An Overview of Hawaii Employment Law
Ocean and Hawaiian Airlines are at it again, this time for the first time in Federal Court, seeking a ruling that they do not have to arbitrate certain disputes with international flight attendants. We represent many of those flight attendants.
While we regularly provide examples of disputes arising under federal wage and hour laws, this post will be an overview of Hawaii law. There are many types of claims that can only be brought in state court. Although there is no Hawaii federal bench, federal law often trumps state law in that venue, and we will use this space and others to discuss Hawaii employment law in future posts.
The Law: Hawaii Courts have ruled that "[t]he purpose of the [Hawaii Wage and Hours Law] is to protect workers, the State’s real wealth, from the evils of substandard wages and unreasonable hours, and not to penalize employers who have acted in good faith." Hawaii Structural Ironworkers Union Local 625 v. Hawaiian Dredging Const. Co., 111 Hawai`i 66, 75, 137 P.3d 1212, 1221 (2006). In addition, the Hawaii Supreme Court has noted that "the mandatory provisions of the Hawaii Wage and Hour Law serve as the "minimum standards for working conditions in Hawai’i, affirming our commitment to a high standard of living and valuing the work of Hawaiians…" Hawaii State AFL-CIO v. Lingle, 175 P.3d 214, 225 (Haw. 2008) (emphasis added). The Department of Labor Industrial Relations Division regulates the Hawaii Wage and Hour Law. As such, Hawaii courts have specifically noted that the Hawaii Wage and Hour Law is much broader in coverage than the federal counterparts, such as the Fair Labor Standards Act ("FLSA").
Prohibited Actions: Hawaii Revised Statutes Chapter 388 governs the Hawaii Wage and Hour Law and provides for minimum wage, overtime, payment of wages, and related topics . As contained in the statute, its purpose is "to establish a uniform standard for wages for employees within the state which shall be not less than the prevailing and usual wage paid for labor of like character in the locality." HRS § 388-1. In addition, the statute covers discrimination, retaliation, and other prohibited employment actions. In general, the statute and its applications are extremely broad.
Who is Covered: The Hawaii Wage and Hour Law applies to any "person, firm, or corporation" who "employs, suffers, or permits any person to work." HRS § 388-1. The statute further defines employee as "any individual employed by an employer." HRS § 388-1. Importantly, the Hawaii Supreme Court recently ruled that, where an employee works for a covered employer (more than 20 employees), the employee is provided more protections than if the employee works for an out-of-state employer (less than 20 employees). See Hawaii State AFL-CIO v. Lingle, 175 P.3d 214, 219 (Haw. 2008).
Exemptions: The Hawaii Wage and Hour Law exempts certain categories of workers. HRS § 388-10. As in the Federal Fair Labor Standards Act ("FLSA"), the exemptions are narrowly construed.
Remedies and Damages: Remedies available to an employee under the Hawaii Wage and Hour Law include unpaid wages, back wages, unpaid overtime, liquidated damages, reasonable attorneys’ fees and costs, any equitable relief as the court deems appropriate, and an injured party’s reasonable efforts to mitigate its damages. HRS § 388-10. The statute of limitation for filing a claim is two (2) years under the Hawaii Wage and Hour Law. HRS § 387-28 (and no tolling due to class action status, as with the FLSA).
We will continue to post on Hawaii State labor laws.
The Minimum Wage Laws in Hawaii
Hawaii minimum wage rates are distinct from the federal minimum wage rate. Employers are subject to Hawaii minimum wage requirements, an amount that is adjusted periodically, unless they are exempt from minimum wage requirements either because they are not physically located in Hawaii, or they employ only people 17 years of age and under. Employers who have qualifying gross income over $349,000 in the previous calendar year are also exempt from Hawaii’s minimum wage requirements.
The minimum wage effective January 1, 2015 is $7.75 per hour. The minimum wage is scheduled to increase on January 1, 2016 to $8.50 per hour, on January 1, 2017 to $9.25 per hour, and on January 1, 2018 to $10.10 per hour. Starting January 1, 2019, the minimum hourly wage is to be determined by the average hourly wage of all occupations as reported by the U.S. Bureau of Labor Statistics with a minimum of $10.10 and a maximum of $12.00 per hour.
The Division of Labor Standards & Safety in the State of Hawaii Department of Labor & Industrial Relations sets the minimum hourly wage by rule making process.
Employment Discrimination in Hawaii
Hawaii’s employment discrimination laws are some of the most robust in the nation, prohibiting an employer from refusing to hire or discharging from employment, discriminating against, or otherwise depriving any individual of employment opportunities or discriminating against any individual with respect to compensation terms, conditions, or privileges because of any of the following: Hawaii’s employment discrimination laws are enforced by the Hawaii Civil Rights Commission. This agency is responsible for investigating potential employment discrimination cases and, where appropriate, mediating a resolution between the parties. If no resolution can be reached, the Commission may refer the case to the Hawaii Attorney General’s Office for litigation. Employees also have the option of filing employment discrimination claims directly in court.
As with the federal Title VII and the Age Discrimination in Employment Act (ADEA), employees may only pursue workplace discrimination claims when one of these categories is the motivating factor in an employment action. For instance, an employee cannot be fired simply because they are bald, but rather, the bald employee may only pursue a discrimination claim under Hawaii’s laws if there was discrimination in the firing motivated by the hair loss (such as if the bald employee was fired because he or she is bald while the other same-gender employees were not). In this case, the bald employee’s baldness would have been a motive for firing him/her and he/she could successfully file a discrimination claim under Hawaii’s employment laws.
At will employment remains the rule in most employment relationships, so employees who believe that they have been discriminated against on account of any of the protected categories should know that they must be able to show that such discrimination was likely the motivation behind their employer’s actions in order to succeed in any claims against their employer based on Hawaii’s employment discrimination laws.
The Overtime Laws in Hawaii
Overtime is one of the most complicated and often litigated subjects of employment law in Hawaii. From time to time, we receive inquiries from employees who believed they were specfically exempt from receiving overtime because of their job title or non-traditional work schedule. However, Hawaii law does not have a "managerial exemption" while the Fair Labor Standards Act (FLSA) does. However, there are accounting certification titles that are exempt under Hawaii law, but that exemption does not apply under the FLSA. The point is to fully understand whether or not you are entitled to overtime is often more complex than the issue appears on its face.
Who is entitled to overtime pay?
If you are a non-exempt employee, you are entitled to receive overtime at a pay rate of at least 1 ½ times your regular rate of pay for hours worked over 40 in a work week. A non-exempt employee is an employee who is not specifically exempt from overtime pay. Employees involved in interstate commerce jobs are entitled to overtime pay under both the Hawaii Wage & Protection Laws as well as the FLSA.
If, for example, you are a store clerk who occasionally handles interstate transactions (like credit card transactions) and you work at a store that is a chain store that imports goods from outside Hawaii, you are likely entitled to overtime pay from either state / federal law or both. Other common jobs which are entitled to overtime pay are nurses, teachers, security guards, dispatchers, and salespeople. There are exemptions to this rule, however, when employees are working on a farm managing the farm’s activities. These employees are exempt from receiving overtime pay in Hawaii.
What are the overtime calculation rules?
Overtime pay is calculated by multiplying the hourly rate you are being paid by 1.5 and multiply that overtime hourly rate by the number of hours worked over 40 in a week. Thus, if you make $10.00 an hour, and work a total of 50 hours in week, you are entitled to $15.00 for all 10 hours worked over 40. The formula is: Hourly rate times 1.5 multiplied by number of hours worked over 40.
Worker’s Comp Insurance in Hawaii
Hawaii’s workers’ compensation laws provide coverage for workers who become injured on the job or have work-related illnesses. An employer cannot fire, discriminate or retaliate against any worker for filing a workers’ compensation claim in any way. Any worker can generally seek workers’ compensation benefits for injuries or illnesses that occur over a single day or as the result of a repetitive motion. Benefits can include money for:
• Medical expenses related to the work injury
• Payments to cover some of the wages lost as a result of time off of work to recover from an injury, typically 66.3 percent of your average weekly wage
• Permanent disability benefits
• Death benefits and funeral expenses for the surviving family members of someone who dies as the result of his or her job duties
If you are eligible to receive worker’s compensation benefits, you can get a full list of all potential benefits—including rehabilitation and reemployment assistance, case management support and vocational rehabilitation services—from the Hawaii Department of Labor and Industrial Relations’ Division of Workers’ Compensation. Any worker injured on the job must immediately report to his or her employer, no later than seven days from the date of the accident, but this notification should ideally take place as soon as an injury happens in order to ensure that workers’ compensation coverage kicks in to help with funding medical expenses and lost wages. Though not as common, workers’ compensation also covers repetitive stress injuries such as carpel tunnel syndrome or other similar back, neck or elbow injuries that result from overuse of specific body parts as a regular part of your job duties. In these cases, you do not have to pinpoint a specific incident that caused the injury. Instead, you would simply have to show that the repetitive nature of your job has led to the injury.
FMLA in Hawaii
Under the federal Family and Medical Leave Act ("FMLA") that applies in Hawaii, eligible employees are entitled to 12 workweeks of unpaid leave for certain family and medical reasons, within any 12-month period. The FMLA only applies to employers who have 50 or more employees within a 75-mile radius, Hawaii employers that also meet the FMLA requirements apply the similar Hawaii Family Leave Law. First, the employee must work for a covered employer. Second, the employee must have worked at least 1,250 hours during the previous 12 months. Third, the employee must work at a company location where the employer has employed at least 50 employees within 75 miles of that work premises during the past 20 calendar work weeks. Fourth, to be covered under the FMLA, the employee must be employed at a work site where there are at least 50 employees working for that company. Finally, if the Hawaii FMLA employer has 25 or more employees, then it will apply the Hawaii Family Leave Law here . This law differs from the FMLA by only requiring 6 to 8 workweeks of unpaid leave. Hawaii Family Leave law applies based on the physical work sites that are operated by the company. Further, the Hawaii Family Leave Law can be found in the Hawaii Revised Statutes ("HRS") at section 398-1 et seq. Employees are entitled to take FMLA leave for a serious health condition of their own, a family members serious health condition, a family members pregnancy or birth, the birth of the employees child, adoption or placement of a child with the employee, a military family member qualifying exigency, or to care for a covered service member who is recovering. The leave may be taken all at once or it can be taken intermittently or reduced schedule, if allowable by law and is agreed upon by the employee and employer. Employees can request and must be given 15 days to notify employers of their intention to take leave, except in unforeseeable circumstances.
Hawaii Unemployment Laws
Although the federal-state unemployment insurance program is governed by federal law, the State of Hawaii plays a major role in administering the program. Unemployment insurance benefits are typically available to workers who become unemployed through no fault of their own. The eligibility criteria for unemployment benefits in Hawaii are as follows:
a. The worker must have worked and been paid wages in the 20 calendar weeks proceeding their unemployment or six times the state minimum wage within the 52-week period of time immediately preceding the week in which unemployment begins.
b. The employee must have worked at least 14 times and earned at least $100 at one place of employment during the seven calendar weeks proceeding their unemployment.
c. The worker must have become unemployed through no fault of their own. Involuntary terminations due to an adverse employment action, such as layoff caused by reduced demand for the employer’s goods and services, does not usually disqualify a person from unemployment insurance benefits.
d. Employees who voluntarily quit their employment, except under compelling circumstances that would necessitate a change in their personal life, will not qualify for unemployment insurance benefits. Voluntary reasons for quitting employment include going to a new job or leaving employment to attend school.
e. Unemployment insurance benefits will be reduced for employees who separate from employment due to a lack of work or business closure after three days of looking for another job.
To apply for unemployment benefits in Hawaii, people can file in person with their nearest approved service provider, online by completing a questionnaire and/or over the phone. The minimum time between making an initial claim to be eligible for benefits in Hawaii is at least one week. This eliminates the risk of fraud and excessive paperwork. Coverage under Hawaii’s unemployment benefits program extends to private sector employees, as well as employees who work for the United States, the State of Hawaii and political subdivisions located within the state.
The duration of unemployment benefits in Hawaii typically lasts for 26 weeks.
Youth Employment in Hawaii
Employers must be vigilante about following the restrictions of employing minors or face steep penalties. The Fair Labor Standards Act (FLSA) and Hawaii law restricts the employment of minors in a number of ways including age restrictions, work periods, and types of jobs permitted to be performed by minors.
An employer may not employ a minor under 18 years of age any occupation, job, or duty which is proscribed to be hazardous for employees who are under 18 years of age per HRS § 387-1(f). Employers must comply with both the federal and state laws relating to youth employment in Hawaii. For the most part, the federal laws relating to hours of work by minors are stricter than Hawaii law and in such cases employers are required to follow the stricter law.
Unlike federal law that imposes strict time limits on hours worked by minors, Hawaii law only restricts the periods that minors may be employed. Minors may not be employed during the following periods:
HRS § 390-2(a) provides, in part:
No person under twenty years of age shall be employed, permitted, or suffered to work: (1) In any manufacturing or mechanical establishment, or in any establishment manufacturing or storing explosives, in quarrying or excavation operations, or in logging or related occupations, or as a coal miner, in any place in which the use of hazardous or dangerous machinery or other power-driven equipment is required; or
- (2) In any mining, operating power-driven metal forming, punching, or shearing machine or in any operation involving the performance of any duties in connection with the maintenance or repair of any such machinery; or
- (3) As an outside helper on motor vehicles, in boiler or engine rooms, in work pits or pits, or in cleaning vessels in shipyards; or
- (4) In any occupation in or about warehouses or establishments manufacturing or storing explosives and in connection therewith; or
- (5) In connection with transportation, including any wharf or loading platform, and establishing grades; or in connection with the operation of a motor vehicle, or assisting in the transportation of the community; or
- (6) In any motor vehicle or service station or working in a place, including any place out-of-doors, where public health, comfort, or convenience requires the performance of the service of such employment by a person;
- (7) Except in office work, selling, vending, or handling merchandise, or warehousing; or
- (8) As a lifeguard at a swimming pool or lake unless the lifeguard has successfully completed a course, approved by the department of human services, on the prevention and treatment of drowning and other emergencies, including training in cardio-pulmonary resuscitation and basic first aid.
Both federal and state law requires employers to obtain and maintain employment certificates for minor employees. Unlike federal law that allows for a few minor exceptions, Hawaii law requires an employment certificate for all minors under 18 years of age. HRS § 390-5(d). The employer must retain the employment certificate until three years after the termination of the minor’s employment. HRS § 390-5(a).
Child Labor laws are serious! An employer who violates any child labor law may be subject to a fine of not less than $100 or imprisoned for up to 30 days, or both. HRS § 390-8(a). Failure to keep an employment certificate commits a petty misdemeanor and subject the employer to a fine of $25 per offense. HRS §§ 390-9.
Employer Responsibilities and Penalties
Employers have several obligations under state law in addition to those imposed by federal law. Employers should be aware of the laws relating to minimum wage, wages and hours, meal breaks, overtime, paid family leave, workers compensation, temporary disability insurance, unemployment insurance, HMSA (Hawaii Medical Service Association) and other health plans.
Minimum Wage
The individual Hawaii minimum wage is $10.00 per hour. This is the minimum wage that must be paid to employees if the employees do not fall into any of these categories: agricultural workers, babysitters, domestic workers, employees selling newspapers, employees at nonprofit institutions, trainees, certain disabled workers, tipped employees engaged in certain occupations and special.
Wages and Hours
Employees who are covered by the wages and hours law are entitled to a minimum wage, overtime compensation, rest and meal periods, payment of wages, payment at termination of employment, and wage assignments and garnishments. If the employee has been overpaid, the employer may deduct from wages earned only if the employee authorizes the deduction in writing.
Meal Breaks
Employees must be provided rest periods of at least 10 minutes for each four-hour period of work. Meal periods of 30 minutes or more during which the employee is relieved from all work duties must also be provided. However, employees must be paid a minimum wage for time spent on meal periods if the employees are required to stay on the premises or if the employer maintains a policy of paying for any part of the meal period.
Laws Relating to Wages and Hours
Haw. Rev. Stat. Section 387.
Hawaii State Family Leave Law
Employers with 100 or more employees must grant eligible employees family leave for a maximum of 4 weeks per year for family-related purposes. Employee eligibility for family leave requires an employee to have been employed by the employer for at least 6 consecutive months. Family leave is available for the birth or adoption of a child , for serious illness of a spouse, child or parent, or for a natural disaster related to house damage. Family leave must be granted without pay and in one continuous period of up to 4 weeks. However, accrued sick leave and family leave without pay-for a striking employee may be granted at the employee’s request.
Discrimination Based Upon Family Leave
Employers may not discriminate against employees for invoking rights under the family leave law. Haw. Rev. Stat. Section 398.
Workers Compensation
Employers must provide employees on payroll with workers compensation coverage for work related injuries. An employer can either obtain workers compensation insurance or self insure for workers compensation coverage. Employers are not required to provide coverage for certain types of employees such as casual employees, seasonal farm laborers, domestic servants, casual laborers, employees working less than 20 hours a week for less than three out of four consecutive weeks, employees earning less than $2,000 in the previous 12 months or employees covered under a collective bargaining agreement that provides equivalent or better protection.
Temporary Disability Insurance
Employers are not liable to pay temporary disability benefits to employees who either work less than 20 hours per week or earn less than $200 per calendar week.
Unemployment Insurance
Employers must pay unemployment insurance contributions for each employee or must obtain coverage under a private plan authorized by law. All employers must report new hires to the state unemployment insurance office.
Other Laws and Regulations
Hawaii law requires employers to provide employees with health insurance benefits and maternity benefits.