RELATING TO LABOR.

HB1290

HOUSE OF REPRESENTATIVES

H.B. NO.

1290

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

relating
to labor
.

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

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SECTION 1.
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The legislature finds that gig workers are
independent contractors or freelancers who typically do short-term work for
multiple clients.
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The gig work may be
project-based, hourly or part-time, and can either be an ongoing contract or a
temporary position.

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Due to new labor market dynamics and
technological innovations, the enlistment of gig workers is increasingly more
popular.
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By some estimates, over
one-third of United States workers now participate in the gig economy.
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In Hawaii, reports have estimated that there
are more than one hundred ten thousand gig workers in the State.
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Of these gig workers, the highest proportion
are between the ages of eighteen and twenty-nine.

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The legislature further finds that
due to their classification as independent contractors, gig workers are
generally excluded from a litany of employee benefits and protections, ranging
from paid leave and retirement plans to workers' compensation and health
insurance.
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These benefits are critical
to individual and household financial security and, in their absence, workers
and their families are at greater risk of income and expense volatility.

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The legislature finds that it is in
the best interests of the people of the State to ensure that these benefits are
extended to gig workers to ensure economic stability.
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In devising the new provision of benefits, the
benefits should be independent of the employers and connected to the individual
worker.
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Furthermore, the benefits would
be portable, taken from job to job without interruption in coverage or loss of
funding.

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Accordingly, the purpose of this Act
is to establish a program of portable benefits for gig workers.

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

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Chapter

portable benefits program

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-1
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Definitions.
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As used in this chapter, unless the context
otherwise requires:

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"Board" means the board of
trustees of the portable benefits program established under section
-2.

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"Contracting agent" means
a business, organization, corporation, limited liability company, partnership,
sole proprietor, or any other entity that facilitates the provision of services
by workers to consumers seeking the services and makes payments to workers,
where the provision of services is taxed as an independent contractor, using federal
Internal Revenue Service form 1099.

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

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"Principal" means a person
or company engaged in the business of manufacturing, who:

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(1)
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Manufactures,
produces, imports, or distributes a product for wholesale;

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(2)
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Contracts with a
sales representative to solicit orders for the product; and

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(3)
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Compensates the
sales representative in whole or in part by commission.

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"Qualified benefit
provider" means a benefit provider that is eligible to provide benefits to
workers of contracting agents pursuant to this act.

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"Worker" means a person
who provides services to consumers through a contracting agent.
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"Worker" does not include:

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(1)
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Any person who
contracts to solicit orders in the State as the sales representative of a
principal; or

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(2)
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Any person subject
to a collective bargaining agreement that specifies wages, terms, and
conditions of employment.

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-2
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Portable benefits program board of trustees;
establishment.
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(a)
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There is established within the department
for administrative purposes only, a portable benefits program board of trustees
to implement and administer a portable benefits program for workers.

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(b)
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The board shall consist of nine trustees appointed by the governor in
accordance with section 26-34.
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The trustees
shall elect from among the members a chair, vice-chair, and
secretary-treasurer.

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(c)
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A simple majority of trustees shall constitute quorum to do
business.
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Any action taken by the board
shall be approved by a simple majority of the trustees present.
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Any vacancy on the board shall not impair the
authority of the remaining trustees to exercise all the powers of the
board.
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All decisions of the board shall
be reduced into writing and shall state separately the board's findings of fact
and conclusions.

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(d)
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Each trustee shall serve without compensation, but the trustees may be
reimbursed for any reasonable expenses incurred in carrying out the purposes of
the chapter.

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(e)
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The board, or its co-chairs with the approval of the board, may employ
an executive director exempt from chapters 76 and 89, and other staff necessary
to perform its duties.

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-3
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Portable benefits program.
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There is established within the department
for administrative purposes only, a portable benefits program.
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The program shall be administered by the
board, in consultation with the department.
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The board may determine the time frame for the development and
implementation of the program.

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-4
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Selection of qualified benefit providers.
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The board shall adopt rules for organizations
to become qualified benefit providers.
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At a minimum, the rules governing qualified benefit providers shall
require that the following criteria are met:

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(1)
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The organization
shall be a credit union chartered under article 10 of chapter 412;

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(2)
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The organization
shall be independent from all business entities, organizations, corporations,
or individuals that would pursue any financial interest in conflict with that
of the workers;

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(3)
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All action of the
organization regarding provision of benefits shall be for the sole purpose of
maximizing benefits to the covered workers; and

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(4)
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The board of
directors of the organization shall hold a fiduciary duty to the workers with
respect to provision of benefits.

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-5
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Rules.
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The board shall establish rules pursuant to chapter 91 to implement and
administer this chapter, including:

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(1)
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If appropriate, modifying
any provision of this chapter, including any modification to the minimum
contribution amount;

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(2)
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Monitoring
compliance of contracting agents;

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(3)
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Monitoring
qualified benefit providers, including the ability to remove providers that are
out of compliance with the criteria established under this chapter;

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(4)
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Establishing a fee
on contracting agents to fund the board's compliance efforts;

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(5)
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Administering
workers' compensation coverage for workers under this chapter; and

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(6)
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Providing
procedures for workers to select qualified benefit providers, to change their
selections annually, and to receive notices of the right to select different
qualified benefit providers.

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-6
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Contributions.
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(a)
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Contracting
agents that have facilitated the provision of services by at least
individual workers in a consecutive twelve-month period shall contribute funds
to qualified benefit providers to provide benefits to the workers of the
contracting agents.
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The requirement to
contribute funds under this chapter shall only apply when the services are
provided to consumers located in the State.

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(b)
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The contribution amount shall be the lesser of
per cent of the total fee collected from the consumer for each transaction of
services provided or $
for every hour that the worker provided services to the consumer.
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If determined per hour, then the determination
shall be prorated per minute.

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(c)
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The contribution amount required under this section may be added to the
invoice or bill submitted to the consumer for the services.

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(d)
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Contributions shall be made to the qualified benefit provider on no less
than a monthly basis and no later than fifteen days after the end of the month
in which the services were provided.

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(e)
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Contributions shall indicate the assigned amount per worker per
transaction, according to the following:

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(1)
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If a single worker
provided services for a transaction, the entire contribution is assigned to
that worker; or

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(2)
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If multiple
workers provided services for a transaction, the contribution is assigned
proportionately to those workers.

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-7
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Qualified benefit providers.
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(a)
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Based
on the contributions received under section -6, qualified
benefit providers shall ensure that benefits are provided to workers as set
forth in this section.

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(b)
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Qualified benefit providers shall provide workers' compensation
insurance pursuant to chapter 386 to those workers entitled to benefits based
on contributions made under section -6.

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(c)
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In addition to workers' compensation
insurance, qualified benefit providers shall provide some or all of the
benefits set forth in this subsection.
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Qualified
benefit providers shall solicit input from workers on their benefits, and shall
allow workers to choose from available benefits or allocate the contributions
among the following benefits:

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(1)
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Health insurance,
including but not limited to subsidies to purchase health insurance;

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(2)
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Paid time off;

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(3)
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Retirement
benefits; and

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(4)
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Other benefits
determined by the qualified benefit providers, on behalf of the workers.

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(d)
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Qualified benefit providers shall negotiate with labor organizations
that have workers as associate members.
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Any public or private labor organization may establish an associate
member program allowing for the enrollment of workers for the purposes of
negotiating portable benefits under this chapter.

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(e)
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Qualified benefit providers may use up to
per cent of the contribution funds received for administration of benefits.

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-8
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Enrollment.
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A worker entitled to benefits under this
chapter shall select a qualified benefit provider and shall be given the option
to change that selected qualified benefit provider once per year.
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Workers shall be provided information
regarding available qualified benefit providers in a format that allows them to
easily select their chosen qualified benefit provider.

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-9
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Private cause of action.
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In addition to remedies provided by the board
to a worker for a contracting agent's noncompliance, a worker may bring a
private cause of action against a contracting agent for the contracting agent's
failure to comply with the contribution requirements under section
‑6.

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-10
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Relation to chapter 383.
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The requirements on contracting agents and
the benefits provided to workers under this chapter shall not be considered in
determinations of a worker's employment status or a contracting agent's
employment relationship to the worker under chapter 383."

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SECTION 3.
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Chapter 389, Hawaii Revised Statutes, is
amended by adding a new section to be appropriately designated and to read as
follows:

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"
�389-
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Contracted
workers.
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(a)
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Contracted workers shall be permitted to participate in the program
pursuant to rules adopted by the board determining the contribution rates for
contracted workers and the procedures for contracted workers to participate in
the program.

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(b)
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As used in this section:

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"Contracting agent"
means a business, organization, corporation, limited liability company,
partnership, sole proprietor, or any other entity that facilitates the
provision of services by contracted workers to consumers seeking the services
and makes payments to contracted workers, where the provision of services is taxed
as an independent contractor, using federal Internal Revenue Service form 1099.

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"Contracted worker"
means a person who provides services to consumers through a contracting
agent.
�
"Contracted worker"
does not include:

����
(1)
�
Any person who
contracts to solicit orders in the State as the sales representative of a
principal; or

����
(2)
�
Any person
subject to a collective bargaining agreement that specifies wages, terms, and
conditions of employment.

����
"Principal" means a
person or company engaged in the business of manufacturing, who:

����
(1)
�
Manufactures,
produces, imports, or distributes a product for wholesale;

����
(2)
�
Contracts with
a sales representative to solicit orders for the product; and

����
(3)
�
Compensates the
sales representative in whole or in part by commission.
"

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SECTION 4.
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There is appropriated out of the general
revenues of the State of Hawaii the sum of
$ or so much
thereof as may be necessary for fiscal year 2025-2026 and the same sum or so
much thereof as may be necessary for fiscal year 2026-2027 for the purpose of
this Act.

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The sums

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

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SECTION 5.
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This Act shall take effect on January 1, 2026;
provided that section 4 shall take effect on July 1, 2025.

INTRODUCED BY:

_____________________________

Report Title:

Labor;
Portable Benefits; Gig Workers; Independent Contractors; DLIR; Appropriation

Description:

Establishes
a Portable Benefits Program under the administration of a board of trustees to
provide portable benefits to gig workers.
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Expands the Hawaii Retirement Savings Program to gig workers.
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Appropriates funds.

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