New laws increase the penalties for companies that violate certain labor laws in Hawaii.
According to the state Department of Labor and Industrial Relations (DLIR), the changes aim to better protect workers by increasing the penalties for employers who fail to provide adequate pay or insurance protection.
Last fall, several construction companies hired to work on stores in Ala Moana Center’s Ewa Wing Expansion were fined for these types of work-related violations, and officials say the investigations continue to this day.
“One problem that’s happened statewide, unfortunately far too much, is contractors come in and they try to cut corners, and one of the ways they do that is by not providing their workers with TDI (Temporary Disability Insurance) and workers’ comp coverage,” said Tyler Dos Santos-Tam, executive director, Hawaii Construction Alliance. “What we found in Ala Moana last fall was that these mainland contractors would come in and just not provide their employees with the necessary coverages, especially in a situation like that and in a construction industry where they’re exposed to potentially dangerous situations.”
“We hope it will send a strong message to the contractors out there who aren’t following the law. There are many who are and it’s not fair, so we’re hoping we can level the playing field by providing this additional information out there for everybody to do the right thing,” said DLIR director Linda Chu Takayama.
Act 187, in part, increases the penalties for not having TDI coverage, for failure to make correct or timely benefit payments, for terminating such benefits, for failure to file medical reports, for employer’s failure to provide copies of requested medical reports, for not having Workers’ Compensation coverage, and for the deduction of premium payment from employee wages.
Penalties for workers’ compensation insurance went from $10 per employee per day to $100 per employee per day, the first increase in 28 years. The penalty for non-compliance with maintaining temporary disability insurance increased from $1 per employee per day to $100 per employee per day. TDI penalties had not changed since they were first established 47 years ago in 1969.
The law also excludes some employers from having to provide TDI for themselves if they perform services for their own corporation, limited liability company (LLC), limited liability partnership (LLP), partnership, or sole proprietorship.
Meanwhile, Act 192 increases penalties for contractors who violate wages and hours laws.
The penalties for violations of Hawaii’s prevailing wage laws on public construction projects are changed from 10% to 25% of the amount of back wages due or $250 per offense for a first offense; from $100 to $500 or the equivalent of the back wages due for a second offense within two years; and for a third offense within three years of the second violation from $200 or the amount of back wages to two times the amount of back wages or $1,000 per offense and be suspended from any new public works project for three years.
Recently, the federal Occupational Safety and Health Administration (OSHA) announced it was increasing its maximum penalties, last adjusted in 1990, by 78%.
It is requiring state agencies, such as Hawaii’s Occupational Safety and Health Division (HIOSH), to adopt maximum penalty levels that are at least as effective as theirs. DLIR plans to submit a proposal to do so in the next session of the Legislature.
Employers are encouraged to seek information and assistance for their safety programs, provided at no cost, in advance.