Joint House Committees Amend Bill to Provide Relief to Struggling Hawai'i Businesses

News Release from House Democratic Caucus, Feb 4, 2021

Honolulu, Hawai'i – During a joint legislative hearing of the House Labor and Tourism Committee and the House Finance Committee, Representatives amended House Bill 1278 to stabilize catastrophic increases in unemployment insurance (UI) assessments through 2022.

“Today’s amendments throw a lifeline to Hawai‘i businesses and prevent unemployment assessments from tripling,” said Representative Richard Onishi, Chair of the Committee on Labor and Tourism. “The Legislature is moving quickly to ensure that local businesses have a fighting chance to survive this economic downturn due to COVID-19 closures and restrictions.”

House Bill 1278 HD1 seeks to expedite the State’s economic recovery by temporarily reducing employers’ unemployment contribution rates to the State. The amendments cap the employer contribution rate at schedule D for the next two years. In doing so, lawmakers impose more reasonable assessments on all Hawai‘i employers during the pandemic as they adjust to new business models.

The amendments also require the Director of the Department of Labor and Industrial Relations (DLIR) to omit all unemployment benefits charged for employers in 2021 and 2022. This omission will significantly decrease additional employer contributions.

The Joint Committees, at the request of DLIR and nonprofit agencies, further amended the bill to support employers who are not part of the unemployment tax system but are responsible for paying the full cost of unemployment claims.

House Bill 1278 now moves to the full House on Friday, February 5, for consideration on Second Reading, (UPDATE: Approved unanimously on 2nd read) and is on track for final passage by the House on Monday, February 8.  House Bill 1278 will then cross over to the Senate for its consideration and action. Governor David Ige must sign a bill into law before March in order to prevent automatic assessment increases from being triggered.

HB1278: Text, Status