Bill Text: HI SCR33 | 2024 | Regular Session | Amended
Bill Title: Requesting The Department Of Labor And Industrial Relations To Convene An Interagency Task Force To Combat The Underground Economy And Employee Misclassification In The State's Construction Industry.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2024-05-31 - Certified copies of resolution sent, 05-31-24 [SCR33 Detail]
Download: Hawaii-2024-SCR33-Amended.html
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THE SENATE |
S.C.R. NO. |
33 |
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THIRTY-SECOND LEGISLATURE, 2024 |
S.D. 1 |
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STATE OF HAWAII |
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SENATE CONCURRENT
RESOLUTION
REQUESTING THE DEPARTMENT OF LABOR AND INDUSTRIAL RELATIONS TO CONVENE AN INTERAGENCY TASK FORCE TO COMBAT THE UNDERGROUND ECONOMY AND EMPLOYEE MISCLASSIFICATION IN THE STATE'S CONSTRUCTION INDUSTRY.
WHEREAS, the "underground economy" refers to those individuals and businesses that utilize schemes to conceal or misrepresent their employee population to avoid one or more of their employer responsibilities related to wages, payroll taxes, insurance, licensing, safety, or other regulatory requirements; and
WHEREAS, the underground economy also encompasses other activities such as tax evasion, payroll fraud, under-the-table work, and wage theft; and
WHEREAS, these activities may include but are not limited to paying wages in cash, skimming some or all the cash takings, not paying overtime wages, paying sub-minimum wages, charging individuals for transportation and supplies essential to the work, underreporting employees, misclassifying employees as independent contractors, forcing employees to set up shell subcontractor entities, running a part of normal business activities off-the-books, not registering a business to avoid tax obligations or to avoid obtaining the necessary licenses and insurance policies; and
WHEREAS, the health of Hawaii's economy, its workers, and its businesses are harmed by the existence of an illegal underground economy in which individuals and businesses conceal their activities from government licensing, regulatory, and taxing authorities; and
WHEREAS, individuals and businesses that operate in the underground economy do so in violation of labor, employment, tax, insurance, and occupational safety laws, by failing to pay required wages; carry workers' compensation insurance; comply with health, safety, and licensing requirements; or pay income taxes and payroll taxes that fund unemployment insurance, disability insurance, and Medicare and Social Security benefits; and
WHEREAS, certain
businesses also improperly classify their employees as "independent
contractors" (referred to as "employee misclassification") and
hire undocumented workers to avoid compliance with labor, employment, tax,
insurance and other regulatory requirements; and
WHEREAS, the
underground economy and, in particular, the practice of employee
misclassification exploits vulnerable workers and deprives them of legal
benefits and protections; gives unlawful businesses an unfair competitive advantage
over lawful businesses by illegally driving down violators' taxes, wages, and
other overhead costs; defrauds the government of substantial tax revenues; and
harms consumers who suffer at the hands of unlicensed businesses that fail to
maintain minimum levels of skills and knowledge; and
WHEREAS, Hawaii faces an underground economy and employee misclassification problem which has deprived the State of valuable tax revenue; and
WHEREAS, in 2016, federal and State agencies formed task forces ad-hoc that were instrumental in enforcing wage laws against employers who were found guilty for employee misclassification; and
WHEREAS, it is critical to ensure that the State has a unified strategy and approach toward protecting Hawaii's economy, its workers, and its businesses from an illegal underground economy, through joint efforts to combat the underground economy and employee misclassification, ensure safe working conditions and proper payment of wages for workers; create an environment where legitimate businesses can thrive; and support the collection of all taxes, fees, and penalties due from employers; now, therefore,
BE IT RESOLVED by the Senate of the Thirty-second Legislature of the State of Hawaii, Regular Session of 2024, the House of Representatives concurring, that the Department of Labor and Industrial Relations is requested to convene an Interagency Task Force to combat the underground economy and employee misclassification in the State's construction industry; and
BE IT FURTHER RESOLVED that the Interagency Task Force is requested to:
(1) Serve as the State's interagency advisory entity with representation from state and county government agencies to combat the underground economy and employee misclassification within the State's construction industry;
(2) Facilitate timely information sharing between
and among taskforce members, including through the establishment of protocols
by which participating agencies will advise or refer to other agencies matters
of potential investigative interest;
(3) Identify those sectors in the construction
industry where the underground economy and employee misclassification are most
prevalent and target task force members' investigative resources against those
sectors, including through the formation of interagency investigative teams;
(4) Assess existing investigative and enforcement
methods, both in Hawaii and in other jurisdictions, and develop and recommend
strategies to improve those methods;
(5) Solicit the cooperation and participation of prosecuting
attorneys at the federal, state, and county levels and other relevant federal,
state and county enforcement agencies, including the United States Department
of Labor, and establish procedures for referring cases to prosecuting
authorities as appropriate;
(6) Identify potential regulatory or statutory
changes that would strengthen enforcement efforts, including any changes needed
to resolve existing legal ambiguities or inconsistencies, and potential legal
procedures for facilitating individual enforcement efforts;
(7) Consult with representatives of business and labor
organizations, members of the Legislature, representatives of county
governments, community groups, and other agencies concerning the activities of
the task force and its members, and ways of improving its effectiveness,
including consideration of whether to establish an advisory panel under the Department
of Labor and Industrial Relations;
(8) Transmit an annual report, no later than
twenty days prior to the convening of each Regular Session to the Legislature, Governor,
mayor of each county, and chair of each county council summarizing the task force's
activities during the preceding year; provided that the annual report is
requested to:
(A) Describe the task force's efforts and accomplishments during the year;
(B) Identify any administrative or legal barriers impeding the more effective operation of the task force, including any barriers to information sharing or joint action;
(C) Propose, after consultation with representatives of business and labor organizations, members of the Legislature, representatives of county governments, community groups, and other agencies, the appropriate administrative, legislative, or regulatory changes to strengthen the task force's operations efforts and reduce or eliminate any barriers to those efforts; and
(D) Identify successful preventative mechanisms for reducing the extent of the underground economy and employee misclassification, thereby reducing the need for greater enforcement;
(9) Take appropriate steps to publicize its activities; and
(10) Identify the number and types of positions required to restore the capacity of the Department of Labor and Industrial Relations to meaningfully administer applicable existing laws; and
BE IT FURTHER RESOLVED that to the extent permitted by law, every agency within the State's and counties' executive branch is requested to make all reasonable efforts to cooperate with the task force and to furnish information and assistance as the task force reasonably deems necessary to accomplish its purposes; and
BE IT FURTHER RESOLVED that the Interagency Task Force is requested to regularly hold meetings closed to the public when task force members plan to discuss sensitive matters related to its investigations, potential criminal referrals, and public safety and security topics; and
BE IT FURTHER RESOLVED that the Director of Labor and Industrial Relations is requested to serve as the chairperson of the Interagency Task Force and to invite the following to serve as members:
(1) A representative from the United States Department of Labor Wage and Hour Division, Honolulu District Office;
(2) Director of Taxation or the Director's designee;
(3) Administrator of the Hawaii Occupational Safety and Health Division of the Department of Labor and Industrial Relations or the Administrator's designee;
(4) Administrator of the Disability Compensation Division of the Department of Labor and Industrial Relations or the Administrator's designee;
(5) Administrator of the Unemployment Insurance Division of the Department of Labor and Industrial Relations or the Administrator's designee;
(6) Administrator of the Wage Standard Division of the Department of Labor and Industrial Relations or the Administrator's designee;
(7) Division Administrator of the Professional and Vocational Licensing Division of the Department of Commerce and Consumer Affairs or the Division Administrator's designee;
(8) Complaints and Enforcement Officer of the Regulated Industries Complaints Office of the Department of Commerce and Consumer Affairs or the Complaints and Enforcement Officer's designee;
(9) Executive Director of the Office of Consumer Protection of the Department of Commerce and Consumer Affairs or the Executive Director's designee;
(10) Insurance Commissioner or the Commissioner's designee;
(11) Director of each county's planning and permitting department or the Director's designee;
(12) The Attorney General or the Attorney General's designee; and
(13) Additional members from federal, state, or county agencies as deemed appropriate by the chairperson of the Interagency Task Force; and
BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the District Director of the Honolulu District Office of the United States Department of Labor Wage and Hour Division; Governor; Director of Labor and Industrial Relations; Director of Taxation; Director of Commerce and Consumer Affairs; Insurance Commissioner; Attorney General; Mayors of the City and County of Honolulu, County of Maui, County of Kauai, and County of Hawaii; and Chairpersons of the Honolulu City Council, Maui County Council, Kauai County Council, and Hawaii County Council.
Department Of Labor and Industrial Relations, Task Force, Employee Classification, Employee Rights, Wages, Benefits
