Significant Increase in Labor Law Penalties

Posted on Jul 7, 2016 in News



July 7, 2016

Penalties for Workers’ Compensation, Temporary Disability Insurance and Prevailing Wages Violations Increase

 HONOLULU — Gov. David Ige signed into law Acts 187 and 192 on July 1, which increase the penalties for non-compliance with certain labor laws administered by the Department of Labor and Industrial Relations (DLIR). Act 187 also excludes some employers from having to provide Temporary Disability Insurance (TDI) for themselves if they perform services for their own corporation, limited liability company (LLC), limited liability partnership (LLP), partnership, or sole proprietorship.

“DLIR supported the substantial increase in penalties to serve as a deterrent to help enforce the law,” said DLIR Director Linda Chu Takayama. “It also makes for a more level playing field for law-abiding employers who pay their fair share and provide the statutory benefits to their workers.”  Earlier this year DLIR participated in an on-site investigation of tenant contractors working on the new Ewa Wing at Ala Moana Center. The regulatory action uncovered dozens of violations related to unlicensed activity, uninsured workers and unpaid taxes.

The new laws increase penalties for workers’ compensation insurance 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.

Under Act 192 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 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.

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Media Contact:
Bill Kunstman
Department of Labor and Industrial Relations
(808) 586-8845
[email protected]