This month, Governor David Ige signed Act 135 into law. The Act authorizes the addition of an administrative penalty that may be levied against employers found to have violated Hawaii’s Payment of Wages and Other Compensation law, Chapter 388 of the Hawaii Revised Statutes (HRS). The Act provides “[f]or a penalty of not less than $500 or $100 for each violation, whichever is greater." The addition of this penalty to the Payment of Wages law is a reminder that employers should review their wage payment practices to ensure that they are compliant.

The Payment of Wages law establishes how and when employees must be paid, as well as the kind of documentation that must be provided with employee paychecks. The law also clarifies the process that should be used to take wage deductions, and prohibits employers from taking certain deductions altogether. Impermissible deductions include those taken for fines, cash shortage in a common money till, cash box or register used by two or more persons, penalties or replacement costs for breakage, lost or stolen property, damage to property, default of customer credit, and more.

According to the Department of Labor and Industrial Relations, common employer violations of Chapter 388 include the failure to pay wages within seven days after the end of a pay period, neglecting to provide a pay statement each payday, shorting hours on a pay check, including overtime, or making deductions from an employee’s paycheck for cash shortages, damages or fines. Where violations occur, an employer may be ordered to pay an administrative penalty of at least $500, in addition to back pay and a damage award equal to the amount of unpaid wages and interest at a rate of six percent per year. Reasonable attorney’s fees and costs may also be awarded against the employer.