RELATING TO PAID FAMILY LEAVE.

HB2360

HOUSE OF REPRESENTATIVES

H.B. NO.

2360

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

RELATING
TO PAID FAMILY LEAVE
.

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

PART I

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SECTION
1.
�
The Hawaii Revised Statutes is
amended by adding a new chapter to be appropriately designated and to read as
follows:

"
Chapter

PAID
FAMILY AND MEDICAL LEAVE

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�
‑1
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Definitions.
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As used in this chapter, unless the context
clearly requires otherwise:

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"Benefit
year" means the one-year period beginning with the first day of the
calendar week for which the individual files a valid claim for family leave
insurance benefits and medical leave insurance benefits.
�
A subsequent benefit year is the one‑year
period following a preceding benefit year, beginning either with the first:

����
(1)
�
Day of the first week of family leave and
medical leave with respect to which the individual files a subsequent claim for
family leave insurance benefits and medical leave insurance benefits; or

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(2)
�
Workday following the expiration of the
preceding benefit year if a need for family leave and medical leave for which
family leave insurance benefits and medical leave insurance benefits are
payable during the last week of the preceding benefit year continues and the
individual is eligible for further benefit payments.

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"Covered
individual" means:

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(1)
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Any person who:

���������
(A)
�
Is not a public employee and has:

�������������
(i)
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Worked for an employer for at least fourteen
weeks, during each of which the individual received remuneration in any form;
and

������������
(ii)
�
Earned wages of at least $5,040 during the
fifty-two weeks immediately prior to paid leave granted under this chapter;

���������
(B)
�
Is a public employee who elects coverage,
meets the requirements of section -13, and has:

�������������
(i)
�
Worked for the State or a political
subdivision thereof for at least fourteen weeks, during each of which the
individual received renumeration in any form; and

������������
(ii)
�
Earned wages of at least $5,040 during the
fifty-two weeks immediately prior to paid leave granted under this chapter; or

���������
(C)
�
Is self-employed, elects coverage, and meets
the requirements of section ‑13;

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(2)
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Meets the administrative requirements outlined
in this chapter and in rules adopted under this chapter; and

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(3)
�
Submits a claim.

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

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"Designated
person" means
any individual
related by blood or whose association with the covered individual is the
equivalent of a family relationship.
�
A
covered individual may choose one designated person per benefit year, and the
designated person may be identified by the covered individual at the time the
covered individual requests the leave or files a claim.

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

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"Domestic
partner" means a person at least eighteen years of age who:

����
(1)
�
Is dependent upon the covered individual for
support as shown by either unilateral dependence or mutual interdependence that
is evidenced by a nexus of factors, including but not limited to:

���������
(A)
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Common ownership of real or personal property;

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(B)
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Common householding;

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(C)
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Children in common;

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(D)
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Signs of intent to marry;

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(E)
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Shared budgeting; and

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(F)
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The length of the personal relationship with
the covered individual; or

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(2)
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Has registered as the domestic partner of the
covered individual with any registry of domestic partnerships maintained by the
employer of either party, or in any state, county, city, town, or village in
the United States.

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"Employee"
includes any individual employed by an employer.

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"Employer"
has the same meaning as defined in section 387‑1.
�
"Employer" includes the State or
counties or any political subdivision thereof.

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"Family
leave" means leave taken pursuant to section ‑2(a).

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"Family
leave insurance benefits" means the benefits provided under the terms of
this chapter to a covered individual while the covered individual is on family
leave.

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"Family
member" means:

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(1)
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A biological, adopted, or foster child;
stepchild or legal ward; a child of a domestic partner; or a child to whom the
covered individual stands in loco parentis;

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(2)
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A biological, adoptive, or foster parent;
stepparent; or legal guardian of a covered individual or a covered individual's
spouse or domestic partner or a person who stood in loco parentis when the
covered individual or the covered individual's spouse or domestic partner was a
minor child;

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(3)
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A person to whom the covered individual is
legally married under the laws of any state, or a domestic partner of a covered
individual; or

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(4)
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A grandparent, grandchild, or sibling (whether
a biological, adoptive, foster, or step relationship) of the covered individual;
the covered individual's designated person; the covered individual's spouse or
domestic partner; or the spouse or domestic partner of a covered individual's
sibling.

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"Health
care provider" means any person licensed under federal or state law to
provide medical or emergency services, including but not limited to doctors,
nurses, and emergency room personnel, or certified midwives.

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"Medical
leave" means leave taken pursuant to section ‑2(b).

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"Medical
leave insurance benefits" means the benefits provided under the terms of
this chapter to a covered individual while the covered individual is on medical
leave.

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"Next
of kin" has the same meaning as defined in section 101(17) of the
federal Family and Medical Leave Act of 1993 (29 United States Code 2611(17)).

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"Public
employee" has the same meaning as defined in section 76-11; provided that
"public employee" includes any person in the service of a
jurisdiction, regardless of whether the person is a civil service employee.

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"Qualifying
exigency" means leave based on a need arising out of a covered
individual's family member's active duty service or notice of an impending call
or order to active duty in the armed forces, including but not limited to
providing for the care or other needs of the service member's child or other
family member, making financial or legal arrangements for the service member,
attending counseling, attending military events or ceremonies, spending time
with the service member during a rest and recuperation leave or following
return from deployment, or making arrangements following the death of the
service member.

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"Qualifying
service member" means:

����
(1)
�
A member of the armed forces, including a
member of the national guard or reserves, who is:

���������
(A)
�
Undergoing medical treatment, recuperation, or
therapy;

���������
(B)
�
Otherwise in outpatient status; or

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(C)
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Is otherwise on the temporary disability
retired list for a serious injury or illness that was incurred by the member in
the line of duty on active duty in the armed forces, or a serious injury or
illness that existed before the beginning of the member's active duty and was
aggravated by service in the line of duty on active duty in the armed forces;
or

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(2)
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A former member of the armed forces, including
a former member of the national guard or reserves, who is undergoing medical
treatment, recuperation, or therapy for a serious injury or illness that was
incurred by the member in line of duty on active duty in the armed forces, or a
serious injury or illness that existed before the beginning of the member's
active duty and was aggravated by service in line of duty on active duty in the
armed forces and manifested before or after the member was discharged or released
from service.

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"Retaliatory
personnel action" means denial of any right guaranteed under this chapter,
including but not limited to any demotion, discharge, reduction of hours,
suspension, threat, or any other adverse action against an employee for the
exercise of any right guaranteed in this chapter, or reporting or threatening
to report an employee's suspected citizenship or immigration status or the
suspected citizenship or immigration status of a family member of the employee
to a federal or state agency.
�

"Retaliatory personnel action" includes interference with or
punishment for, in any manner, participating in or assisting an investigation,
proceeding, or hearing under this chapter.

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"Serious
health condition" is an illness, injury, impairment, pregnancy, recovery
from childbirth, organ donation, termination of pregnancy, or physical or
mental condition that involves inpatient care in a hospital, hospice, or
residential medical care facility, or continuing treatment by a health care
provider.

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"State
average weekly wage" has the same meaning as defined in section 386-1.

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"Wages"
means all remuneration for services from whatever source, including
commissions, bonuses, tips or gratuities received in the course of employment
from others than the employer to the extent that they are customary and
expected in that type of employment and reported to the employer for payroll
tax deduction purposes, and the cash value of all remuneration in any medium
other than cash.
�
The director may adopt
rules for the reasonable determination of the cash value of remuneration in any
medium other than cash.
�
The director
shall adopt rules regarding the determination of wages for those who elect
coverage pursuant to section -13.
�
"Wages" does not include the amount
of any payment specified in section 383-11.

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‑2
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Eligibility for benefits.
�
(a)
�

Beginning January 1, 2030, family leave insurance benefits shall be
payable to an individual who:

����
(1)
�
Qualifies as a covered individual; and

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(2)
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Meets one of the following requirements:

���������
(A)
�
Because of birth, adoption, or placement
through foster care, is caring for a new child during the first year after the
birth, adoption, or placement;

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(B)
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Is caring for a family member with a serious
health condition;

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(C)
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Is caring for a qualifying service member who
is the individual's next of kin;

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(D)
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Is a victim of domestic abuse, sexual assault,
or stalking who needs leave for medical attention; mental health care or other
counseling; victim services, including legal services; court appearances; or
relocation for themselves or a family member; or

���������
(E)
�
Has a qualifying exigency.

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(b)
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Beginning January 1, 2030, medical leave
insurance benefits shall be payable to an individual who:

����
(1)
�
Qualifies as a covered individual; and

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(2)
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Has a serious health condition that makes the
covered individual unable to perform the functions of the covered individual's
position, except accident or disease connected with or resulting from
employment as described in section 386-3 or any other applicable workers'
compensation law.

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‑3
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Duration of benefits.
�
(a)
�

The maximum number of weeks during which family leave insurance benefits
are payable in a benefit year shall be twelve weeks.

����
(b)
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The maximum number of weeks during which
medical leave insurance benefits are payable in a benefit year shall be
twenty-six weeks.

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(c)
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The first payment of benefits shall be made
to a covered individual within two weeks after the family leave and medical
leave claim is filed or the family leave and medical leave begins, whichever is
later, and subsequent payments shall be made every two weeks thereafter.
�
The department shall notify the claimant of
any additional information required to complete or cure their claim within five
business days of filing a claim.

����
(d)
�
Claims may be filed up to forty-five days in
advance of the family leave and medical leave, if anticipation of the family
leave and medical leave is possible.
�

Claims shall be filed within ninety days after the commencement of the
need for family leave and medical leave or as soon thereafter as may be
reasonable.

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‑4
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Amount of benefits.
�
(a)
�

Subject to the maximum weekly benefit amount pursuant to subsection (b),
the weekly benefit shall be calculated by adding the amounts obtained by
applying the following percentage to a covered individual's average weekly wage
during the twelve months preceding submission of the claim or the average
weekly wage during the time the covered individual worked, if less than twelve
months:

����
(1)
�
Ninety per cent of wages that are equal to or
less than fifty per cent of the state average weekly wage;

����
(2)
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Sixty-six per cent of wages that exceed fifty
per cent of the state average weekly wage but are no more than one hundred per
cent of the state average weekly wage; and

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(3)
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Fifty-five per cent of wages that exceed one
hundred per cent of the state average weekly wage.

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(b)
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In no case shall the weekly benefit amount
exceed the state average weekly wage.

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(c)
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Family leave insurance benefits and medical
leave insurance benefits shall not be payable to the covered individual until
the individual accumulates at least eight hours of family leave insurance
benefits and medical leave insurance benefits.

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‑5
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Contributions.
�
(a)
�

Payroll contributions shall be authorized to finance the payment of
benefits under, and for the administration and operation of, the family and
medical leave insurance program.

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(b)
�
Beginning January 1, 2029, payroll
contributions shall be paid by employers and employees in amounts to be
determined by the department, based on a percentage of employee wages.
�
The department shall evaluate and determine
on an annual basis the amount of payroll contributions necessary to finance the
family and medical leave insurance program.

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(c)
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An employer may deduct and withhold
contributions from each employee of up to fifty per cent of the amount of the
payroll contribution determined by the department.

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(d)
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An employer having thirty or more employees
shall remit one hundred per cent of the amount of the payroll contribution
determined by the department to the family and medical leave trust fund.

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(e)
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An employer having fewer than thirty
employees shall remit fifty per cent of the amount of the payroll contribution
determined by the department to the family and medical leave trust fund.

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(f)
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A self-employed individual who is electing
coverage under section ‑13 shall remit fifty per cent
of the amount of the payroll contribution determined by the department to the
family and medical leave trust fund.

����
(g)
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Notwithstanding any provision of this chapter
to the contrary, a public employee who has not elected coverage pursuant to
section -13 shall not be required to pay payroll
contributions, and the employer of a public employee who has not elected
coverage pursuant to section -13 shall not be required
to pay payroll contributions on behalf of that public employee.

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‑6
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Reduced leave schedule.
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(a)
�
A
covered individual shall be entitled, at the option of the covered individual,
to take paid family leave and medical leave on an intermittent or reduced leave
schedule.
�
Family leave insurance
benefits and medical leave insurance benefits for intermittent or reduced leave
schedules shall be prorated.

����
(b)
�
To the extent practicable, the covered
individual shall provide the employer with prior notice of the schedule upon
which the covered individual will be taking the leave.
�
Paid family leave and medical leave taken
under this section shall not result in a reduction of the total amount of leave
to which an employee is entitled beyond the amount of leave actually taken.

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(c)
�
Nothing in this section shall be construed to
entitle a covered individual to more leave than allowed under section
‑3.

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‑7
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Leave and employment protection.
�
(a)
�

Any covered individual who exercises the covered individual's right to
family leave insurance benefits or medical leave insurance benefits shall be
entitled upon the expiration of that leave to be restored by the employer to
the position held by the covered individual when the leave commenced, or to a
position with equivalent seniority, status, employment benefits, pay, and other
terms and conditions of employment, including fringe benefits and service
credits that the covered individual had been entitled to at the commencement of
leave; provided that job duties and hours in the new position need not be
identical to the previously held position; provided further that, at the employee's
request, the employer shall make a reasonable effort to make the job duties and
hours similar.

����
(b)
�
During any medical leave taken pursuant to
section ‑2, the employer shall maintain any health care
benefits the covered individual had before taking the leave, to the extent
provided under section 393-15.

����
(c)
�
During any family leave taken pursuant to
section ‑2, the employer shall maintain any health care
benefits the covered individual had before taking the leave for the duration of
the leave as if the covered individual had continued in employment continuously
from the date the covered individual commenced the leave until the date the
family leave insurance benefits terminate; provided that the covered individual
shall continue to pay the covered individual's share of the cost of health
benefits as required before the commencement of the leave.

����
(d)
�
Nothing in this section shall be construed to
conflict with chapter 393, title 29 United States Code section 1144 (b)(5)(A),
or to modify chapter 393.

����
(e)
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This section shall be enforced as provided in
chapter 398.

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‑8
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Retaliatory personnel actions prohibited.
�
(a)
�
It
shall be unlawful for an employer or any other person to interfere with,
restrain, or deny the exercise of, or the attempt to exercise, any right
protected under this chapter.

����
(b)
�
No employer, temporary help company,
employment agency, employee organization, or other person shall take a retaliatory
personnel action or otherwise discriminate against a person because the person
exercised rights protected under this chapter.
�

These rights include the right to:

����
(1)
�
Request, file for, apply for, or use benefits
or leave provided for under this chapter;

����
(2)
�
Communicate to the employer or any other
person or entity an intent to file a claim, a complaint with the department or
courts, or an appeal;

����
(3)
�
Testify, plan to testify, or assist in any
investigation, hearing, or proceeding under this chapter, at any time,
including during the period in which the person receives family leave insurance
benefits and medical leave insurance benefits under this chapter;

����
(4)
�
Inform any person about any employer's alleged
violation of this chapter; and

����
(5)
�
Inform any other person of the other person's
rights under this chapter.

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(c)
�
It shall be unlawful for an employer's
absence control policy to count paid family leave or medical leave taken under
this chapter as an absence that may lead to or result in discipline, discharge,
demotion, suspension, or any other adverse action.

����
(d)
�
Protections of this section shall apply to
any person who mistakenly, but in good faith, alleges violations of this
chapter.

����
(e)
�
This section shall be enforced as provided in
chapter 398.

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‑9
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Coordination of benefits.
�
(a)
�

Leave taken with wage replacement under this chapter that also qualifies
as leave under the federal Family and Medical Leave Act of 1993 or chapter 398
shall run concurrently with leave taken under the federal Family and Medical
Leave Act of 1993 or chapter 398.

����
(b)
�
An employer may require that payment made
pursuant to this chapter be made concurrently or otherwise coordinated with
payment made or leave allowed under the terms of disability or family care
leave under a collective bargaining agreement or employer policy.
�
The employer shall give employees written
notice of this requirement.

����
(c)
�
This chapter does not diminish an employer's
obligation to comply with any of the following that provide more generous
leave:

����
(1)
�
A collective bargaining agreement;

����
(2)
�
An employer policy; or

����
(3)
�
Any other applicable law.

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(d)
�
An individual's right to leave under this
chapter shall not be diminished by a collective bargaining agreement entered
into or renewed, or an employer policy adopted or retained, after the effective
date of this chapter.
�
Any agreement by
an individual to waive the individual's rights under this chapter shall be void
as against public policy.

����
(e)
�
Under
no circumstances shall an employee be required to use, exhaust, or substitute
any accrued vacation leave, sick leave, or other paid time off prior to or
while receiving family leave insurance benefits or medical leave insurance
benefits under this chapter; provided that an employee may elect to substitute
or use any accrued vacation leave, sick leave, or other paid time off while
receiving family leave insurance benefits or medical leave insurance benefits
under this chapter or paid leave pursuant to section 398-4.
�
If the accrued vacation leave, sick leave, or
other paid time off is compensated at the rate of an employee's usual pay, the
employee shall not simultaneously receive family leave insurance benefits and
medical leave insurance benefits under this chapter.
�
If the accrued vacation leave, sick leave, or
other paid time off is compensated at less than the employee's usual pay, the
employee shall be eligible to simultaneously receive family leave insurance
benefits or medical leave insurance benefits; provided that the aggregate
amount the employee would receive does not exceed the employee's average weekly
wage used by the department to calculate family leave insurance benefits and
medical leave insurance benefits.
�

Nothing in this subsection shall require an employee to receive or use
additional vacation leave, sick leave, or paid time off as described in this
section.

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‑10
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Notice.
�

(a)
�
Each employer shall provide
written notice to each employee upon hiring and annually thereafter.
�
An employer shall also provide written notice
to an employee when the employee requests leave under this chapter, or when the
employer acquires knowledge that an employee's leave may be for a qualifying
reason under section ‑2(a)(2).
�
The notice shall include:

����
(1)
�
The employee's right to family
leave insurance benefits
and medical
leave insurance benefits under this chapter and the terms under which the
benefits may be used;

����
(2)
�
The amount of family
leave insurance benefits
and medical leave insurance benefits to
which the employee is entitled;

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(3)
�
The procedure for filing a claim for benefits;

����
(4)
�
The procedure for selecting a designated
person;

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(5)
�
The right to employment protection and
benefits continuation under section ‑7;

����
(6)
�
A disclosure that discrimination and
retaliatory personnel actions against a person for requesting, applying for, or
using family
leave insurance benefits
and
medical leave insurance benefits are prohibited under section
‑8; and

����
(7)
�
A disclosure that the employee has a right to
file a complaint for violations of this chapter.

����
(b)
�
An employer shall display and maintain a
poster, in a conspicuous place accessible to employees at the employer's place
of business, that presents, in English, Ilocano, Japanese, Tagalog, and any
language that is the first language spoken by at least five per cent of the
employer's workforce, the information required by this section; provided that
the notice has been provided by the department.
�

The director may adopt rules to establish additional requirements
concerning the means by which employers shall provide this notice.

����
(c)
�
Employees shall provide notice to their
employers as soon as practicable of their intention to take leave under this
chapter.

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�
‑11
�
Appeals.
�

(a)
�
The director shall establish
a system for appeals in the case of a denial of family leave insurance benefits
or medical leave insurance benefits.
�
In
establishing the system, the director may utilize any procedures and appeals
mechanisms established under section 383‑38.

����
(b)
�
Judicial review of any decision with respect
to family leave insurance benefits and medical leave insurance benefits shall
be permitted in a court of competent jurisdiction after an aggrieved party has
exhausted all administrative remedies established by the director.

����
(c)
�
The director shall implement procedures to
ensure the confidentiality of all information related to any claims filed or
appeals taken to the maximum extent permitted by applicable laws.

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�
‑12
�
Erroneous payments and disqualifications for
benefits.
�
(a)
�
A covered individual shall be disqualified
from family leave insurance benefits and medical leave insurance benefits for
one year if the individual is determined by the director to have knowingly and
wilfully made a false statement or misrepresentation regarding a material fact,
or knowingly and wilfully failed to report a material fact, to obtain benefits
under this chapter.

����
(b)
�
If family leave insurance benefits or medical
leave insurance benefits are paid erroneously or as a result of
misrepresentation, or if a claim for family leave insurance benefits or medical
leave insurance benefits is rejected after benefits are paid, the department
may seek repayment of benefits and penalties from the recipient.
�
The amount of any penalty assessed shall not
be greater than one hundred fifty per cent of the amount of benefits paid
erroneously to the recipient.
�
The
director shall exercise the director's discretion to waive, in whole or in
part, the amount of any payments and penalties where the recovery would be
against equity and good conscience.

����
�
‑13
�
Elective coverage; self-employed persons;
public employees.
�
(a)
�
A:

����
(1)
�
Self-employed person, including a sole
proprietor, partner, or joint venturer; or

����
(2)
�
A public employee,

may elect coverage under this chapter for an initial
period of no less than three years.
�
The
self-employed person or public employee shall file a notice of election in
writing with the director, as required by the department.
�
The election shall become effective on the
date of filing the notice.
�
As a condition
of election, the self-employed person or public employee shall agree to supply
any information concerning income that the department deems necessary.

����
(b)
�
A self-employed person or public employee who
has elected coverage may withdraw from coverage within thirty days after the
end of the three-year period of coverage, or at other times as the director may
prescribe by rule, by filing written notice with the director.
�
The withdrawal shall take effect no sooner
than thirty days after filing the notice.

����
(c)
�
Notwithstanding any other law to the
contrary, nothing in this chapter shall be deemed to affect the civil service
or exempt status, salary range, vacation, sick leave, service credit, or other
right or privilege of any public worker, except to the extent provided in
section -9 or as otherwise expressly provided in this chapter.

����
�
‑14
�
Family and medical leave insurance program.
�
(a)
�
By
January 1, 2029, the department shall establish and administer a family and
medical leave insurance program and begin collecting contributions as specified
in this chapter.
�
By January 1, 2030, the
department shall begin receiving claims and paying family leave insurance
benefits and medical leave insurance benefits as specified in this chapter.

����
(b)
�
The department shall establish reasonable
procedures and forms for filing claims for benefits under this chapter and
shall specify the necessary supporting documentation to support a claim for
benefits, including any documentation required from a health care provider for
proof of a serious health condition and any documentation required by the
department to meet the eligibility requirements for family leave.

����
(c)
�
The department shall notify the employer
within five business days of a claim being filed pursuant to this chapter.

����
(d)
�
The department shall use information sharing
and integration technology to facilitate the disclosure of relevant information
or records so long as the covered individual consents to the disclosure as
required under state law.

����
(e)
�
Information contained in the files and
records pertaining to a covered individual under this chapter shall be
confidential and not open to public inspection, other than to public employees
in the performance of their official duties; provided that the individual or an
authorized representative of an individual may review the records or receive
specific information from the records upon the presentation of the individual's
signed authorization.

����
(f)
�
The director shall adopt rules pursuant to
chapter 91 as necessary to implement this chapter.

����
�
‑15
�
Federal and state income tax.
�
(a)
�
To
the extent that family leave insurance benefits and medical leave insurance
benefits under this chapter are subject to federal income tax, the department
shall advise a covered individual filing a new claim for family leave insurance
benefits or medical leave insurance benefits wholly or partially subject to
federal income tax, at the time of filing the claim, that:

����
(1)
�
The Internal Revenue Service has determined
that family leave insurance benefits or medical leave insurance benefits may be
subject to federal income tax;

����
(2)
�
Requirements exist pertaining to estimated tax
payments;

����
(3)
�
The covered individual may elect to have
applicable federal income tax deducted and withheld from the covered
individual's payment of benefits in the amount specified in the Internal
Revenue Code of 1986, as amended; and

����
(4)
�
The covered individual is permitted to change
a previously elected withholding status.

����
(b)
�
Family leave insurance benefits and medical
leave insurance benefits under this chapter shall not be subject to state
income tax.

����
�
‑16
�
Family and medical leave trust fund.
�
(a)
�

There is established in the treasury of the State as a trust fund,
separate and apart from all public moneys or funds of the State, a family and
medical leave trust fund, which shall be administered by the department
exclusively for the purposes of this chapter.
�

All contributions made pursuant to this chapter shall be paid into the
trust fund and all benefits payable pursuant to this chapter shall be paid from
the trust fund.
�
All moneys in the trust
fund shall be mingled and undivided.

����
(b)
�
Whenever, in the judgment of the director of
finance, there shall be in the trust fund an amount of funds in excess of the
amount deemed by the director of finance to be sufficient to meet the current
expenditures properly payable therefrom, the director of finance may invest,
reinvest, manage, contract, or sell or exchange investments acquired with the
excess funds in the manner prescribed by law.

����
(c)
�
On January 1, 2027, or as soon as possible
thereafter, the director of finance shall transfer
$ from the general
fund to the family and medical leave trust fund as a loan to cover the start-up
costs of administering this chapter before and during the first year of payroll
contributions.
�
Costs may include hiring
and employing personnel to perform functions relating to the establishment and
administration of the family and medical leave trust fund,
project administration and outreach, and
procurement of information technology and data systems to develop and implement
the administrative infrastructure necessary to implement this chapter.
�
All contracting shall be done in accordance
with state law with regard to procurement of services from an outside vendor.

����
(d)
�
No later than December 31, 2031, the
department shall repay the loan of
$ received pursuant
to subsection (c).

����
�
-17
�
Reports.
�

No later than April 1, 2031, and by April 1 each year thereafter,
the department shall submit a report to the legislature on projected and actual
participation in the family and medical leave insurance program.
�
The report shall include for the prior year:

����
(1)
�
Premium rates;

����
(2)
�
An accounting and current balance of the
family and medical leave trust fund;

����
(3)
�
A description of any outreach efforts and
public education campaigns held pursuant to section -18; and

����
(4)
�
Depersonalized data on program participants,
including:

���������
(A)
�
The number of persons claiming eligibility for
the program under each criterion in section ‑2(a)(2);

���������
(B)
�
The gender or gender identity of program
beneficiaries; and

���������
(C)
�
For leaves taken under section -2(a)(2)(B),
the relation of the family member for whom leave was taken to provide care.

����
�
‑18
�
Public education.
�
The department shall conduct a public
education campaign to inform employees and employers regarding the availability
of family leave insurance benefits and medical leave insurance benefits.
�
Outreach information shall be available in
English, Ilocano, Chuukese, Marshallese, Tagalog, Spanish, and other languages
spoken by more than five per cent of the students in the department of
education's English learner program.

����
�
‑19
�
Sharing technology.
�
The department may use state data collection
and technology, to the extent possible, to integrate the program with existing
state policies."

����
SECTION 2.
�
No later than January 1, 2028, the department
of labor and industrial relations shall:

����
(1)
�
Adopt all rules pursuant to chapter 91, Hawaii
Revised Statutes, as necessary for implementation of this part; and

����
(2)
�
Establish policies, procedures, and any
necessary forms for a public employee to elect coverage and withdraw from
coverage pursuant to section -13, Hawaii Revised Statutes.

PART II

����
SECTION
3
.
�
Subpart B of part VI of chapter 378, Hawaii
Revised Statutes, is repealed.

����
SECTION
4
.
�
Chapter 392, Hawaii Revised Statutes, is
repealed.

PART III

����
SECTION
5
.
�
Section 41D-2, Hawaii Revised Statutes, is
amended by amending subsection (a) to read as follows:

����
"
(a)
�
The comptroller, through the risk manager,
shall:

����
(1)
�
Have discretion to purchase casualty insurance
for the State or state agencies, including those employees of the State who, in
the comptroller's discretion, may be at risk and shall be responsible for the
acquisition of all casualty insurance;

����
(2)
�
Have discretion to purchase property insurance
for the State or state agencies and shall acquire all property insurance;

����
(3)
�
Direct and manage all risk management and
insurance programs of the State, except for employee benefits insurance and
workers' compensation insurance programs or as otherwise provided in chapters
87A, 88, 383 to 386A, [
392,
] and 393;

����
(4)
�
Consult with state agencies to determine what
property, casualty, and other insurance policies are presently in force or are
sought by the state agencies and to make determinations about whether to
continue subscribing to insurance policies.
�

In the event that the risk manager's determination is not satisfactory
to the state agency, the state agency may have the risk manager's decision
reviewed by the comptroller.
�
In this
case, the comptroller's decision shall be final;

����
(5)
�
Consolidate and combine state insurance
coverages, and purchase excess insurance when, in the comptroller's discretion,
it is appropriate to do so;

����
(6)
�
Acquire risk management, investigative, claims
adjustment, actuarial, and other services, except attorney's services, as may
be required for the sound administration of this chapter; provided that a
broker submitting a proposal in response to a fixed fee solicitation by the
comptroller pursuant to this subsection and the broker's performance of the
activities in accordance with the proposal shall not constitute a violation of
sections 431:10-218, 431:13‑102, and 431:13-103;

����
(7)
�
Gather from all state agencies and maintain
data regarding the State's risks and casualty, property, and fidelity losses;

����
(8)
�
In conjunction with the attorney general and
as otherwise provided by this chapter, compromise or settle claims cognizable
under chapter 662;

����
(9)
�
Provide technical services in risk management
and insurance to state agencies;

���
(10)
�
Be authorized to establish a captive insurance
company pursuant to article 19 of chapter 431 to effectuate the purposes of
this chapter; and

���
(11)
�
Do all other things appropriate to the
development of sound risk management practices and policies for the
State."

����
SECTION 6.
�
Section 103D-310, Hawaii Revised Statutes, is
amended by amending subsection (c) to read as follows:

����
"(c)
�
All offerors, upon award of contract, shall
comply with all laws governing entities doing business in the State, including
chapters 237, 383, 386, [
392,
] and 393.
�

Offerors shall produce documents to the procuring officer to demonstrate
compliance with this subsection.
�
Any
offeror making a false affirmation or certification under this subsection shall
be suspended from further offerings or awards pursuant to section 103D-702.
�
The procuring officer shall verify compliance
with this subsection for all contracts awarded pursuant to sections 103D-302,
103D-303, 103D-304, and 103D-306, and for contracts and procurements of $2,500
or more awarded pursuant to section 103D-305; provided that the attorney
general may waive the requirements of this subsection for contracts for legal
services if the attorney general certifies in writing that comparable legal
services are not available in this State."

����
SECTION 7.
�
Section 302D-26, Hawaii Revised Statutes, is
amended by amending subsection (b) to read as follows:

����
"(b)
�
The State shall afford administrative,
support, and instructional employees in charter schools full participation in
the State's systems for retirement, workers' compensation, unemployment
insurance, [
temporary disability insurance,
]
paid family and medical
leave,
and health benefits in accordance with the qualification
requirements for each."

����
SECTION 8.
�
Section 373L-2, Hawaii Revised Statutes, is
amended by amending subsection (b) to read as follows:

����
"(b)
�
Registration information required by this
section shall include:

����
(1)
�
The name or names
under which the professional employer organization conducts or will conduct
business;

����
(2)
�
The address of the
principal place of business of the professional employer organization and the
address of each office that the professional employer organization maintains in
this State;

����
(3)
�
The professional
employer organization's general excise tax number;

����
(4)
�
A copy of the
certificate of authority to transact business in this State issued by the
director of commerce and consumer affairs pursuant to title 23 or title 23A, if
applicable;

����
(5)
�
A list, organized
by jurisdiction, of each name under which the professional employer
organization has operated in the preceding five years, including any
alternative names; names of predecessors; and, if known, names of successor
business entities;

����
(6)
�
A statement of
ownership, which shall include the name of each person who, individually or
acting in concert with any other person or persons, owns or controls, directly
or indirectly, twenty-five per cent or more of the equity interests of the
professional employer organization;

����
(7)
�
A statement of
management, which shall include the name of any person who serves as president
or chief executive officer or who otherwise has the authority to act as a
senior executive officer of the professional employer organization;

����
(8)
�
Proof of valid
workers' compensation coverage in compliance with all laws of this State;

����
(9)
�
Proof of
compliance with [
the Hawaii temporary disability insurance law;
]
chapter
;

���
(10)
�
Proof of
compliance with the Hawaii prepaid health care act;

���
(11)
�
Proof of
compliance with the Hawaii employment security law, including payment of any
applicable employer liability pursuant to chapter 383;

���
(12)
�
The
name, address, and phone number of the financial institution utilized by the
professional employer organization for payroll purposes that operates and
maintains branches in the State;

���
(13)
�
The name of each
client company that is party to a professional employer agreement with a
professional employer organization which shall be provided to the department on
a form approved by the department within twenty-one business days of the
initiation of the agreement and within twenty-one business days of the
termination of the agreement; and

���
(14)
�
A copy of the
Internal Revenue Service Form W-3, Transmittal of Wage and Tax Statements, that
was most recently filed with the federal government, and which shall be used
for obtaining a bond or irrevocable letter of credit pursuant to section
373L-3."

����
SECTION 9.
�
Section 373L-6, Hawaii Revised Statutes, is
amended to read as follows:

����
"
[
[
]�373L-6[
]
]
�
Responsibility of professional employer
organizations.
�
During
the term of the agreement between a professional employer organization and its
client company, the professional employer organization shall be deemed the
employer for all covered employees for purposes of complying with all laws
relating to unemployment insurance, workers' compensation, [
temporary
disability insurance,
]
paid family and medical leave,
and prepaid
health care coverage and the professional employer organization shall provide
written notification to each covered employee of this responsibility.
"

����
SECTION 10.
�
Section 393‑3, Hawaii Revised Statutes,
is amended by amending the definition of "wages" to read as follows:

����
""Wages"
means all remuneration for services from whatever source, including
commissions, bonuses, and tips and gratuities paid directly to any individual
by a customer of the individual's employer, and the cash value of all
remuneration in any medium other than cash.

����
The
director may issue [
regulations
]
rules
for the reasonable
determination of the cash value of remuneration in any medium other than cash.

����
If the
employee does not account to the employee's employer for the tips and
gratuities received and is engaged in an occupation in which the employee
customarily and regularly receives more than $20 a month in tips, the combined
amount received by the employee from the employee's employer and from tips
shall be deemed to be at least equal to the wage required by chapter 387 or a
greater sum as determined by regulation of the director.

����
"Wages"
does not include the amount of any payment specified in section 383‑11 [
or
392‑22
] or chapter 386."

����
SECTION
11.
�
Section 398-1, Hawaii Revised
Statutes, is amended by amending the definition of "sick leave" to
read as follows:

����
""Sick leave":

����
(1)
�
Means
accrued increments of compensated leave provided by an employer to an employee
for use by the employee for any of the following reasons:

���������
(A)
�
The employee is physically or mentally unable
to perform the employee's duties due to illness, injury, or a medical condition
of the employee;

���������
(B)
�
The absence is for the purpose of obtaining
professional diagnosis or treatment for a medical condition of the employee; or

���������
(C)
�
The absence is for other medical reasons of
the employee, such as pregnancy or obtaining a physical examination; and

����
(2)
�
Shall
not include any insurance benefit, workers' compensation benefit, unemployment
compensation due to illness or disability, or [
temporary disability
]
medical
leave
insurance benefit.
"

����
SECTION 12.
�
Section 398‑4, Hawaii Revised Statutes,
is amended by amending subsection (c) to read as follows:

����
"(c)
�
An employer who provides sick leave for
employees shall permit an employee to use the employee's accrued and available
sick leave for purposes of this chapter[
; provided that an employee shall
not use more than ten days per year for this purpose, unless an express
provision of a valid collective bargaining agreement authorizes the use of more
than ten days of sick leave for family leave purposes.
�
Nothing in this section shall require an
employer to diminish an employee's accrued and available sick leave below the
amount required pursuant to section 392-41; provided that any sick leave in
excess of the minimum statutory equivalent for temporary disability benefits as
determined by the department may be used for purposes of this chapter
]."

����
SECTION 13.
�
Section 431:10‑244, Hawaii Revised
Statutes, is amended to read as follows:

����
"
�431:10‑244
�
Filing procedure for contracts approved by
commissioner.
�
Each insurance
contract requiring approval by the commissioner pursuant to this code[
,
section 392‑48,
] or section 386‑124 and each contract
certified by the insurer to be in conformity with this code shall be
accompanied by a $20 fee payable to the commissioner, which shall be deposited
into the commissioner's education and training fund."

PART IV

����
SECTION 14.
�
Section 378‑71, Hawaii Revised
Statutes, is amended by repealing the definition of "health care
provider".

����
["
"Health
care provider" means a physician as defined under section 386-1.
"]

PART V

����
SECTION
15.
�
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 2026-2027 to be deposited into the
family and medical leave trust fund as a loan pursuant to section
-16(c), Hawaii Revised Statutes.

����
SECTION
16.
�
There is appropriated out of the
family and medical leave trust fund the sum of
$ or so much
thereof as may be necessary for fiscal year 2026-2027 to cover the start-up
costs of administering the family and medical leave insurance program pursuant
to section -16(c), Hawaii Revised Statutes.

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

PART VI

����
SECTION 17.
�
Statutory material to be repealed is
bracketed and stricken.
�
New statutory
material is underscored.

����
SECTION 18.
�
This Act shall take effect on July 1, 2026;
provided that parts II, III, and IV shall take effect on the earlier of January
1, 2030, or the start of the department of labor and industrial relations
receiving claims and paying family leave insurance benefits and medical leave
insurance benefits as specified under chapter , Hawaii
Revised Statutes, as enacted by this Act.

INTRODUCED BY:

_____________________________

Report Title:

DLIR;
Family Leave; Medical Leave; Insurance Program; Benefits

Description:

By
1/1/2029, requires the Department of Labor and Industrial Relations to
establish a family and medical leave insurance program and begin collecting
payroll contributions to finance payment of benefits.
�
By 1/1/2030, requires the Department to begin
receiving claims and paying benefits under the program.
�
Specifies eligibility requirements and employee
protections under the program.

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