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:

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

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

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. 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.

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. In devising the new provision of benefits, the benefits should be independent of the employers and connected to the individual worker. Furthermore, the benefits would be portable, taken from job to job without interruption in coverage or loss of funding.

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

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

"Chapter

portable benefits program

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

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

"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.

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

"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.

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

"Worker" means a person who provides services to consumers through a contracting agent. "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.

§ -2 Portable benefits program board of trustees; establishment. (a) 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.

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

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

(d) 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.

(e) 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.

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

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

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

(2) 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;

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

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

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

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

(2) Monitoring compliance of contracting agents;

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

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

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

(6) 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.

§ -6 Contributions. (a) 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. The requirement to contribute funds under this chapter shall only apply when the services are provided to consumers located in the State.

(b) 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. If determined per hour, then the determination shall be prorated per minute.

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

(d) 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.

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

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

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

§ -7 Qualified benefit providers. (a) 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.

(b) 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.

(c) In addition to workers' compensation insurance, qualified benefit providers shall provide some or all of the benefits set forth in this subsection. 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:

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

(2) Paid time off;

(3) Retirement benefits; and

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

(d) Qualified benefit providers shall negotiate with labor organizations that have workers as associate members. 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.

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

§ -8 Enrollment. 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. Workers shall be provided information regarding available qualified benefit providers in a format that allows them to easily select their chosen qualified benefit provider.

§ -9 Private cause of action. 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.

§ -10 Relation to chapter 383. 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."

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

"§389- Contracted workers. (a) 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.

(b) As used in this section:

"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.

"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."

SECTION 4. 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.

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

SECTION 5. 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. Expands the Hawaii Retirement Savings Program to gig workers. 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.

HB 1290: RELATING TO LABOR.

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