Draw the Law, People Issues VI: Paying Employees

Well, it’s Friday and since many people tend to get paid at the end of the workweek it’s a good day to talk about Wage and Hour laws.

So I’ll do a brief run-through of the Fair Labor Standards Act (FLSA), Hawaii Wage and Hour Law (Chapter HRS 387), Payment of Wages Law (Chapter HRS 388). So Let’s get to it.

For laws regulating wage and hour of workers we will be looking at FLSA, HRS Chapters 387 and 388, under DOL and DLIR, respectively.

Fair Labor Standards Act

The US Department of Labor, Wage and Hour Division, is the governmental agency responsible for handling FLSA issues.  It acts through the following means: creation of rules and regulations, issuance of agency opinions, conducts inspections and investigations, handles complaints, and can institute legal proceedings for matters relating to pay issues.

FLSA is going to apply to employers who have employees engaged in the act of commerce (so almost everyone). The main requirement of the FLSA is that employers are to a pay minimum wage ($7.25) to employees and to pay overtime compensation to employees who work in excess of forty(40) hours per week.  In addition, employers are to maintain extensive time records of the hours worked by their employees.  In fact, recordkeeping requirements show up in a lot of labor laws, so much so stay tuned to this blog for a discussion on that and handbooks in the future.  In addition, I do conduct seminars and training on the matter.

Some things to keep in mind of FLSA: (1) minimum wage payments; (2) overtime pay; and (3) certain workers are exempt.

Anyway, some final points to take away FLSA it also regulates heavily the use of minors (in general, those younger than 16 years old) as employees and that the following categories of employees are exempt from the application of FLSA:

  1. bona fide executives;
  2. administrators;
  3. professionals;
  4. computer employees;
  5. outside salespeople;
  6. as well as some industries are exempt from FLSA provisions.

Hawaii Wage and Hour Law

The Hawaii version of the FLSA can be found in Chapter 387.  There are many overlapping and similar provisions.  The main requirements are as follows:

  1. pay minimum wage (both federal and state is $7.25) and overtime to employees who work forty (40) or more hours per work week;
  2. maintain records – detailed time and pay for each employee;
  3. provide the employees detailed explanations in their paychecks of the time worked and paid;
  4. posting notice from Hawaii Department of Labor and Industrial Relations (DLIR) in a conspicuous location;
  5. do not discriminate on the basis of race, religion, and sex in the payment of wages;
  6. also regulates child labor (which are those that are under the age of 18, see also HRS Chapter 390);
  7. applies to all employers except the state and federal governments.

For Hawaii's Wage and Hour Law keep in mind: (1) paying minimum wage; (2) recordkeeping; (3) explaining those records; (4) posting requirment; and (5) no discrimination in pay based on race, religion, or gender.

As with the FLSA, there are exempted are categories, such as employees guaranteed compensation of $2,000 or more per month, and specific groups like agricultural workers. DLIR has similar to powers as the DOL, but with respect to the enforcement of this state law.  The specific DLIR agency is the Wage Standards Division.

Hawaii Payment of Wages

Payment of wage law (HRS 388) is concerned about: (1) timing of pay; (2) withholdings; (3) payment for vacation, sick leave, and severance; (4) notification of pay rate change; and (5) once again posting notice from DLIR.

Whereas the prior two laws were concerned about who is protected by certain pay requirements, the Payment of Wages Law (HRS Chapter 388) is focused on the how.  The requirements of this law are as follows:

  1. timing of payment for employees that resigned/terminated/died;
  2. determines how to do withholdings from employees’ wages;
  3. regulates payment for vacation, sick leave, and severance pay;
  4. employers must notify employees change in pay rates;
  5. and once again there is a posting of notice requirement from DLIR.

If HRS 387 applied to you, then 388 will also effect you. This law is also enforced by the same Wage Standards Division at DLIR.

Final Words

Here are some other things to make note of:

  • If you own a restaurant or have a situation were your workers are getting by via tips, please be aware that Hawai`i uses a more restrictive tip credit of twenty-five cents per hour and not the federal $2.13 per hour tip credit
  • The basic calculation for overtime payment is one-and one-half times the employee’s regular rate for ALL hours worked in excess of the forty (40) hour workweek under both the FLSA and Hawaii Wage and Hour Law.
  • Finally, we calculating the amount of hours worked, we use a “suffered or permitted” to work test.  The employer can give permission implicitly or explicitly. An employer is not liable for the time worked by an employee if they have no knowledge or did not give permission to it. To determine this it will be asked if:
  1. the employer was aware that the employee was working during the time periods in question; and
  2. the employer permitted the employee to do so.
  • If you have knowledge that they worked, but it was without permission you MUST pay them, but you can discipline them for working without your permission.

If you liked this post or any of my other series please “Subscribe” to this blawg to receive e-mail updates.  In addition, follow me on Twitter and “Like” me on Facebook.  If you need to contact me directly, please e-mail me at Ryankhew@hawaiiesquire.com.

*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.  Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

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One thought on “Draw the Law, People Issues VI: Paying Employees

  1. Pingback: Draw the Law: People Issues VII, Protecting Workplace Privacy Part I « The Blawg of Ryan K. Hew, Attorney At Law

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