episodic periods rather than a continuing period of incapacity;

(4) A period of incapacity which is permanent or long term due to a condition for which treatment may not be effective and for which the employee or family member shall be under the continuing supervision of, but need not be receiving active treatment by, a health care provider as determined by the health care provider; or

(5) Any period, including any period of recovery from treatments, in which the employee or family member receives multiple treatments, by a health care provider or by a provider of health care services under orders of or on referral by a health care provider, either for:

(A) Restorative surgery after an accident or other injury; or

(B) A condition that would likely result in a period of incapacity of more than three consecutive, full calendar days in the absence of medical treatment.

(c) Treatment for purposes of this section includes examinations to determine whether a serious health condition exists and evaluations of the condition but treatment does not include routine physical examinations, eye examinations, or dental examinations. Continuing treatment for the purposes of this section includes a course of prescription medication or therapy requiring special equipment to resolve or alleviate the health condition. Continuing treatment that includes only taking over-the-counter medications, bed rest, drinking fluids, exercise, or other similar activities that can be initiated without a visit to a health care provider, is not, by itself, sufficient to constitute continuing treatment for purposes of this section.

(d) Conditions for which only cosmetic treatments are administered are not serious health conditions unless inpatient hospital care is required or unless complications develop that independently constitute a serious health condition. Restorative dental or plastic surgery after an injury or treatment for another serious health condition are serious health conditions if all other requirements of this section are met.

(e) Mental illness is a serious health condition if all other requirements of this section are met.

(f) Substance abuse is a serious health condition if all other requirements of this section are met; provided that leave may only be taken for treatment for substance abuse by a health care provider or by a licensed substance abuse treatment provider. An employee's absence because of the employee's use of a substance, rather than for treatment, does not qualify for leave benefits under this chapter. Leave taken by an employee to pursue treatment for substance abuse shall not preclude an employer from taking employment action against the employee; provided that the employer has an established policy, applied in a nondiscriminatory manner and communicated to all employees, that allows or requires an employee to be terminated for substance abuse. An employer shall not take employment action against an employee solely because the employee has exercised the right to take medical leave to obtain treatment. An employer shall not take employment action against an employee who is providing care for a covered family member receiving treatment for substance abuse.

(g) Periods of incapacity under subsection (b)(2) and (3) are serious health conditions for purposes of this chapter even if the employee or the family member does not receive treatment from a health care provider during the period and regardless of the duration of the period.

   -12 Family and medical leave insurance fund. (a) There is created in the state treasury the family and medical leave insurance fund. All receipts from premiums imposed under this chapter shall be deposited in the fund. Expenditures from the fund shall be used only for the purposes of the family and medical leave program. Only the director or the director's designee may authorize expenditures from the fund. The fund shall be subject to the allotment procedures under chapter 37. An appropriation by the legislature shall be required for administrative expenses, but not for benefit payments or transfers in accordance with subsection (c).

(b) Money deposited in the fund shall remain a part of the fund until expended pursuant to the requirements of this chapter or transferred in accordance with subsection (c). The director shall maintain a separate record of the deposit, obligation, expenditure, and return of funds so deposited. Any funds deposited in the fund which will not be obligated or expended within the period specified by the relevant legislative appropriation from the fund or which remain unobligated at the end of each fiscal year shall remain in the family and medical leave insurance fund.

(c) Money shall be transferred from the family and medical leave insurance fund and deposited in the unemployment compensation trust fund solely for the repayment of benefits not charged to employers subject to section 383-62(b), (c), or (d) for a temporary employee employed for twenty weeks or less for purposes of replacing a permanent employee who is absent due to family or medical leave; provided that the temporary employee's employment is terminated due to the return to employment of the permanent employee. The director shall direct the transfer, which shall occur on or before June 30 of the year in which the temporary employment is terminated.

(d) Money transferred as provided in subsection (c) for the repayment of benefits not charged to employers shall be deposited in the unemployment compensation trust fund and shall remain a part of the unemployment compensation trust fund until expended. The director shall maintain a separate record of the deposit, obligation, expenditure, and return of funds so deposited. Any funds deposited in the unemployment compensation trust fund pursuant to this subsection which are not obligated or expended at the end of each fiscal year shall remain in the unemployment compensation trust fund.

   -13 Family and medical leave enforcement fund. There is created in the state treasury the family and medical leave enforcement fund. Any overpayments, penalties, or interest collected under this chapter shall be deposited into the family and medical leave enforcement fund and shall be used only for the purposes of administering and enforcing this chapter. Only the director may authorize expenditures from the family and medical leave enforcement fund. The fund shall be subject to allotment procedures under chapter 37; provided that an appropriation shall not be required for expenditures.

   -14 Uncollectible accounts. The director may charge off as uncollectible and no longer an asset of the family and medical leave insurance fund or the family and medical leave enforcement fund, as applicable, any delinquent premiums, interest, penalties, credits, or benefit overpayment liabilities if the director is satisfied that there are no cost-effective means of collecting the premiums, interest, penalties, credits, or benefit overpayment liabilities.

   -15 Benefit; amount and duration. (a) Beginning January 1,     , family and medical leave shall be available and benefits shall be payable to qualified employees pursuant to this section. Benefits shall become payable after a waiting period consisting of the first seven calendar days of leave; provided that no waiting period shall be required for leave for the birth or placement of a child. Benefits shall continue up to the maximum period specified in subsection (c), subject to the maximum and minimum weekly benefits, duration, and other conditions and limitations established in this chapter. Successive periods of family and medical leave caused by the same or related injury or sickness shall be deemed a single period of family and medical leave only if separated by less than four months.

(b) The weekly benefit amount paid shall be prorated by the percentage of hours on leave compared to the number of hours provided as the typical workweek hours; provided that:

(1) The benefit amount, if not a multiple of $1, shall be reduced to the next lower multiple of $1;

(2) Hours on leave claimed for benefits under this chapter, if not a multiple of one hour, shall be reduced to the next lower multiple of one hour; and

(3) The minimum claim duration payment shall be for eight consecutive hours of leave.

(c) The maximum duration of paid family leave shall not exceed twelve times the typical workweek hours during a period of fifty-two consecutive calendar weeks. The maximum duration of paid medical leave shall not exceed twelve times the typical workweek hours during a period of fifty-two consecutive calendar weeks. Leave may be extended an additional two times the typical workweek hours if the employee experiences a serious health condition with a pregnancy that results in incapacity.

An employee shall not be entitled to paid family and medical leave benefits under this chapter in excess of a combined total of sixteen times the typical workweek hours; provided that if the employee experiences a serious health condition with a pregnancy that results in incapacity, the employee shall be entitled to a combined total of family and medical leave benefits not in excess of eighteen times the typical workweek hours.

(d) The weekly family and medical leave benefit amount shall be determined as follows:

(1) If the employee's average weekly wage is fifty per cent or less of the state average weekly wage, the employee's weekly benefit shall be ninety per cent of the employee's average weekly wage; or

(2) If the employee's average weekly wage is greater than fifty per cent of the state average weekly wage, the employee's weekly benefit shall be the sum of ninety per cent of the employee's average weekly wage up to fifty per cent of the state average weekly wage plus fifty per cent of the portion of the employee's average weekly wage that exceeds fifty per cent of the state average weekly wage.

(e) The maximum weekly family and medical leave benefit amount payable on or after January 1,     , shall be $1,000. By September 30,     , and by each subsequent September 30, the director shall adjust the maximum weekly benefit amount to reflect ninety per cent of the state average weekly wage. The adjusted maximum weekly benefit amount shall take effect on the following January 1 each year. The minimum weekly benefit shall not be less than $100 per week; provided that if the employee's average weekly wage at the time of family or medical leave is less than $100 per week, the weekly benefit amount shall be the employee's full average weekly wage.

(f) An employer may allow an employee who has accrued vacation, sick, or other paid time off to choose whether:

(1) To take such leave; or

(2) Not to take such leave and receive paid family or medical leave benefits, as provided in this section.

   -16 Employee eligibility; tenure. Employees shall be eligible for paid family and medical leave benefits as provided in this chapter after working for at least eight hundred twenty hours in employment during the qualifying period.

   -17 Employment protection. (a) Except as provided in subsection (f) and section -11(f), any employee who takes family or medical leave under this chapter shall be entitled, on return from the leave to be restored by the employer to:

(1) The position of employment held by the employee when the leave commenced; or

(2) To an equivalent position with equivalent employment benefits, pay, and other terms and conditions of employment.

(b) The taking of leave under this chapter shall not result in the loss of any employment benefits accrued before the date on which the leave commenced.

(c) Nothing in this section shall be construed to entitle any employee to:

(1) The accrual of any seniority or employment benefits during any period of leave; or

(2) Any right, benefit, or position of employment other than any right, benefit, or position to which the employee would have been entitled had the employee not taken the leave.

(d) As a condition of restoration under subsection (a) for an employee who has taken medical leave, the employer may have a uniformly applied practice or policy that requires each such employee to receive certification from the employee's health care provider that the employee is able to resume work.

(e) Nothing in this section shall be construed to prohibit an employer from requiring an employee on leave to report periodically to the employer on the status and intention of the employee to return to work.

(f) This section shall not apply unless the employee:

(1) Is employed by an employer with fifty or more employees;

(2) Has been employed by the current employer for twelve months or more; and

(3) Has been employed by the current employer for at least 1,250 hours during the twelve months immediately preceding the date on which leave commences.

For purposes of this section, an employer shall be considered to employ fifty or more employees if the employer employs fifty or more employees for each working day during each of twenty or more calendar workweeks in the current or preceding calendar year.

(g) An employer may deny restoration under this section to any salaried employee who is among the highest paid ten per cent of the employees employed by the employer within seventy-five miles of the facility at which the employee is employed if:

(1) Denial is necessary to prevent substantial and grievous economic injury to the operations of the employer;

(2) The employer notifies the employee of the intent of the employer to deny restoration on such basis at the time the employer determines that the economic injury would occur; and

(3) The employee's leave has commenced and the employee elects not to return to employment after receiving the notice.

   -18 Employee notice to employer. (a) If the necessity for leave for the birth or placement of a child with the employee is foreseeable based on an expected birth or placement, the employee shall provide the employer with not less than thirty days' written notice, before the date the leave is to begin, of the employee's intention to take leave for the birth or placement of a child. If the date of the birth or placement requires leave to begin in less than thirty days, the employee shall provide such notice as is practicable.

(b) If the necessity for leave for a family member's serious health condition or the employee's serious health condition is foreseeable based on planned medical treatment, the employee shall:

(1) Make a reasonable effort to schedule the treatment so as not to disrupt unduly the operations of the employer, subject to the approval of the health care provider of the employee or of the family member, as appropriate; and

(2) Provide the employer with not less than thirty days' written notice, before the date the leave is to begin, of the employee's intention to take leave for a family member's serious health condition or the employee's serious health condition; provided that if the date of the treatment requires leave to begin in less than thirty days, the employee shall provide such notice as practicable.

   -19 Application for benefits; requirements and documentation. (a) Family and medical leave insurance benefits shall be payable to an employee during a period of family and medical leave; provided that the employee:

(1) Files an application for benefits as required by rules adopted by the director;

(2) Has met the eligibility requirements of section    -16 or has elected coverage under section    -32;

(3) Consents to the disclosure of information or records deemed private and confidential under state and federal law solely for purposes related to qualification for benefits and the administration of this chapter and subject to sections    -8 and    -27, and chapter 92F;

(4) Discloses whether or not the employee owes child support obligations as defined in chapter 576D;

(5) Provides the employee's social security number;

(6) Provides a document authorizing the family member's or employee's health care provider, as applicable, to disclose the family member's or employee's health care information in the form of the certification of a serious health condition;

(7) Provides the employer from whom family and medical leave is to be taken with written notice of the employee's intention to take family leave as provided in section    -18 and, in the employee's initial application for benefits, attests that written notice has been provided; and

(8) If requested by the employer, provides documentation of a qualifying exigency.

(b) An employee who is not in employment for an employer at the time of filing an application for benefits shall be exempt from subsection (a)(7) and (8).

   -20 Timing of benefit payments; no disruption during contest of eligibility. (a) Benefits provided under this chapter shall be paid periodically and promptly, except as provided in this section. The department shall send the first benefit payment to the employee within fourteen calendar days of receipt of a completed application that establishes eligibility for benefits. Subsequent payments shall be sent at least biweekly thereafter.

(b) The department shall establish by rule a process that conforms to the requirements of chapter 91 and part V by which an employer may contest an employee's eligibility for paid family or medical leave benefits at the time of initial application and during the leave period.

(c) An employee who has received at least one benefit payment under this chapter may receive conditional benefit payments without disruption or delay during the pendency of any proceeding under part V related to the employee's eligibility for benefits. Rules governing conditional benefits shall contain, but not be limited to, provisions authorizing:

(1) At the employee's request, the department to withhold conditional benefit payments until the question of eligibility has been resolved;

(2) The immediate payment of any conditional benefit payments withheld upon the department's determination that the employee is eligible for benefits; and

(3) The repayment of any conditional benefit amounts erroneously paid to an employee determined by the department to have been ineligible for benefit payments.

   -21 Benefit exclusions and disqualification; employee penalties. (a) An employee shall not be entitled to paid family or medical leave benefits under this chapter:

(1) For any absence occasioned by the willful intention of the employee to bring about injury to or the sickness of the employee or another individual, or resulting from any injury or sickness sustained in the perpetration by the employee of an illegal act;

(2) For any leave that commences before the employee becomes eligible for benefits;

(3) While the employee is on suspension from the employee's employment; or

(4) For any day in which the employee works at least part of that day for remuneration or profit during the same or substantially similar working hours as those of the employer from which family or medical leave benefits are claimed; provided that occasional scheduling adjustments with respect to secondary employments shall not prevent receipt of family or medical leave benefits.

(b) An employee shall be disqualified from receiving benefits for knowingly and willfully making a false statement or representation involving a material fact or knowingly and willfully failing to report a material fact for the purpose of obtaining or attempting to obtain any benefit under this chapter. The disqualification shall begin at the start of the first benefit week for which eligibility was affected by the statement, representation, or failure to report. The department shall determine an employee's disqualification under this subsection pursuant to part V. An individual disqualified under this subsection for the:

(1) First time shall be disqualified for an additional twenty-six weeks beginning with the Sunday of the week in which the department determines the employee's disqualification and shall be subject to an additional penalty of fifteen per cent of the amount of benefits overpaid;

(2) Second time shall be disqualified for an additional fifty-two weeks beginning with the Sunday of the week in which the department determines the employee's disqualification and shall be subject to an additional penalty of twenty-five per cent of the amount of benefits overpaid; and

(3) Third time and any time thereafter shall be disqualified for an additional one hundred four weeks beginning with the Sunday of the week in which the department determines the employee's disqualification and shall be subject to an additional penalty of fifty per cent of the amount of benefits overpaid or deemed overpaid.

(c) All penalties collected under this section shall be deposited in the family and medical leave enforcement fund created under section    -13.

   -22 Expiration of benefits. (a) The entitlement to family leave benefits for the birth or placement of a child shall expire at the end of the twelve-month period beginning on the date of the birth or placement.

(b) The entitlement to family leave benefits for a family member's serious health condition, or leave for qualifying exigency, shall expire at the end of the twelve-month period beginning on the date of which the employee filed an application for the benefits.

(c) The entitlement to medical leave benefits for the employee's own serious health condition shall expire at the end of the twelve-month period beginning on the date on which the employee filed an application for medical leave benefits.

   -23 Federal income taxes; withholding. (a) If the Internal Revenue Service determines that family or medical leave benefits under this chapter are subject to federal income tax, the department shall advise each employee filing a new application for benefits, at the time of filing such application, that:

(1) The Internal Revenue Service has determined that 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 specified in the federal Internal Revenue Code; and

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

(b) Amounts deducted and withheld from benefits pursuant to this section shall remain in the family and medical leave insurance fund until transferred to the federal taxing authority as a payment of income tax.

(c) The director shall follow all procedures specified by the federal Internal Revenue Service pertaining to the deducting and withholding of income tax.

   -24 Child support obligations; withholding. If an employee owes delinquent child support obligations and the department determines that the employee is qualified for benefits, the department shall notify the applicable child support enforcement agency and shall deduct and withhold any benefit amount as required by the child support enforcement agency, any applicable court order, or other applicable state or federal law. The department may verify delinquent child support obligations with the child support enforcement agency of this State or other relevant jurisdiction.

   -25 Employee notice of rights. Whenever an employee of an employer who is eligible for benefits under this chapter is absent from work due to family or medical leave, or takes medical leave for more than seven consecutive days, the employer shall provide the employee with a written statement of the employee's rights under this chapter in a form prescribed by the director. The statement shall be provided to the employee within five business days after the employee's seventh consecutive day of absence due to family or medical leave, or within five business days after the employer has received notice that the employee's absence is due to family or medical leave, whichever is later.

   -26 Posting of notice regarding chapter; penalties. Each employer shall post and keep posted, in conspicuous places on the premises of the employer where notices to employees and applicants for employment are customarily posted, a notice in a form prescribed by the director, setting forth excerpts from or summaries of the pertinent provisions of this chapter and information pertaining to the filing of a complaint for violations of this chapter. Any employer that willfully violates this section shall be subject to a civil penalty of not more than $100 for each separate offense. Any penalties collected by the department under this section shall be deposited into the family and medical leave enforcement fund.

   -27 Employer requirements. (a) In the form and at the times specified in this chapter and by the director, an employer shall make reports, furnish information, and collect and remit premiums as required by this chapter to the department. If the employer is a temporary help services company that provides employees on a temporary basis to its customers, the temporary help services company is considered the employer for purposes of this section.

(b) An employer shall keep at the employer's place of business a record of employment, for a period of six years, 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 director. Information obtained under this chapter from employer records is confidential and not open to public inspection, other than to public employees in the performance of their official duties; provided that 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 the employer's records by written consent.

(c) All requirements relating to the collection of family and medical leave premiums are as provided in this chapter and rules adopted by the department pursuant to chapter 91. The department shall pursue the collection of premiums through enforcement procedures as specified in part V. The following shall constitute employer violations of this chapter:

(1) Failure to submit required reports;

(2) Failure to remit the full amount of premiums when due;

(3) Willfully making a false statement or misrepresentation regarding a material fact or willful failure to report a material fact in order to avoid submitting required reports or remitting the full amount of premiums when due under this chapter; and

(4) Any act enumerated in paragraphs (1) through (3) committed by a successor subject to section    -31 or by an officer, member, or owner who has control or supervision of payment or reporting of family and medical leave premiums or who is charged with the responsibility for the filing of returns.

   -28 Unlawful acts; employers. (a) It shall be unlawful for any employer to:

(1) Interfere with, restrain, or deny the exercise or attempted exercise of any valid right provided under this chapter; or

(2) Discharge or in any other manner discriminate against any employee for opposing any practice made unlawful by this chapter.

(b) It is unlawful for any person to discharge or in any other manner discriminate against any employee because the employee has:

(1) Filed any complaint, instituted, or caused to be instituted any proceeding under or related to this chapter;

(2) Given or intended to give any information in connection with any inquiry or proceeding relating to any right provided under this chapter; or

(3) Testified or intended to testify, in any inquiry or proceeding relating to any right provided under this chapter.

   -29 Premiums; solvency surcharge; limitation on local regulation. (a) Beginning January 1,     , the department shall assess for each individual in employment with an employer and for each self-employed individual electing coverage a premium based on the amount of the individual's wages subject to subsection (d). The premium rate for family leave benefits shall be equal to one-third of the total premium rate. The premium rate for medical leave benefits shall be equal to two-thirds of the total premium rate.

(b) For calendar year      and thereafter, the director shall determine the percentage of paid claims related to family leave benefits and the percentage of paid claims related to medical leave benefits and shall adjust the premium rates set in subsection (a) by the proportional share of paid claims.

(c) Beginning January 1,     , and ending December 31,     , the total premium rate shall be          of          per cent of the individual's wages subject to subsection (d). For family leave premiums, an employer may deduct from the wages of each employee up to the full amount of the premium required. For medical leave premiums, an employer may deduct from the wages of each employee up to forty-five per cent of the full amount of the premium required. An employer may elect to pay all or any portion of the employee's share of the premium for family leave or medical leave benefits, or both.

(d) The director shall annually set a maximum limit on the amount of wages subject to a premium assessment under this section that is equal to the maximum wages subject to taxation for social security benefits as determined by the social security administration.

(e) Employers with fewer than twenty-five employees employed in the State shall not be required to pay the employer portion of premiums for family leave and medical leave benefits.

(f) For calendar year      and thereafter, the total premium rate shall be based on the family and medical leave insurance fund balance ratio as of September 30 of the prior year. The director shall calculate the fund balance ratio by dividing the balance of the family and medical leave insurance fund by total covered wages paid by employers and self-employed individuals who elect coverage. The division shall be carried to the fourth decimal place with the remaining fraction disregarded unless it amounts to five hundred-thousandths or more, in which case the fourth decimal place shall be rounded to the next higher digit. If the account balance ratio is:

(1) Zero to nine hundredths of one per cent, the premium shall be six tenths of one per cent of the individual's wages;

(2) One tenth of one per cent to nineteen hundredths of one per cent, the premium shall be five tenths of one per cent of the individual's wages;

(3) Two tenths of one per cent to twenty-nine hundredths of one per cent, the premium shall be four tenths of one per cent of the individual's wages;

(4) Three tenths of one per cent to thirty-nine hundredths of one per cent, the premium shall be three tenths of one per cent of the individual's wages;

(5) Four tenths of one per cent to forty-nine hundredths of one per cent, the premium shall be two tenths of one per cent of the individual's wages; or

(6) Five tenths of one per cent or greater, the premium shall be one tenth of one per cent of the individual's wages.

(g) Beginning January 1,     , if the account balance ratio calculated in subsection (f) is below          of          per cent, the director shall assess a solvency surcharge at the lowest rate necessary to provide revenue to pay for the administrative and benefit costs of family and medical leave, for the calendar year, as determined by the director. The solvency surcharge shall be at least          of          per cent and no more than          of          per cent and shall be added to the total premium rate for family and medical leave benefits.

(h) Each employer shall collect from its employees the premiums and any surcharges provided under this section through payroll deductions and shall remit the amounts collected to the department. In collecting employee premiums through payroll deductions, the employer shall act as the agent of the employees and shall remit the amounts to the department as required by this chapter. On September 30 of each year, the department shall average the number of employees reported by each employer over the last four completed calendar quarters to determine the size of the employer for the next calendar year for the purposes of this section.

(i) Premiums shall be collected in the manner and at such intervals as provided in this chapter and rules adopted pursuant to chapter 91 by the department.

(j) Premiums collected under this section shall be placed in trust for the employees and employers that the program is intended to assist.

(k) No political subdivision may enact a charter, ordinance, regulation, rule, or resolution:

(1) Creating a paid family or medical leave insurance program that alters or amends the requirements of this chapter for any private employer;

(2) Providing for local enforcement of the provisions of this chapter; or

(3) Requiring private employers to supplement duration of leave or amount of wage replacement benefits provided under this chapter.

   -30 Out-of-state employees; premium waiver. (a) An employer may file an application with the department for a conditional waiver for the payment of family and medical leave premiums assessed under section    -29, for any employee who is:

(1) Physically based outside of the State;

(2) Employed in the State on a limited or temporary work schedule; and

(3) Not expected to be employed in the State for eight hundred twenty hours or more in a qualifying period.

(b) The department shall approve an application that has been signed by both the employee and employer verifying the reasonable belief that the conditions in subsection (a) will be met during the qualifying period.

(c) If the employee's employment in the State exceeds eight hundred twenty hours in a qualifying period, the conditional waiver shall expire and the employer and employee shall be responsible for their respective shares of all premiums that would have been paid during the qualifying period in which the employee exceeded eight hundred twenty hours of employment had the waiver not been granted. Upon payment of premiums pursuant to this subsection, the employee shall be credited for the hours worked and shall be eligible for benefits under this chapter as if the premiums were paid during the qualifying period.

   -31 Termination or disposal of business; premium payment; successor liability. Whenever any employer ceases business, or sells out, exchanges, or otherwise disposes of the employer's business or stock of goods, any premiums payable under this chapter shall become immediately due and payable and the employer shall, within ten days, make a return and pay the premiums due. Any person who becomes a successor to the business shall become liable for the full amount of the premiums and shall withhold from the purchase price a sum sufficient to pay any premiums due from the employer until such time as the employer produces a receipt from the department showing payment in full of any premiums due or a certificate that no premium is due. If the premium is not paid by the employer within ten days from the date of the cessation, sale, exchange, or disposal, the successor shall become liable for the payment of the full amount of premiums and the payment thereof by the successor shall be deemed a payment upon the purchase price. If the premium payment is greater than the purchase price, the amount of the difference shall become a debt due the successor from the employer. A successor shall not be liable for any premiums due from an employer 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 the department issues no assessment against the employer for premiums due within one hundred eighty days of receipt of the notice.

PART III. ELECTIVE COVERAGE

   -32 Elective coverage; self-employed individuals. (a) For benefits payable beginning January 1,     , any self-employed individual, including a sole proprietor, independent contractor, partner, or joint venturer, may elect coverage under this chapter for an initial period of not less than three years and subsequent periods of not less than one year each immediately following a previous period of coverage. Individuals electing coverage under this section shall elect coverage for both family leave and medical leave and shall be responsible for payment of one hundred per cent of all premiums and surcharges assessed under section    -29. The self-employed individual shall file a notice of election in writing with the department, in a manner as required by the department by rule adopted pursuant to chapter 91. A self-employed individual shall be eligible for family and medical leave benefits after working eight hundred twenty hours in the State during the qualifying period following the date of filing the notice of election.

(b) A self-employed individual who has elected coverage may withdraw from coverage within thirty days after the end of each period of coverage or at such other times as the director may adopt by rule by filing a notice of withdrawal in writing with the director. Withdrawal of coverage shall take effect not sooner than thirty days after filing the notice of withdrawal with the director.

(c) The department may cancel elective coverage if the self-employed individual fails to make required payments or file required reports, subject to service of notice of cancellation to the self-employed individual. The department may collect due and unpaid premiums after cancellation and may levy an additional premium for the remainder of the period of coverage. Cancellation pursuant to this subsection shall be effective no later than thirty days from the date of the notice advising the self-employed individual of the cancellation. Cancellation and assessment under this subsection shall be subject to part V.

(d) Self-employed individuals who elect coverage shall be considered employers or employees under this chapter where the context so dictates.

(e) For the purposes of this section, "independent contractor" means an individual excluded from the definition of employment.

(f) In adopting rules pursuant to chapter 91 implementing the requirements of this section, the department shall adopt government efficiencies to improve administration and reduce costs. These efficiencies may include, but are not limited to, requiring that payments be made in a manner and at intervals unique to the elective coverage program.

(g) The department shall adopt rules pursuant to chapter 91 for determining the hours worked and the wages of self-employed individuals who elect coverage under this section and for enforcement of this section.

PART IV. VOLUNTARY PLANS

   -33 Voluntary plans authorized. (a) An employer may voluntarily provide secure family and medical leave benefits for its employees in one or more of the following ways:

(1) By insuring and keeping insured the payment of family and medical leave benefits with any stock, mutual, reciprocal or other insurer authorized to transact the business of disability insurance in the State;

(2) By depositing and maintaining with the state director of finance, securities, or the bond of a surety company authorized to transact business in the State, as are satisfactory to the director securing the payment by the employer of family and medical leave benefits according to the terms of this chapter;

(3) Upon furnishing satisfactory proof to the director of the employer's or its solvency and financial ability to pay the family and medical leave benefits herein provided, no insurance or security or surety bond shall be required, and the employer shall make payments directly to the employer's employees, as they may become entitled to receive the same under the terms and conditions of this chapter;

(4) By a plan, entitling employees to cash benefits or wages during a period family or medial leave, in existence on January 1,     .

(A) If the employees of an employer or any class or classes of such employees are entitled to receive family and medical leave benefits under a plan or agreement which remains in effect on January 1,     , the employer, subject to the requirements of this section, shall be relieved of responsibility for making provision for benefit payments required under this chapter until the earliest date, determined by the director for the purposes of this chapter, upon which the employer has the right to discontinue the plan or agreement or to discontinue the employer's contributions toward the cost of the family and medical leave benefits. Any plan or agreement referred to in this subparagraph may be extended, with or without modification, by agreement or collective bargaining between the employer or employers or an association of employers and an association of employees; provided the benefits under the plan or agreement, as extended or modified, are found by the director to be at least as favorable as the family and medical leave benefits required by this chapter;

(B) Any other plan or agreement in existence on January 1,     , which the employer may, by the employer's sole act, terminate at any time, or with respect to which the employer is not obligated to continue for any period to make contributions, may be accepted by the director as satisfying the obligation to provide for the payment of benefits under this chapter if the plan or agreement provides benefits at least as favorable as the family and medical leave benefits required by this chapter and does not require contributions of any employee or of any class or classes of employees in excess of the employee premium contribution amount specified in section    -29, except by agreement and provided the contribution is reasonably related to the value of the benefits as determined by the director. The director may require the employer to enter into an agreement in writing with the director that until the employer shall have filed written notice with the director of the employer's election to terminate such plan or agreement or to discontinue making necessary contributions toward the cost of providing benefits under the plan or agreement, the employer will continue to provide for the payment of family and medical leave benefits under the plan or agreement. Any plan or agreement referred to in this subparagraph may be extended, with or without modification; provided the benefits under the plan or agreement, as extended or modified, are found by the director to be at least as favorable as the disability benefits required by this chapter; or

(5) By a new plan or agreement. On or after January 1,     , a new plan or agreement with an insurer may be accepted by the director as satisfying the obligation to provide for the payment of benefits under this chapter if the plan or agreement provides benefits at least as favorable as the family and medical leave benefits required by this chapter and does not require contributions of any employee or of any class or classes of employees in excess of the employee premium contribution amount specified in section    -29, except by agreement and provided the contribution is reasonably related to the value of the benefits as determined by the director. Any such plan or agreement shall continue until written notice is filed with the director of intention to terminate the plan or agreement, and any modification of the plan or agreement shall be subject to the written approval of the director.

(b) During any period in which any plan or agreement or extension or modification thereof authorized under subsection (a)(4) or (5) provides for payments of benefits under this chapter, the responsibility of the employer and the obligations and benefits of the employees shall be as provided in the plan or agreement or its extension or modification rather than as required under this chapter; provided that the director shall assess the solvency surcharge as provided in section    -29(g) to the same extent as provided in that section.

(c) If any plan or agreement authorized under subsection (a)(4) or (5) covers less than all of the employees of a covered employer, the requirements of this chapter shall apply with respect to the employer's remaining employees not covered under the plan or agreement.

(d) As used in subsection (a)(4) and (5), "benefits at least as favorable as the family and medical leave benefits required by this chapter" means the family and medical leave benefits under any plan or agreement, in whole or in part, whose component parts (waiting period for illness, waiting period for accident, duration of benefits, and percentage of wage loss replaced) add in total to cash benefits or wages that are determined by the director to be at least as favorable as the family and medical leave benefits required by this chapter. The insurance commissioner shall establish a set of tables showing the relative value of different types of cash benefits and wages to assist the director in determining whether the cash benefits and wages under a plan are at least as favorable as the family and medical leave benefits required by this chapter.

(e) Any decision of the director rendered pursuant to this section with respect to the amount of security required, refusing to permit security to be given or refusing to accept a plan or agreement as satisfying the obligation to provide for the payment of benefits under this chapter shall be subject to review on appeal in conformity with the provisions of this chapter.

   -34 Voluntary plans; generally. (a) An employer that offers a voluntary plan subject to this part shall apply to the director for approval of a voluntary plan for the payment of either family leave benefits or medical leave benefits, or both. The application shall be submitted on a form and in the manner as prescribed by the director by rule. The department may charge a fee for review of each application for approval of a voluntary plan as determined by the department by rule adopted pursuant to chapter 91.

(b) The benefits payable as indemnification for loss of wages under any voluntary plan shall be separately stated and designated separately and distinctly in the plan from other benefits, if any.

(c) Neither an employee nor an employer shall be liable for any premiums under section    -29, except for the solvency surcharge assessed under section    -29(g), for benefits covered by an approved voluntary plan.

(d) Except as provided in this section, an employee covered by an approved voluntary plan at the commencement of a period of family leave or medical leave shall not be entitled to benefits from the family and medical leave program established under section    -3. Benefits payable to the employee shall be the liability of the approved voluntary plan under which the employee was covered at the commencement of the family leave or medical leave period, regardless of any subsequent serious health condition or family leave which may occur during the benefit period. The director shall adopt rules pursuant to chapter 91 to allow benefits and to prevent duplication of benefits to employees simultaneously covered by one or more approved voluntary plans and the family and medical leave program established under section    -3.

(e) A voluntary plan may be withdrawn by the employer effective as of the date of any law that increases the plan's benefit amounts or the date of any change in the rate of employee premiums; provided that the employer transmits notice of the withdrawal to the director not less than thirty days prior to the effective date of the applicable law or change. Any plan subject to a statutory increase in benefit amounts or to a change in premiums that is not withdrawn shall be amended to provide for the increased benefit amount or change in the rate of the employee's premium on the date of the increase or change.

(f) The director shall approve a voluntary plan if:

(1) The plan covers at least one employee in employment;

(2) The benefits afforded to covered employees are at least equivalent to the benefits to which the employees are entitled under the family and medical leave program established under section    -3; provided that during of leave shall be considered equivalent if the voluntary plan provides for:

(A) The same duration of leave and benefit amount specified in section    -15; or

(B) At least one-half of the duration of leave specified in section    -15 with full salary paid plus a monetary benefit amount equal to or greater than the total monetary benefit amount to which the employee would be entitled under section    -15;

(3) Any sick leave to which an employee is entitled to is in addition to the family and medical leave benefits under the voluntary plan;

(4) The voluntary plan is available to all eligible employees of the employer employed in this State, including future employees;

(5) The employer consents to make the payroll deductions required, if any, and transmit the proceeds to the department for any premiums for employees not covered by the voluntary plan and for any solvency surcharge assessed;

(6) A voluntary plan shall be in effect for a period of not less than one year and, thereafter, continuously unless the director finds that the employer has given notice of withdrawal of the plan pursuant to subsection (e) in a manner specified by the director by rule adopted pursuant to chapter 91;

(7) The amount of payroll deductions from the wages of an employee shall not exceed the maximum payroll deduction authorized under section    -29, may be increased only on an anniversary of the effective date of the plan, and may be increased only to an amount that does not exceed the maximum rate authorized under section    -29;

(8) The voluntary plan provides for employee eligibility for coverage under terms that comport with the requirements of section    -36;

(9) The voluntary plan provides the same employment protection provisions contained in section    -17 for employees who have worked for the employer for at least nine months and nine hundred sixty-five hours during the twelve months immediately preceding the date leave will commence; and

(10) The voluntary plan provides that the employer maintains the employee's existing health benefits as provided under section    -57.

   -35 Voluntary plans; reapproval. Each employer that offers a voluntary plan shall apply for reapproval by the director annually for the first three years in which the plan is in effect after January 1,     . After three consecutive reapprovals are granted, the employer shall not be required to apply for reapproval unless the employer makes changes to the plan that were not mandated by changes to state law.

   -36 Voluntary plans; employee eligibility. (a) To be eligible for any family or medical leave, an employee shall be in employment for eight hundred twenty hours during the qualifying period with any employer subject to this chapter or that offers a voluntary plan. An employee shall be eligible for benefits under an employer's voluntary plan only after the employee works at least three hundred forty hours for that employer.

(b) An employee of an employer that offers a voluntary plan who had coverage under the family and medical leave program established under section    -3 shall retain coverage under the program until the employee is eligible for coverage under the employer's voluntary plan.

(c) An employee who was eligible for coverage under a prior employer's voluntary plan shall be immediately eligible for coverage under a subsequent employer's voluntary plan.

   -37 Voluntary plans; cessation of coverage. (a) Coverage under an approved voluntary plan shall not apply to family or medical leave that occurs after termination of an employee's employment relationship with the employer that provided the voluntary plan or termination of a voluntary plan's approval by the director.

(b) An employee who has ceased to be covered by an approved voluntary plan, if otherwise eligible pursuant to section    -16, shall be immediately entitled to benefits from the family and medical leave program established under section    -3.

   -38 Voluntary plans; employee costs. An employer that offers a voluntary plan may assume all or a greater part of the cost of voluntary plan premiums than required for premiums under section    -29. An employer may deduct from the wages of an employee covered by the voluntary plan, for the purpose of providing benefits under the voluntary plan, an amount not in excess of the employee premium amount specified in section    -29.

   -39 Voluntary plans; remaining wage deductions upon withdrawal of plan. All deductions from employee wages remaining in the possession of an employer upon the termination or withdrawal of a voluntary plan shall be disbursed in conformity with rules adopted by the department pursuant to chapter 91 or remitted to the department for deposit in the family and medical leave insurance fund.

   -40 Voluntary plans; employee contributions and income held in trust. Any employee contributions to and income arising from an approved voluntary plan received or retained by an employer shall be held in trust and shall not be considered to be part of the employer's assets. Each employer that offers a voluntary plan shall maintain a separate, specifically identifiable trust account in a financial institution for deposit of employee contributions to and income arising from the voluntary plan.

   -41 Voluntary plans; successor employer. Any successor that acquires an employer, substantially all the assets of an employer, or a distinct and severable portion of an employer that offers a voluntary plan that is in force and effect at the time of acquisition and continues the employers operations without substantial reduction of personnel resulting from the acquisition shall continue the voluntary plan unless the successor:

(1) Submits a request for withdrawal of the plan in a manner and at a time specified by the director; or

(2) Submits notice of termination of the plan to the director within ninety days from the date of the acquisition.

   -42 Voluntary plans; amendment. The director shall approve any amendment to a voluntary plan adjusting the provisions thereof, as to periods after the effective date of the amendment, if the director finds that:

(1) The plan, as amended, will conform to the standards set forth in this chapter; and

(2) Notice of the amendment has been delivered to employees at least ten days prior to the approval.

   -43 Voluntary plans; termination by the director. (a) The director may terminate any voluntary plan if the director finds that there is risk that the benefits accrued or that will accrue will not be paid, that the plan does not conform with the requirements of this part, or for other good cause shown.

(b) The director shall give notice of the director's intention to terminate a voluntary plan to the relevant employer at least ten days before taking any final action to terminate the plan. The notice shall state the effective date of and the reason for the termination.

(c) The employer may, after service of the notice required by subsection (b), file an appeal in the time, manner, method, and procedure provided in part V.

(d) The payment of benefits by and the operations, including transfer of moneys, of a voluntary plan shall not be delayed or interrupted during the pendency of an employer's appeal under this section.

(e) If an employer's voluntary plan has been terminated by the director the employer shall not be eligible to apply for approval of another voluntary plan for a period of three years.

(f) On the effective date of the termination of a plan by the director, all moneys in the plan, including moneys paid by the employer, moneys paid by the employees and held in trust, moneys owed to the voluntary plan by the employer but not yet paid to the plan, and any interest accrued shall be remitted to the department and deposited into the family and medical leave insurance fund.

   -44 Voluntary plans; reports, information, and records. Employers who offer coverage through an approved voluntary plan shall maintain all reports, information, and records relating to the voluntary plan and claims under the plan for six years and shall furnish them to the director upon request.

PART V. ENFORCEMENT

   -45 Filing of complaint. (a) Any individual claiming to be aggrieved by an alleged violation of this chapter, contesting a determination of eligibility for benefits, or contesting any decision or order of the department may file with the department a verified complaint in writing.

(b) The attorney general or the department, in like manner, may file a complaint on behalf of an individual.

(c) A complaint may be filed on behalf of a class by the attorney general or the department.

(d) Except as otherwise provided in this chapter, no complaint shall be filed after the expiration of ninety days after the:

(1) Date of the alleged violation, determination, decision, or order; or

(2) Date of discovery by the employee of the alleged violation; provided that in no event shall such a complaint be filed after the expiration of one hundred eighty days of the alleged violation;

(e) After the filing of any complaint, the attorney general or the department, as applicable, shall serve a copy of the complaint upon the employer.

   -46 Predetermination settlement. At any time after the filing of a complaint, but prior to a determination by the department that this chapter has been violated, the parties may agree to resolve the complaint through a predetermination settlement.

   -47 Investigation and conciliation. (a) The department may investigate and conciliate any complaint filed under this chapter.

(b) Every employer shall furnish or provide to the department access to records, documents, and other material to determine compliance with this chapter. The department shall have the right to examine, photograph, or copy the material and interview witnesses at the place of employment or business during regular working hours with respect to any matter under this chapter.

(c) The department may require by subpoena the attendance and testimony of witnesses and the production of all records, payrolls, correspondence, documents, and other material relative to any matter under investigation.

(d) If the department determines after investigation that this chapter has been violated, the department shall inform the alleged violator and endeavor to remedy the violation by informal methods, such as conference or conciliation.

(e) If the department finds that methods in subsection (d) will not resolve the complaint, the department shall issue an order and a demand for compliance.

(f) If the department issues an order that finds that a person has violated the requirements of this chapter, the department may prescribe relief as provided under this chapter.

   -48 Appeal and hearing. (a) Upon appeal by the subject of the order, the order issued by the department shall be subject to a de novo review by a hearings officer appointed by the director.

(b) The hearings officer shall schedule a contested case hearing that shall be heard in accordance with chapter 91.

(c) At any time after the filing of an appeal under subsection (a), but prior to the hearing, the hearings officer may hold a prehearing conference with the parties or their representatives.

(d) If a hearing is held as provided under subsection (b), the hearings officer shall issue a decision and grant relief as provided under this chapter.

(e) Any person aggrieved by the decision of the hearings officer shall be entitled to judicial review as provided by section 91-14.

(f) The hearings officer may administer oaths, take or cause to be taken depositions of witnesses, and may issue subpoenas to compel the attendance and testimony of witnesses or the production of records, payrolls, correspondence, documents, or other material relating to any matter to be heard.

   -49 Civil action. (a) If any party fails or neglects to comply with the:

(1) Final order of the department from which no appeal has been taken as provided by this chapter; or

(2) Final decision of the hearings officer,

the department or the affected party may apply to any court of competent jurisdiction to enforce the provisions of the final order or decision and for any other appropriate relief. In any proceeding to enforce the provisions of the final order or decision, the department or the affected party need only file with the court proof that a certified copy of the final order or decision was served. In the case of the final decision, proof that the notice of hearing was given also must be filed with the court.

(b) Any action to enforce this chapter, or to recover damages or equitable relief prescribed by this chapter, may be maintained in any court of competent jurisdiction by any one or more employees for and on behalf of the employee or employees, or the employee or employees may designate an agent or representative to maintain the action.

(c) In any action brought under this chapter, the court shall allow, in addition to any judgment awarded to the plaintiff, costs of action, including fees of any nature, and reasonable attorney's fees to be paid by the defendant.

   -50 Remedies. (a) Remedies prescribed and ordered by the department or the court under this chapter may include any legal, equitable, and other relief the department or court deems appropriate.

(b) Relief under this section may include:

(1) The amount of any wages, salary, employment benefits, or other compensation denied or lost to the employee by reason of the violation;

(2) In a case in which wages, salary, employment benefits, or other compensation have not been denied or lost to the employee, any actual monetary losses sustained by the employee as a direct result of the violation, such as the cost of providing care, up to a sum equal to four weeks of wages or salary for the employee; or

(3) Repayment of any overpayment liability owed.

(c) An employer may be liable for an additional amount as liquidated damages equal to the sum of the applicable amount in subsection (b)(1) and (2); provided that if an employer who has violated this chapter proves to the satisfaction of the department or the court that the act or omission that violated this chapter was in good faith and that the employer had reasonable grounds for believing that the act or omission was not a violation of this chapter, the department or the court may reduce the amount of the liability to the applicable amount determined under subsection (b)(1) or (2).

   -51 Notice of right to sue and employee remedies. (a) The department may issue a notice of right to sue. Within ninety days after the receipt of a notice of right to sue, the complainant may bring a civil action under this chapter. The department may intervene in a civil action brought pursuant to this chapter if the case is of general importance.

(b) An action by an employee to enforce the provisions of this chapter may be maintained in any court of competent jurisdiction by any one or more employees for and in behalf of oneself or themselves, or the employee or employees may designate an agent or representative to maintain the action.

(c) The court in any action brought under this section, in addition to any judgment awarded to the plaintiff or plaintiffs, shall allow costs of action, including costs of fees of any nature, and reasonable attorney's fees, to be paid by the defendant.

(d) The court also may provide injunctive relief in appropriate circumstances.

   -52 Compliance review. The department may investigate whether the terms of an agreement, settlement, order, or decision are being complied with by any party. If the party is not in compliance, the department shall take appropriate action as provided under this chapter.

   -53 Penalty. Any employer who intentionally resists, prevents, impedes, or interferes with the department in the performance of duties pursuant to this chapter, or who in any manner intentionally violates this chapter, shall be guilty of a petty misdemeanor.

   -54 Repayment and recovery of benefit overpayments. (a) Any individual who is paid any amount of benefits under this chapter to which the individual is not entitled, unless otherwise relieved pursuant to this section, shall be liable for repayment of the amount overpaid. The department shall issue an overpayment assessment setting forth the reasons for and the amount of the overpayment. The amount assessed, to the extent not collected, may be deducted from any future benefits payable to the individual under this chapter. In the absence of a back pay award, a settlement affecting the allowance of benefits, fraud, misrepresentation, or willful nondisclosure every determination of liability shall be served as provided in chapter 91 no later than two years after the close of or final payment made on the individual's applicable eligibility period for which the purported overpayment was made. If the overpayment assessment is subjected to administrative or judicial review as provided in this part, the determination of liability shall be served within six months of following the final decision affecting the claim.

(b) The director may waive an overpayment liability if the director finds that the overpayment was not the result of fraud, misrepresentation, willful nondisclosure, conditional payment, or fault attributable to the individual and that the recovery thereof would be against equity and good conscience. An overpayment liability waived under this subsection shall be charged against the individual's applicable entitlement for the eligibility period containing the weeks to which the overpayment was attributed as though the benefits had been properly paid.

(c) Any overpayment assessment issued pursuant to subsection (a) shall constitute a determination of liability subject to this part.

(d) Any employer who is a party to a back pay award or settlement due to loss of wages shall, within thirty days of the award or settlement, report to the department the amount of the award or settlement, the name and social security number of the recipient of the award or settlement, and the period for which it is awarded. When an individual has been awarded or receives back pay, for benefit purposes the amount of the back pay shall constitute wages paid in the period for which it was awarded. For premium purposes, the back pay award or settlement shall constitute wages paid in the period in which it was actually paid. The following requirements shall also apply:

(1) The employer shall reduce the amount of the back pay award or settlement by an amount determined by the department based upon the amount of paid family or medical leave benefits received by the recipient of the award or settlement during the period for which the back pay award or settlement was awarded;

(2) The employer shall pay to the family and medical leave insurance fund, in a manner specified by the director, an amount equal to the amount of the reduction;

(3) The employer shall also pay to the department any premiums due for family and medical leave program purposes on the entire amount of the back pay award or settlement notwithstanding any reduction made pursuant to (a) of this subsection;

(4) If the employer fails to reduce the amount of the back pay award or settlement as required in paragraph (1), the department shall issue an overpayment assessment against the recipient of the award or settlement in the amount that the back pay award or settlement should have been reduced; and

(5) If the employer fails to pay to the department an amount equal to the reduction as required in paragraph (2), the department shall issue an assessment of liability against the employer that shall be collected pursuant to the procedures for collection of overpayment liability assessments provided in this section.

(e) If an individual fails to repay an overpayment liability assessment that is due and fails to arrange for satisfactory repayment terms, the director shall impose a penalty of one per cent per month of the outstanding balance. The penalty shall accrue when the individual has missed two or more of the individual's monthly payments either partially or in full.

(f) Any penalties and interest collected pursuant to this section shall be deposited into the family and medical leave enforcement fund.

(g) The department shall:

(1) Conduct social security number cross-match audits or engage in other more effective activities that ensure that individuals are entitled to all amounts of benefits that they are paid; and

(2) Engage in other detection and recovery of overpayment and collection activities.

PART VI. INTERACTION WITH OTHER LAWS AND BENEFIT PROGRAMS

   -55 Collective bargaining agreements. Nothing in this chapter shall require any party to a collective bargaining agreement in existence on         ,     , to reopen negotiations of the agreement or to apply any of the rights and responsibilities under this chapter unless and until the existing agreement is reopened or renegotiated by the parties or expires.

   -56 Workers' compensation; unemployment benefits; disability insurance. (a) Leave from employment under this chapter shall be separate from and in addition to leave from employment during which benefits are paid or are payable under chapter 386 or other applicable federal or state workers' compensation laws.

(b) In any week in which an employee is eligible to receive benefits under chapters 383, 385, 386, or 398A, or other applicable federal or state unemployment compensation, workers' compensation, or disability insurance laws, the employee shall be disqualified from receiving family or medical leave benefits under this chapter.

   -57 Continuation of health benefits. During any period of family or medical leave taken under this chapter, the employer shall maintain any existing health benefits of the employee in force for the duration of such leave as if the employee had continued to work from the date the employee commenced family or medical leave until the date the employee returns to employment. If the employer and employee share the cost of the existing health benefits, the employee shall remain responsible for the employee's share of the cost. This section shall not apply to an employee who is not in employment for an employer at the time of filing an application for benefits.

   -58 Leave available under other laws; coordination. (a) Leave under this chapter and leave under the federal Family and Medical Leave Act of 1993 (Act Feb. 5, 1993, P.L. 103-3, 107 Stat. 6) is in addition to any leave for sickness or temporary disability because of pregnancy or childbirth.

(b) Unless otherwise expressly permitted by the employer, leave taken under this chapter shall be taken concurrently with any leave taken under the federal Family and Medical Leave Act of 1993 (Act Feb. 5, 1993, P.L. 103-3, 107 Stat. 6).

   -59 Discrimination laws not affected. Nothing in this chapter shall be construed to modify or affect any state or local law prohibiting discrimination on the basis of race, color, religion, age, sex, including gender identity or expression, sexual orientation, marital status, national origin, ancestry, or disability.

   -60 Employer supplementation; rights not subject to waiver or diminishment. (a) Nothing in this chapter shall be construed to discourage employers from:

(1) Adopting or retaining leave policies more generous than any policies that comply with the requirements under this chapter; or

(2) Making payments to supplement the benefit payments provided under section    -15 to an employee on family or medical leave.

(b) Any agreement by an individual to waive his or her rights under this chapter is void as against public policy.

(c) After January 1,     , subject to section    -55, an employee's rights under this chapter shall not be diminished by a collective bargaining agreement or employer policy.

   -61 No continuing entitlement or contractual right. This chapter does not create a continuing entitlement or contractual right. The legislature reserves the right to amend or repeal all or part of this chapter at any time, and a benefit or other right granted under this chapter exists subject to the legislature's power to amend or repeal this chapter. There is no vested private right of any kind against such amendment or repeal.

   -62 Conflict with federal requirements. If any part of this chapter is found to be in conflict with federal requirements that are a prescribed condition to the allocation of federal funds to the State or the eligibility of employers in this State for federal unemployment tax credits, the conflicting part of this chapter shall be inoperative solely to the extent of the conflict, and the finding or determination does not affect the operation of the remainder of this chapter. Rules adopted under this chapter shall meet federal requirements that are a necessary condition to the receipt of federal funds by the State or the granting of federal unemployment tax credits to employers in this State."

SECTION 3. Chapter 392, Hawaii Revised Statutes, is repealed.

SECTION 4. Chapter 398, Hawaii Revised Statutes, is repealed.

SECTION 5. If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

SECTION 6. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 7. This Act shall take effect upon its approval; provided that sections 3 and 4 shall take effect upon implementation of the provisions in section 2 on January 1,     .

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

Employment; Health; Paid Family and Medical Leave; Insurance

 

Description:

Establishes the Paid Family and Medical Leave Program. Creates fund.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.