Bill Text: HI HB2645 | 2012 | Regular Session | Amended

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Bill Title: Professional Employment Organizations; Professional Employer Organizations

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Introduced - Dead) 2012-02-10 - (H) Passed Second Reading as amended in HD 1 and referred to the committee(s) on CPC/JUD with none voting aye with reservations; Representative(s) Marumoto voting no (1) and Representative(s) C. Lee, M. Lee excused (2). [HB2645 Detail]

Download: Hawaii-2012-HB2645-Amended.html

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STAND. COM. REP. NO.  282-12

 

Honolulu, Hawaii

                , 2012

 

RE:   H.B. No. 2645

      H.D. 1

 

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Sixth State Legislature

Regular Session of 2012

State of Hawaii

 

Sir:

 

     Your Committee on Economic Revitalization & Business, to which was referred H.B. No. 2645 entitled:

 

"A BILL FOR AN ACT RELATING TO PROFESSIONAL EMPLOYER ORGANIZATIONS,"

 

begs leave to report as follows:

 

     The purpose of this measure is to facilitate regulation of professional employer organizations by the Department of Labor and Industrial Relations by:

 

     (1)  Establishing the Professional Employer Special Fund;

 

     (2)  Authorizing the Director of Labor and Industrial Relations to make rules and impose penalties against professional employer organizations for noncompliance with chapter 373L, Hawaii Revised Statutes, or the rules of the Director;

 

     (3)  Making conforming amendments to existing sections of the Hawaii Revised Statutes to promote conformity across statutory chapters;

 

     (4)  Specifying bond amounts required for professional employer organizations; and

 

     (5)  Making technical, nonsubstantive changes for the purposes of clarity and consistency.

 

     The Department of Labor and Industrial Relations and Department of Commerce and Consumer Affairs testified in support of this measure.  ProService Hawaii testified in support of the intent of this measure.  Employer Services Assurance Corporation and National Association of Professional Employer Organizations provided comments on this measure.

 

     Your Committee has amended this measure by among other things:

 

     (1)  Amending the sources of funding for the Professional Employer Organization Special Fund;

 

     (2)  Adding a definition for "controlling persons";

 

     (3)  Allowing the Director of Labor and Industrial Relations to fine a professional employer organization and its controlling persons for failing to meet the requirements of the chapter;

 

     (4)  Removing the language that specifies that the Director shall ensure the segregation of accounts through client trust accounts and establishing grounds for disciplinary action and practices;

 

     (5)  Deleting provisions relating to the Director's authority to issue cease and desist orders and the procedures therefor, for specified acts and practices that violate the professional employer organization laws;

 

     (6)  Specifying that professional employer organizations shall be responsible for all obligations of assigned employees at the client companies worksites for purposes of Hawaii Revised Statutes, chapter 383, relating to the State's unemployment laws; chapter 386, relating to Workers' Compensation laws; chapter 392, relating to temporary disability insurance; and chapter 393, relating to Hawaii Prepaid Health Care Act;

 

     (7)  Specifying that professional employer organization registration shall expire on June 30 of each even-numbered year;

 

     (8)  Including language to explain how a professional employer organization may restore a forfeited registration;

 

     (9)  Changing the effective date to July 1, 2112, to facilitate further discussion;

 

     (10) Making conforming amendments to ensure consistency throughout the Hawaii Revised Statutes; and

 

     (11) Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

 

     As affirmed by the record of votes of the members of your Committee on Economic Revitalization & Business that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2645, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2645, H.D. 1, and be referred to the Committees on Consumer Protection & Commerce and Judiciary.

 

Respectfully submitted on behalf of the members of the Committee on Economic Revitalization & Business,

 

 

		____________________________ ANGUS L.K. McKELVEY, Chair