RELATING TO PREVAILING WAGES.

HB887

HOUSE OF REPRESENTATIVES

H.B. NO.

887

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

relating
to prevailing wages
.

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

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SECTION
1.
�
The legislature finds that Hawaii provides
prevailing wage protections for one hundred thirty-one unique job
classifications, all of which are traditionally male-dominated occupations, for
State-funded contracts.
�
The legislature
further finds that in contrast, when the State awards contracts for human
services providers, most of whom are female, it does not set prevailing wages
for those professionals.
�
The legislature
also finds that this disparity affects the economic security of these workers
and the quality and continuity of care for Hawaii's children, elderly,
individuals exiting the carceral system, individuals with disabilities, and
individuals with mental health challenges.

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Therefore,
the purpose of this Act is to promote equity and stability in Hawaii by establishing
prevailing wage protections for human services providers hired through
contracts with the State.

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

"
Chapter

WAGES AND
HOURS OF

HUMAN
SERVICES PROVIDERS

CONTRACTED
BY THE STATE OR COUNTIES

PART I.
�

GENERAL PROVISIONS

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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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"Basic hourly rate" means
the hourly wage paid to a human services provider for work performed during
nonovertime hours, but shall not include the cost to an employer of furnishing fringe
benefits, whether paid directly or indirectly to the human services provider as
provided in the definition of "wages".

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"Contractor" means any
person furnishing human services under a contract with a governmental
contracting agency, subcontractor, or any other person under a subcontract
arrangement with any person who has a contract subject to this chapter.

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"County"
means the city and county of Honolulu, county of Hawaii, county of Kauai, and
county of Maui.

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

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

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"Governmental contracting agency"
means the State, any county and any officer, bureau, board, commission, or
other agency or instrumentality thereof.

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"Human
services" includes social work, case work, and investigative services
intended to improve the lives of individuals and families by, among other
duties, evaluating an individual's needs, creating a treatment plan for the
individual, implementing the plan, and providing emotional support.

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"Human
services provider" includes a social worker, case worker, or investigator
employed by a private organization providing human services under a contract
with a governmental contracting agency.

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"Overtime compensation"
means compensation based on not less than one and one-half times the human
services providers' basic hourly rate of pay plus the cost to an employer of
furnishing a human services provider with fringe benefits as described in the
definition of "wages"; provided that if the department determines
that a prevailing wage is defined by a collective bargaining agreement, the
overtime compensation shall be at the rates set by the applicable collective
bargaining agreement.

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"Wages",
"rate of wages", "wage rates", "minimum wages"
and "prevailing wages" mean the basic hourly rate and the cost to an
employer of furnishing a human services provider with fringe benefits,
including but not limited to health and welfare benefits, vacation benefits,
and pension benefits, whether paid directly or indirectly to the human services
provider.

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� -2
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Applicability; wages, hours, and other
requirements.
�
(a)
�
This chapter shall apply to every contract in
excess of $2,000 for human services to which a governmental contracting agency
is a party.

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For the purposes of this subsection:

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"Contract" includes but is
not limited to any agreement, purchase order, or voucher in excess of $2,000
for human services.

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"Governmental contracting agency"
includes:

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(1)
�
Any person or
entity that causes either directly or indirectly the provision of human
services; and

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(2)
�
Any public-private
partnership.

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"Party" includes eligible
bidders for the provision of human services.

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(b)
�

Every human services provider performing work pursuant to this chapter
shall be paid no less than prevailing wages; provided that:

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(1)
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The prevailing
wages shall be established by the director as the sum of the basic hourly rate
and the cost to an employer of providing a human services provider with fringe
benefits.
�
In making prevailing wage
determinations, the following shall apply:

���������
(A)
�
The director shall
make separate findings of:

�������������
(i)
�
The basic hourly
rate; and

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(ii)
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The rate of
contribution or cost of fringe benefits paid by the employer when the payment
of the fringe benefits by the employer constitutes a prevailing practice.
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The cost of fringe benefits shall be
reflected in the wage rate scheduled as an hourly rate; and

���������
(B)
�
The rates of wages
that the director shall regard as prevailing in each corresponding
classification of human services providers shall be the rate of wages paid to
the greatest number of those employed in the State, the modal rate, in the
corresponding classes of human services provider in circumstances that are
similar to the contract work;

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(2)
�
Except for the
prevailing wages established by subsections (h) and (i), the prevailing wages
shall be not less than the wages payable under federal law to corresponding
classes of human services providers employed in the State that are prosecuted
under contract or agreement with the government of the United States; and

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(3)
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Notwithstanding
the provisions of the original contract, the prevailing wages shall be
periodically adjusted during the performance of the contract in an amount equal
to the change in the prevailing wage as periodically determined by the
director.

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(c)
�

No human services provider employed pursuant to this chapter by the
State or any county shall be permitted or required to work on Saturday, Sunday,
or a legal holiday of the State or in excess of eight hours on any other day
unless the human services provider receives overtime compensation for all hours
worked on Saturday, Sunday, and a legal holiday of the State or in excess of
eight hours on any other day.
�
The rate
for overtime compensation and any other premium rates of pay shall be those
rates specified in an applicable collective bargaining agreement when the basic
hourly rate is established by a collective bargaining agreement.

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For purposes of determining overtime
compensation under this subsection, the basic hourly rate of any human services
provider shall not be less than the basic hourly rate determined by the
director to be the prevailing basic hourly rate for corresponding classes of human
services providers in similar circumstances in the State.

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(d)
�

The contractor or the contractor's subcontractor shall pay all human
services providers that it employs, unconditionally and not less often than
once a week, and without deduction or rebate on any account, except as allowed
by law, the full amounts of their wages including overtime, accrued to not more
than five working days prior to the time of payment, at wage rates not less
than those deemed to be prevailing, regardless of any contractual relationship that
may be alleged to exist between the contractor or subcontractor and the human
services providers.
�
The rates of wages
to be paid shall be posted by the contractor in a prominent and easily
accessible place, and a copy of the rates of wages required to be posted shall
be given to each human services provider employed under the contract by the
contractor at the time each human services provider is employed, except that
where there is a collective bargaining agreement, the contractor does not have
to provide the contractor's employees the wage rate schedules.

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(e)
�

The governmental contracting agency may withhold from the contractor so
much of the accrued payments as the governmental contracting agency may
consider necessary to pay to the human services providers employed by the
contractor or any subcontractor the difference between the prevailing wages and
the wages received and not refunded by the human services providers.

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(f)
�

Every contract in excess of $2,000 for human services and the
specifications for such contract shall include provisions that set forth the
requirements of subsections (a) to (e); provided that failure by the
contracting agency to include those provisions in the contract or
specifications shall not be a defense of the contractor or subcontractor for
noncompliance with the requirements of this chapter.

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(g)
�

For any provision of human services that is subject to this chapter but
not directly caused by a governmental contracting agency, the director shall be
responsible for enforcement of this chapter, including the collection and
maintenance of certified copies of all payrolls that are subject to this
chapter.

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(h)
�

When:

����
(1)
�
A
party has entered into a collective bargaining agreement with a bona fide labor
union governing the party's workforce; and

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(2)
�
The
collective bargaining agreement has been properly submitted to the director
under section -34,

the
terms of the collective bargaining agreement and associated provisions shall be
deemed the prevailing wages and terms serving as the basis of compliance with
this chapter for work on the contract by the party's workforce; provided that
this subsection does not affect the director's enforcement powers contained in
subsection (g).

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As used in this subsection,
"party"
includes eligible bidders for the provision of human services.

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� -3
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Provisions of law; waiver.
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No provision of this chapter may in any way
be contravened or set aside by private contract.

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� -4
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Payrolls and payroll records.
�
(a)
�
Every contract subject to this chapter and
the specifications for those contracts shall contain a provision that a
certified copy of all payrolls and a certified copy of a fringe benefit
reporting form supplied by the department or any certified form that contains
all of the required fringe benefit information shall be submitted weekly to the
governmental contracting agency for review.
�

The fringe benefit reporting form shall itemize the cost of fringe
benefits paid by the general contractor or subcontractor for:

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(1)
�
Health
and welfare benefits;

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(2)
�
Pension
and annuity benefits;

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(3)
�
Vacation
benefits;

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(4)
�
Continuing
education and training benefits; and

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(5)
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Other
fringe benefit costs paid by the general contractor or subcontractor.

The
general contractor shall be responsible for the submission of certified copies
of the payrolls of all subcontractors.
�

The certification shall affirm that the payrolls are correct and
complete, that the wage rates contained therein are not less than the
applicable rates contained in the wage determination decision of the director
of labor and industrial relations attached to the contract, and that the
classifications set forth for each human services provider conform with the
work the human services provider performed.
�

Any certification discrepancy found by the contracting agency shall be
reported to the general contractor and the director to effect compliance.

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(b)
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Payroll records for all human services
providers performing work shall be maintained by the general contractor and the
general contractor's subcontractors, if any, during the course of the work and
preserved for a period of three years thereafter.
�
The records shall contain the name of each employee,
the employee's correct classification, rate of pay, the itemized fringe benefit
reporting form pursuant to subsection (a), daily and weekly number of hours
worked, deductions made, and actual wages paid.

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(c)
�
The contractor shall make payroll records
available for examination within ten days from the date of a written request by
a governmental contracting agency, director, or any authorized representatives
thereof.
�
Any contractor who:

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(1)
�
Fails to make payroll records accessible
within ten days;

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(2)
�
Fails to provide information requested for the
proper enforcement of this chapter within ten days; or

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(3)
�
Fails to keep or falsifies any record required
under this chapter,

shall be assessed a penalty as provided in section -22(b).

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� -5
�
Termination of work on failure to pay agreed
wages; completion of work; contract and specifications provision.
�
Every contract and the specifications for
such contract shall contain a provision that if the governmental contracting
agency finds that any human services provider employed by the contractor or any
subcontractor has been or is being paid wages at a rate less than the required
rate by the contract or the specifications, or has not received the human
services provider's full overtime compensation, the governmental contracting
agency may, by written notice to the contractor, terminate the contractor's
right, or the right of any subcontractor, to proceed with the work or with the
part of the work in which the required wages or overtime compensation have not
been paid and may complete such work or part by contract or otherwise, and the
contractor and the contractor's sureties shall be liable to the governmental
contracting agency for any excess costs occasioned thereby.

PART II.
�

ADMINISTRATION AND ENFORCEMENT

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� -21
�
Governmental contracting agency
responsibilities.
�
The governmental
contracting agency shall:

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(1)
�
Pay or cause to be paid, within sixty days of
a determination made by the director, directly to human services providers or
to the director, from any accrued payment withheld under the terms of the
contract, any wages or overtime compensation found to be due to human services
providers under the terms of the contract subject to this chapter, or any
penalty assessed;

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(2)
�
Order any contractor to pay, within sixty days
of a determination made by the director, any wages or overtime compensation that
the contractor, or any of the contractor's subcontractors, should have paid to
any human services provider under any contract subject to this chapter, or any
penalty assessed which the contractor, or any of the contractor's
subcontractors, should have paid to the director; and

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(3)
�
Report to the director any violation of this
chapter, the rules adopted thereunder, or the terms of the contract subject to
this chapter.

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� -22
�
Investigation;
penalties.

�
(a)
�
The department may conduct investigations to
determine compliance with this chapter.
�

The department may examine the records of any contractor, either during
or after the performance of any contract, or subpoena the records.
�
The department may also interview employees
during working hours on the job.

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(b)
�
If any contractor interferes with or delays
any investigation by the department, the governmental contracting agency, on
receipt of written notice from the director of the interference or delay, shall
withhold from the contractor all further payments until the director has
notified the governmental contracting agency in writing that the interference
or delay has ceased.
�
Interference or
delay includes failure to provide requested records under section
-4; failure to allow employees to be interviewed during
working hours on the job; and falsification of records required under this
chapter.
�
The department shall assess a
penalty of $10,000 per contract for interference or delay.
�
For each day thereafter that the employer
fails to cooperate, the director shall assess a penalty of $1,000 per contract.

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(c)
�
The names of all complainants shall be
withheld from the employer unless prior permission is given by the complainant
to release the complainant's name.

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� -23
�
Notification
of violation.
�
(a)
�
When the department, either as a result of a
report by a contracting agency or as a result of the department's own
investigation, finds that a violation of this chapter or of the terms of the
contract subject to this chapter has been committed, the department shall issue
a notification of violation to the contractor or subcontractor involved.

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(b)
�
A notification of violation shall be final
and conclusive unless within twenty days after a copy has been sent to the
contractor, the contractor files a written notice of appeal with the director.

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(c)
�
A hearing on the written notice of appeal
shall be held by a hearings officer appointed by the director in conformance
with chapter 91.

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Hearings
on appeal shall be held within sixty days of the notice of appeal and a
decision shall be rendered by the hearings officer within sixty days after the
conclusion of the hearing, stating the findings of fact and conclusions of law.
�
The hearings officer may extend the due date
for decision for good cause; provided that all parties agree.

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� -24
�
Violations;
penalties.
�
(a)
�
Where the department finds that a first
violation of this chapter has been committed, the department, after proper
notice and opportunity for hearing, shall assess and order the person or firm
in violation to be jointly and severally liable for a penalty equal to
twenty-five per cent of the amount of back wages found due or $250 for each
offense, up to $2,500, whichever is greater.

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(b)
�
Where the department finds that a second
violation of this chapter has been committed, whether on the same or another
contract, within two years of the first notification of violation, the
department, after proper notice and opportunity for hearing, shall assess and
order the person or firm in violation to be jointly and severally liable for a
penalty equal to the amount of back wages found due or $500 for each offense,
up to $5,000, whichever is greater.

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(c)
�
Where the department finds that a third
violation of this chapter has been committed, whether on the same or another
contract, within three years of the second notification of violation, the
department, after proper notice and opportunity for hearing, shall assess and
order the person or firm in violation to be:

����
(1)
�
Jointly and severally liable for a penalty
equal to two times the amount of back wages found due or $1,000 for each
offense, up to $10,000, whichever is greater; and

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(2)
�
Suspended from doing any new work for a
governmental contracting agency for a period of three years, except as provided
in section -25(a)(2).
�

The suspension shall be effective on the later of the twenty-first day
after the notification of violation has been sent, or upon the issuance of a
decision pursuant to section -23(c).

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(d)
�
A first, second, or third violation refers to
each contract in which the department finds that a contractor has failed to
comply with this chapter.

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(e)
�
Both the person and firm shall be listed on
each notice of violation.

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(f)
�
As used in this section:

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"Firm"
includes a non-profit, corporation, limited liability company, partnership, and
limited partnership.

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"New
work on a contract" includes any contract in which the suspended person or
firm has not begun work as of the date of the suspension order.

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"Offense"
means each section of this chapter under which the contractor is cited;
provided that, with respect to prevailing wage and overtime citations under
section -2, each employee and each contract shall be
considered a separate offense.

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"Person"
includes a sole proprietor and the principal responsible managing employee of a
firm.

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� -25
�
Suspension.
�
(a)
�

The director shall suspend a person and firm as follows:

����
(1)
�
For a first or second violation, if a person
or firm fails to pay wages found due or any penalty assessed, or both, the
person and firm shall be immediately suspended from doing any work on any contract
with a governmental contracting agency until all wages and penalties are paid
in full;

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(2)
�
For a third violation, the suspension shall be
as prescribed in section -24(c); provided that if the person
or firm continues to violate this chapter or fails to pay wages found due or
any penalty assessed, or both, then the person and firm shall immediately be
suspended from doing any work on any contract with a governmental contracting
agency for a mandatory three-year period.
�

If after the three-year suspension period, the wages found due or
penalties assessed are still unpaid, the suspension shall remain in force until
payment is made in full; or

����
(3)
�
For falsification of records, or for delay or
interference with an investigation pursuant to section -22,
the person and firm shall be immediately suspended for a period of three years.

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(b)
�
The director shall immediately notify the
governmental contracting agency, comptroller, auditor or director of finance of
the county, and, in the case of a suspended subcontractor, general contractor
of any suspension order.

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(c)
�
No contract shall be awarded to the person
and firm so suspended or to any firm, corporation, partnership, or association
in which the person or firm has an interest, direct or indirect, until three
years have elapsed from the date of suspension, unless the period of suspension
is reduced or extended as herein provided.
�

Any contract awarded in violation of this subsection shall be void.

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(d)
�
As used in this section, "person" includes
a sole proprietor and the principal responsible managing employee of a firm.

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� -26
�
Judicial review.
�
(a)
�

Any party to an appeal under this chapter may obtain judicial review of
the decision on the appeal in the manner provided in chapter 91.

����
(b)
�
Any suspension or dismissal of any complaint
under this chapter shall be subject to appeal in circuit court by the aggrieved
party, under section 91-14 and rule 72 of the Hawaii rules of civil procedure.

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� -27
�
Liability.
�
If the accrued payments withheld under the
terms of the contract are insufficient to reimburse all the human services
providers for wages or overtime compensation due under this chapter, and the
contractor has failed to pay the wages or overtime compensation, the contractor
and the contractor's sureties shall be liable to the human services providers
in the amount of the unpaid wages and overtime compensation due, and in an
additional equal amount as liquidated damages.
�

However, any claim for liquidated damages, insofar as the surety or
sureties are concerned, shall not be paid until the claims of all other
creditors have been satisfied.

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� -28
�
Civil action.
�
(a)
�

The following civil actions may be instituted in any court of competent
jurisdiction:

����
(1)
�
An action to recover unpaid wages or overtime
compensation may be maintained by any one or more human services providers for
and on behalf of oneself or themselves and others similarly situated; and

����
(2)
�
An action for injunctive and other relief
against an employer that fails to pay the prevailing wage to its employees as
required by this chapter by a joint labor-management committee established
pursuant to section 175a of the federal Labor Management Cooperation Act of
1978 (29 U.S.C. 175a).

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(b)
�
The court, in its action and in addition to
any judgment awarded to the plaintiff or plaintiffs, shall allow reasonable
attorney's fees and costs of the action to be paid by the defendant.

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(c)
�
It shall be no defense that the human
services providers accepted or agreed to accept less than the required rate of
wages or overtime compensation or voluntarily made refunds.

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(d)
�
When a written request is filed by any human
services provider with the director claiming unpaid wages or overtime
compensation under this chapter, the director, after receiving an assignment
from the human services provider, may bring an action in any court of competent
jurisdiction to recover the amount of the claim.
�
The consent of any human services provider to
the bringing of such action by the director, unless the action is dismissed
without prejudice on motion of the director, shall constitute a waiver by the human
services provider of any right of action the human services provider may have
under subsection (a).
�
Any amount
recovered by the director before suit and accepted by the human services
provider as payment in full shall constitute a waiver of any rights under this
chapter.

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�
� -29
�
Rules.
�

The director shall adopt reasonable rules pursuant to chapter 91 to
determine the prevailing wages, enforcement, administration, and general
purposes of this chapter.
�
These rules
shall have the force and effect of law.

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� -30
�
Application of this chapter to contracts
entered into without regard to other laws.
�

The fact that a contract is or was entered into without regard to
chapter 103D, or upon a cost-plus-a-fixed fee basis, or cost-plus-a-fixed
percentage basis, or without advertising for proposals, shall not render this
chapter inapplicable to the contract, if this chapter would otherwise be
applicable.

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� -31
�
Effect on other laws.
�
Neither this chapter nor any rule or other
action under this chapter shall supersede or impair any minimum wage or maximum
hour law or any authority otherwise granted by law to provide for the
establishment of specific minimum or other wage rates.

����
� -32
�
Suspension during emergency.
�
During a national emergency declared by the
President or the Congress of the United States, or a state of emergency
declared by the governor, subject to the provisions of section 127-10 or 128-7,
the governor, by executive order in writing, may suspend this chapter; provided
that the governor may not suspend this chapter except in the event such an
emergency occurs and is so proclaimed.

����
� -33
�
Inspection.
�
(a)
�
If
work performed in accordance with this chapter, in excess of eight hours in any
day or on a Saturday, Sunday, or legal holiday of the State, requires
inspection by the State or any county, the inspection shall be conducted by the
State or county, as applicable.

����
(b)
�
In such event, it shall be lawful,
notwithstanding any other provision of law to the contrary, for the State or
any county to alter the normal working hours of public employees, as may be
needed for these purposes, and to pay these public employees for all hours
worked in excess of eight hours per day or on a Saturday, Sunday, or legal
holiday of the State.

����
� -34
�
Submission of collective bargaining agreement
to the director.
�
(a)
�
Parties to a collective bargaining agreement
covering classes of human services providers, which are included in the
prevailing wage determinations made pursuant to this chapter, shall submit a
copy of the agreement to the director within five days after execution of the
agreement.

����
(b)
�
Except as otherwise provided herein, the
terms of the agreement shall be kept confidential by the director.
�
The director may disclose terms of the
agreement to any federal or state agency for the purpose of enforcing this
chapter."

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SECTION 3.
�
This Act does not affect rights and duties
that matured, penalties that were incurred, and proceedings that were begun
before its effective date.

����
SECTION 4.
�
This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

Report Title:

Prevailing
Wages for Human Services Providers

Description:

Requires
prevailing wages for human services providers.

The summary description
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not legislation or evidence of legislative intent.