Senate committee restores labor‑dispute language and approves bill to conform unemployment law to federal guidance

The Senate Committee on Labor and Technology voted to pass House Bill 2165, House Draft 2, adopting Department of Labor and Industrial Relations (DLIR) amendments and restoring language concerning individuals involved in labor disputes.

DLIR Director Jane Buttai testified that the department stands on its written testimony ‘‘in strong support’’ of the measure and requested a technical amendment moving a collections provision from subsection A to subsection C to preserve the statute’s legal structure. Buttai said the change would allow the Department to conform the state law with federal guidance and to preserve administrative processes such as waivers and flexible repayment plans.

Vice Chair Lamasal and other senators pressed DLIR on whether Hawaii’s statute, as amended in 2025, is out of conformity with a January 8 USDOL letter. Anne Ustachio, the state’s Unemployment Insurance Administrator, explained that overpayments are a lifetime liability under federal rules and that the two‑year limitation referenced in the bill applies to an offset credit mechanism, not to a statute‑of‑limitations waiver. Ustachio said an offset after two years would allow the agency to recover against future benefits and help protect the unemployment trust fund.

Union representatives and labor advocates raised concerns about workers on strike. Jovi Tokusato of Local 5 urged the committee to retain protections for striking workers, saying ‘‘when you’re on strike … you’re actually on the strike line’’ and are taking a financial hit. Buttai and DLIR staff said federal rules do not permit a blanket carve‑out for individuals in a labor dispute; however, DLIR maintains an authorized list of unions with hiring halls whose members in good standing are not required to perform the work‑search function.

DLIR emphasized the financial stakes: the department currently administers a federal grant of a little over $14 million and warned that nonconformity could affect Hawaii’s FUTA tax credit and federal funding. Committee members directed DLIR to follow up with the USDOL for clarification on the January 8 letter while restoring the bill language that accounts for continued employer–employee relationships during a labor dispute.

The committee adopted the chair’s recommendation to pass HB2165 with amendments to accept DLIR’s requested changes and to restore the labor‑dispute language (page two, lines 12–14). The committee also deferred the effective date to Jan. 1, 2077.

What happens next: The committee report will reflect the adopted DLIR amendments and include direction for DLIR to seek further clarification from USDOL about the January 8 guidance.