STAND. COM. REP. NO. 473
RE: H.B. No. 1166
Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twenty-Sixth State Legislature
Regular Session of 2011
State of Hawaii
Your Committees on Labor & Public Employment and Economic Revitalization & Business, to which was referred H.B. No. 1166 entitled:
"A BILL FOR AN ACT RELATING TO EMPLOYMENT,"
beg leave to report as follows:
The purpose of this bill is to sustain worker retention in the event of a divestiture of a covered establishment if the covered establishment employs 50 or more people by requiring the successor employer to hire all incumbent nonsupervisory and nonconfidential employees, unless:
(1) The business of the successor employer is substantially dissimilar to the former employer's business; or
(2) The human resource needs of the successor employer are reduced, resulting in the reduction of employees needed; provided that the number of employees to be dislocated is in direct proportion to the reduction in the total human resource needs of the successor employer.
The Hawaii State AFL-CIO, ILWU Local 142, and Hawaii Government Employees Association, AFSCME Local 152, AFL-CIO testified in support of this bill. The Department of Labor and Industrial Relations supported the intent of this bill. The Chamber of Commerce of Hawaii, Retail Merchants of Hawaii, and National Federation of Independent Business opposed this measure.
In today's unstable economy, potentially increasing unemployment through the divestiture of business entities with no assurance of continued employment for its workers, could result in less money in the economy and diminished employee loyalty. Moreover, by minimizing disruption when a divestiture occurs, the employer is better suited to continue operations with employees who already have the skills to perform the job and thus, less time is spent retraining new employees.
However, requiring employers to retain employees in the event of a divestiture has the potential to negatively impact the ability of struggling companies, especially small businesses, to survive through the sale of an ongoing operation. Therefore, your Committees find that providing employers incentives to retain employees may help with extending business longevity.
Your Committees have amended this bill by:
(1) Providing the successor employer, in the event of a divestiture of a covered establishment, a tax credit for retaining all incumbent nonsupervisory and nonconfidential employees for at least a year;
(2) Increasing the amount of employees employed by a covered establishment from 50 to 100; and
(3) Making technical, nonsubstantive amendments for clarity, consistency, and style.
As affirmed by the records of votes of the members of your Committees on Labor & Public Employment and Economic Revitalization & Business that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 1166, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 1166, H.D. 1, and be referred to the Committee on Finance.
Respectfully submitted on behalf of the members of the Committees on Labor & Public Employment and Economic Revitalization & Business,
ANGUS L.K. MCKELVEY, Chair
KARL RHOADS, Chair