An East Hawaii lawmaker is proposing a new payroll tax to fund paid sick leave for most employees in the state.
An East Hawaii lawmaker is proposing a new payroll tax to fund paid sick leave for most employees in the state.
The bill, introduced by Rep. Mark Nakashima, would require businesses that employ at least 10 people to provide up to five days of paid leave a year for illnesses.
The move would make Hawaii only the fifth state in the nation with a sick leave law, though it would be the first to levy a tax to pay for it.
California, Connecticut, Massachusetts and Oregon each have laws requiring employers to provide paid sick leave, but the businesses are required to pick up the expense.
Under Nakashima’s bill, a tax of 0.025 percent would instead be levied on incomes between $50,000 and $100,000 to cover the wages of sick employees. The tax would increase to 0.05 percent for those making six figures.
That would translate to a tax bill of $12.50 a year to someone making $50,000, which is about the median income for Hawaii County. An employee making $100,000 a year would pay $50.
That’s hardly a major expense, but is a payroll tax necessary for employees to be guaranteed paid sick leave?
Nakashima (D-Hamakua, Hilo) said an employer-paid program for sick leave in the food service industry was proposed last year, but it failed to get enough support. He suggested there wasn’t enough interest in adding another expense to businesses.
“This is just the opening position,” he said. “We’ll see what happens.”
Nakashima, who chairs the Labor and Public Employment Committee, said it’s also not clear how much the tax would generate and if it would raise enough to cover the cost of the program.
Revenue from the tax would be deposited into a payroll trust fund overseen by a nine-member board appointed by the governor.
He said the board would be responsible for implementing rules, such as qualifications employees might have to meet. The board also would have authority over setting the tax after 2022.
Email Tom Callis at tcallis@hawaiitribune-herald.com.
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Paid sick leave laws by state
CONNECTICUT
– Limited to service industry.
– Employees earn one hour of paid sick leave for each 40 hours worked.
– Benefit is capped at 40 hours a year.
– Sick leave available after working 680 hours.
MASSACHUSETTS
– Businesses with 11 or more employees required to provide up to 40 hours of paid sick leave annually.
– Workplaces with under 11 employees can provide up to 40 hours of unpaid leave.
– Employers can require certification of illness if more than 24 hours of sick leave used consecutively.
OREGON
– Covers workplaces with at least six employees.
– Employees earn one hour of paid sick leave for each 30 hours worked.
– Benefits capped at 40 hours a year.
– Allows employers to require certification of illness.
CALIFORNIA
– Employees earn one hour of paid sick leave for each 30 hours worked.
– Employers can limit sick days to 24 hours or 3 days in each year of employment.