Hawaii Overtime Laws

September 15th 2024

Hawaii Labor Law encompasses a comprehensive set of regulations that govern various aspects of employment, including overtime pay. Under these laws, specific provisions are in place to ensure that employees in Hawaii are fairly compensated for working beyond their regular hours.

This article will provide information to successfully navigate Hawaii’s overtime regulations, whether you’re an employer aiming for compliance or an employee defending your rights.

This article covers:

Hawaii Overtime Rates

Overtime law in Hawaii is designed to prevent employees from being exploited by their employers. Employees who work over 40 hours per week are entitled to overtime pay at time-and-a-half (1.5) for every additional hour worked. 

Since the regular minimum wage in Hawaii is $14.00 per hour, this means Hawaii’s overtime minimum rate is $21.00 per hour.

For a deeper understanding of your overtime rights, read our detailed article on overtime rights in Hawaii.

Overtime Entitlement in Hawaii

According to Hawaii overtime laws, overtime pay is required for any non-exempt employees.

Any hours worked above 40 in a standard workweek is considered overtime. Employers must pay a wage rate of 1.5 times higher than their employees’ regular hourly rate.

Read more about Overtime Exceptions and Exemptions in Hawaii.

Compensatory Time In Hawaii

In Hawaii, the option of compensatory time, also known as “comp time,” instead of overtime pay, is acknowledged, but it is limited to specific employees. To qualify for comp time, the following requirements must be fulfilled:

  • Comp time is available only to salaried employees.
  • The employee must be granted the opportunity to take the accrued comp time off within the same pay period in which they worked overtime.
  • Comp time is earned at a rate of one and a half times the number of overtime hours worked.

These conditions ensure that eligible employees in Hawaii have the option to accumulate and utilize comp time as an alternative to receiving immediate overtime payment.

Overtime for Tipped Employees in Hawaii

In Hawaii, most tipped employees are entitled to overtime pay if they work more than a specific number of hours in a week. Overtime pay is calculated at a rate of 1.5 times the employee’s regular hourly wage for every overtime hour worked. In Hawaii, a “tipped employee” is defined as someone who typically receives more than $20 in tips per month while doing their job.

Hawaii laws allow employers to pay tipped employees a lower cash wage compared to the standard minimum wage. In Hawaii, employers can pay tipped employees the lower cash wage of $12.75 per hour, as long as the employee’s total earnings, including tips, meet or exceed the regular minimum wage of $14.00 for tipped employees. This is because employers can deduct up to $1.25 from the employees’ wage for each hour they earn in tips, which is called a “Tip Credit.”

It is important to note that employers cannot include the tip credit in the overtime pay calculation but must use the entire tipped employee minimum wage of $14.00 to determine the overtime pay rate for tipped employees.

Overtime Exceptions and Exemptions in Hawaii

While the exemptions provided under Hawaii law are not limited to the ones mentioned here, the following categories are significant when comparing them to the new federal regulations:

  • Employees who receive a guaranteed monthly compensation of $4,000 or more, regardless of whether they are paid weekly, biweekly, or monthly, are exempt from coverage under the Wage and Hour Law.
  • Employees who work in bona fide executive, administrative, supervisory, or professional roles, as well as those engaged in outside sales or collection activities, are also exempt from the law’s provisions.

These exemptions highlight specific categories of employees in Hawaii who may not be subject to the same wage and hour requirements as other workers.

Agricultural Exemption 

The following employers are not required to pay overtime compensation to any of their employees for a total of twenty selected workweeks during a year.

  • Employers involved in agricultural activities such as processing dairy products, sugar cane, and agricultural or horticultural commodities, as well as those handling poultry or livestock by performing tasks such as handling, slaughtering, or dressing.
  • Employers engaged in agriculture whose products are processed by an employer involved in seasonal pursuits or processing, canning, or packing operations.
  • Employers working primarily in the initial processing, canning, or packing of seasonal fresh fruits at any place of employment mentioned above.

Statute of Limitations For Unpaid Overtime Claims in Hawaii

In Hawaii, the statute of limitations refers to the specific time limits within which an employee can seek to recover unpaid overtime wages. Generally, an employee has a two-year window from the date of the violation to file a complaint and pursue overtime back wages. This means that if an employee initiates legal action today, they can only seek compensation for violations that occurred within the two previous years.

Despite that, the statute of limitations can sometimes be extended to three years. This extension applies when an employer has knowingly or wilfully violated overtime regulations. 

Misclassifying Employees in Hawaii

In Hawaii, it is important to distinguish between employees and independent contractors to avoid misclassifying employees and to ensure compliance with overtime laws. Employers cannot misclassify employees as independent contractors in Hawaii to evade providing overtime compensation. Simply labeling an employee as an independent contractor, or having a written agreement, may not be enough to avoid state or federal labor laws regarding overtime pay.

In Hawaii, an individual is considered an independent contractor if they have the freedom to determine how they perform their work without being subject to the employer’s control. Various factors come into play when determining whether a worker should be classified as an employee or an independent contractor.

If employees are misclassified and denied rightful overtime compensation, they have the right to claim up to twice the amount they are owed. This serves as a deterrent against employers exploiting the independent contractor classification to evade their obligations.

Legal Cases Relating to Overtime Compensation in Hawaii

Below, we present law cases relating to fair overtime compensation for employees in Hawaii: 

1. Employee Claims the City of Honolulu Neglected Overtime Pay for 300 Employees

In the case of Hayslip v. City and County of Honolulu, Robert Hayslip filed a motion for conditional certification of collective action against the City & County of Honolulu (Honolulu). Hayslip claimed that Honolulu didn’t accurately calculate the regular pay rate, provide overtime pay, or promptly compensate around 300 active or retired paramedics and EMTs.

Hayslip filed for a collective action arguing that the group of individuals employed by Honolulu as EMTs and paramedics were similarly situated and should be certified. Hayslip supported his motion with a declaration and a proposed notice to potential members of the collective action. Hayslip’s claim regarding overtime pay for the workers in the proposed collective action meets the standard for conditional certification. The court had granted conditional certification based on the overall allegations and the similarity of other claims.

Ultimately, the court ordered the parties to meet and confer to discuss the content of the proposed notice and other details related to the collective action. The purpose of the notice was to inform potential members of the collective action and allow them to make informed decisions about participating.

Key lessons from this case:
  • Under the FLSA, workers can litigate jointly if they claim a violation of the FLSA, are “similarly situated,” and opt-in to the joint litigation in writing.
  • The “similarly situated” requirement means that workers share a similar issue of law or fact relevant to their FLSA claims.
  • Employers can be held liable for unpaid overtime claims of more than just the one employee who filed the lawsuit. 

2. Restaurant Owner Required to Pay Over $200k in Back Wages to Employees

In this case, the owner of three restaurants in Hawaii, Sujin Tomita, was found to be in violation of the Fair Labor Standards Act. Tomita denied his workers’ overtime and minimum wages and discarded time records. An investigation by the Department of Labor’s Wage and Hour Division was conducted.

It was revealed that Tomita and her restaurants knowingly paid workers less than the minimum wage and failed to provide overtime pay for hours worked beyond 40 hours in a workweek. Additionally, the employer discarded time records every month. Many of the affected employees worked an average of 46 hours per week. The investigation also found that one of the restaurants, Sura Hawaii I, paid servers and other workers a flat salary without ensuring that it met the required minimum wage.

The U.S. District Court for the District of Hawaii affirmed the findings of a U.S. Department of Labor investigation and ordered Tomita and her restaurants to pay $210,000 in back wages and liquidated damages to 71 workers, along with $10,000 in civil money penalties for willful violations of the law.

The court’s ruling highlighted that paying a flat salary for all hours worked does not exempt an employer from their legal obligation to provide overtime wages to staff. 

Key lessons from this case:
  • Paying a flat salary for all hours worked does not exempt an employer from this requirement.
  • Discarding or tampering with time records is a violation of labor laws and can hinder investigations into wage and hour violations.
  • Employers who knowingly disregard their legal obligations may face not only back wages and damages but also civil money penalties.

3. Employers Wrongly Calculated Employees’ Pay Resulting in Incorrect Overtime Wages

In the case of Gonzalez v. Diamond Resorts International Marketing, Daniel Gonzalez filed a lawsuit against Diamond Resorts International Marketing (Diamond) and West Maui Resorts Partners (WMRP). Gonzalez filed this lawsuit on behalf of himself and other similarly situated individuals.

Gonzalez was a vacation counselor employed by WMRP. His job involved providing services and assistance to vacationers and guests at the resorts operated by WMRP. Gonzalez alleged that WMRP violated the FLSA and Hawaii law by miscalculating his overtime pay. He claimed that he was improperly paid overtime based on the state minimum wage instead of the employee’s regular rate of pay, which should include bonuses and commissions. Gonzalez argued that he and other vacation counselors were affected by this violation.

Gonzalez sought a partial summary judgment on the issue of whether WMRP miscalculated overtime pay. He also sought a ruling that they acted willfully, which would extend the limitation period under the FLSA and subject WMRP to liquidated damages. WMRP argued that Gonzalez’s motion was premature because he was required to establish that he and the other employees were entitled to overtime pay. WMRP also argued that certain overtime exemptions applied and disregarded Gonzalez’s claims regarding his status as an employee and his hours worked.

The court determined that Diamond is an employer under the FLSA, WMRP is an employer under the Hawaii law, and Gonzalez and the other workers are considered employers. The court finds that the defendants calculated overtime pay based on the state minimum wage rate and did not include bonuses and commissions, which violated the FLSA and Hawaii law.

The court has not decided on whether Diamond made efforts to understand its overtime obligations and whether it acted intentionally. However, the court found that WMRP did not attempt to understand its obligations under Hawaii law. If WMRP is found to have violated Hawaii law, it would be considered an intentional violation. Therefore, the court ruled in favor of Gonzalez on this issue.

Key lessons from this case:
  • Employers must include bonuses and commissions when calculating overtime pay for employees.
  • Willful violations of overtime laws can result in extended limitation periods and subject employers to liquidated damages.
  • An employer’s ignorance of overtime regulations is not an excuse for noncompliance.

Learn more about Hawaii Labor Laws through our detailed guide.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.