Hawaii Prevailing Wage Information
THRESHOLD
Every public works construction project value in excess of $2,000, involving a state or county governmental contracting agency, is covered, whether it is in the form of a contract awarded through a formal bid process, purchase order voucher, or lease arrangement. Warranty work performed by a contractor or subcontractor is covered. HI Rev. Stat. Sec. 104-1et seq.
TIMING
Wage rate schedules are issued on or about February 15 and September 15 of each year. Addenda or additional wage rate schedules are issued as needed.
INCREASES
The wage rates issued and in effect at the time of bid are good for the life of the project. However, the wage determination is multi-year so a contract is “on-notice” when wage increases are to go into effect and must pay those increases as noted on the determination.
Whenever the Director of Labor determines that the prevailing wage has increased as shown in the wage rate schedule, the contractor must increase the wages accordingly. See page 8 of the Chapter 104 Prevailing Wage Manual for increases in the Wage Rate Schedule.
OVERTIME
Overtime at a rate of time and one-half must be paid for all hours worked on the following day:
1) Saturday
2) Sunday
3) A legal State holiday
4) Or more than eight hours on any other day whether worked on one or more projects
WORKING ON WEEKENDS
Under Hawaii prevailing wage law, overtime compensation is required for working on the weekends at a rate of time and a half.
WORKING ON LEGAL HOLIDAYS
The following are recognized as legal holidays in Hawaii:
- New Year’s Day (January 1)
- Martin Luther King Jr. Day (January-Third Monday)
- Presidents’ Day (February-Third Monday)
- Prince Kuhio Day (March 26)
- Good Friday (Friday before Easter Sunday)
- Memorial Day (May-Last Monday)
- King Kamehameha Day (June 11)
- Independence Day (July 4)
- Admission Day (August-Third Friday)
- Labor Day (September-First Monday)
- Veterans’ Day (November 11)
- Thanksgiving Day (November-Fourth Thursday)
- Christmas (December 25)
Moreover, overtime must be paid for:
1) All election days, except primary and special election days, in the county where the election is held
2) Any day that the President or Governor proclaims as a holiday
SHIFT DIFFERENTIALS
Hawaii prevailing wage does not require payment of different wage rates for working different shifts throughout the day.
FRINGE BENEFITS
Hawaii prevailing wage law requires that workers are paid the basic hourly wage rate plus fringe benefits to meet the prevailing wage rate. Any combination of the basic hourly rate and allowable fringe benefit may be used to meet the applicable prevailing wage rate. All fringe benefits used to calculate the prevailing wage must be itemized. Please See, the wage rate schedule to view the hourly fringe rate per trade classification.
Example: Carpenter’s rate as of 9/15/2014
· Basic hourly rate = $42.25
· Fringe hourly rate=$20.71
· Prevailing wage = $62.96
Employer can either:
· Pay the basic and provide allowable fringe valued at $20.71
· OR Pay the whole $62.96 directly to employee
· OR Pay any combination of the basic hourly rate & fringe which equals $62.96 or more
Fringe Benefit
A fringe benefit is a contribution irrevocably made by a contractor to a trustee or to a third person according to a fund, plan or program in providing benefits to a laborer or mechanic, such as medical, life insurance, and pension. An allowable fringe benefit must have these three things:
1) Fall into one of six categories:
a. Health and welfare
b. Life/disability insurance
c. Vacation and holiday pay
d. Pensions
e. Apprenticeship/similarly approved programs
f. Other bone fide fringe benefits determined by DLIR
2) Be made at least monthly to the eligible fund, plan, or program (e.g., HMSA, Kaiser Health Plans)
3) AND Be paid for all hours worked including overtime hours
Method for determining the fringe benefit hourly credit
The allowable hourly fringe benefit credit is determined by dividing the monthly contribution rate by 173 hours (HAR 12-22-4). For example, if the monthly premium is $173, then the hourly credit = $173/173hrs = $1/hr. If the prevailing wage is $59.17/hr, then the employer can claim $1/hr fringe and pay $58.17/hr as the rate.
TRAINING CONTRIBUTIONS
A contractor may take credit for contributions paid for benefits such as medical plan, or insurance policy. The allowable hourly fringe benefit credit is determined by dividing the monthly contribution rate by 173 hours (average straight time hours per month). Since the hourly credit for fringe benefits is based on straight time hours, credit may not be applied to overtime hours.
APPRENTICE REQUIREMENTS
In order to be paid apprentice or trainee rates, apprentices and trainees must be parties to an agreement either registered with or recognized as a USDOL nationally approved apprenticeship program by the Department of Labor and Industrial Relations, Workforce Development Division or a program recognized by the Hawaii Department of Labor, Industrial Compliance. (§12-22-6(1), HAR).
The number of apprentices or trainees on any public work in relation to the number of journeyworkers in the same craft classification as the apprentices or trainees employed by the same employer on the same public work may not exceed the ratio allowed under the apprenticeship or trainee standards registered with or recognized by the Department of Labor and Industrial Relations. A registered or recognized apprentice receiving the journeyworker rate will not be considered a journeyworker for the purpose of meeting the ratio requirement. (§12-22-6(2), HAR)
The “summer hire” classification is not recognized under Chapter 104. If a contractor hires any temporary summer help, these workers must be classified and paid according to the work performed, using the closest existing job classification in the wage rate schedule. Only the helper classifications listed in the wage rate schedule are allowed.
CONTRACTOR LICENSING
Hawaii requires general engineering, general building and specialty contractors to be licensed. To check if a contractor holds a license in Hawaii, visit Hawaii’s contractor licensing policy for more detailed information.
DUTIES OF CONTRACTORS/SUBCONTRACTORS
Certified copy of payrolls
A certified copy of all payrolls shall be submitted weekly to the contracting agency. The contractor is responsible for the submission of certified copies of the payrolls of all subcontractors. The certification shall affirm that the payrolls are correct and complete, that the wage rates listed are not less than the applicable rates contained in the applicable wage rate schedule, and that the classifications for each laborer or mechanic conform with the work the laborer or mechanic performed. [§104-3(a), HRS]
Payroll records shall be maintained by the contractor and subcontractors for three years after completion of construction.
The records shall contain:
1) the name and home address of each employee
2) weekly straight time and overtime earnings
3) the employee's correct classification
4) amount and type of deductions
5) rate of pay (basic hourly rate + fringe benefits)
6) actual wages paid
7) daily and weekly hours worked
8) date of payment
Records shall be made available for inspection by the contracting agency, the Department of Labor and Industrial Relations, and any of its authorized representatives, who may also interview employees during working hours on the job (§104-3(b), HRS).
Underpayment of prevailing wages/overtime
If the contracting agency finds that any laborer or mechanic employed on the job site by the contractor or any subcontractor has not been paid prevailing wages or overtime, the contracting agency may, by written notice to the contractor, terminate the contractor's or subcontractor's right to proceed with the work or with the part of the work in which the required wages or overtime compensation have not been paid. The contracting agency may complete this work by contract or otherwise, and the contractor or contractor's sureties shall be liable to the contracting agency for any excess costs incurred. [§104-4, HRS]
TRAVEL & SUBSISTENCE
Hawaii prevailing wage law applies to transporting of materials, supplies or equipment: to or from a public work site, or between a public work site and another public work site or a dedicated site, when performed by a laborer or mechanic employed at the job site.
A fringe benefit is a contribution irrevocably made by a contractor to a trustee or to a third person according to a fund, plan or program in providing benefits to a laborer or mechanic, such as medical, insurance and pension. This definition does not include compensation for lodging.
PENALTIES
To ensure compliance with the law, DLIR and the contracting agency will conduct investigations of contractors and subcontractors. If a contractor or subcontractor violates the law, the penalties are (Act 215):
1) First Violation = 10% of back wages found due or $25 per offense, whichever is greater.
2) Second Violation = amount of back wages found due or $100 for each offense, whichever is greater
3) Third Violation = two times the amount of back wages found due or $200 for each offense, whichever is greater; and suspension from doing any new work on any public work of a governmental contracting agency for three years.
*Please Note—A violation qualifies as a second violation if it occurs within two years of the first notification of violation, and a third violation if it occurs within two years of the second notification of violation.
Suspension
For first or second violation—the department shall immediately suspend a contractor who fails to pay wages or penalties until all wages and penalties are paid in full.
For a third violation—the department penalizes and suspends the contractor as described above, except that if the contractor continues to violate the law, then the department immediately suspends the contractor for a mandatory three years. The contractor shall remain suspended until all wages and penalties are paid in full. [§§104-24, 104-25]
To access the current suspension list, please visit: http://labor.hawaii.gov/wsd/prevailing-wages-on-public-works/contractors-suspended-under-chapter-104-hawaii-revised-statutues/
Failing to produce accurate payroll records
Any contractor who fails to make payroll records accessible or provide requested information within 10 days, or fails to keep or falsifies any required record, shall be assessed a penalty as provided in Section 104-22(b) and 104-25(a)(3), HRS. [§104-3(c)]
Withholding payments
If any contractor interferes with or delays any investigation, the contracting agency shall withhold further payments until the delay has ceased. Interference or delay includes:
1) failure to provide requested records or information within ten days;
2) failure to allow employees to be interviewed during working hours on the job;
3) and falsification of payroll records.
The department must assess a penalty of $1,000 per project, and $100 per day thereafter, for interference or delay. (§104-22(b)).
*Please Note—Failure by the contracting agency to include in the provisions of the contract or specifications the requirements of Chapter 104, HRS, relating to coverage and the payment of prevailing wages and overtime, is not a defense of the contractor or subcontractor for noncompliance with the requirements of this chapter. (§104-2(f))
DEBARMENT
Currently, Hawaii does not maintain a “debarment list” or debarment provision in its prevailing wage regulations.
HELPFUL LINKS
Chapter 104 PowerPoint (July 2013)
Most current wage rate schedule
Chapter 104, Prevailing Wage FAQ (revised 03/09)
Wage Rate Bulletin 484, September 15, 2014
Revised Equipment Operator Classifications
Apprentice Schedule Bulletin No. 484
Situational Questions and Answers regarding Chapter 104
Survey work on public works projects
Flaggers and traffic directors employed on public works projects
Submission of Certified Affidavit of Fringe Benefits
ARRA
Request for determination of ungulate fence workers
Notice re: WSD-2013-1
Memorandum No. ED-1, Listing of Owners/Partners on certified payrolls under Chapter 104
Sewer line pipe cleaning and inspection on public works construction projects
WSD 2014-02 (November 20, 2014) (Notice of Clarification of re: floor layering on public works construction projects)
CONTACT INFORMAITON
Research and Statistics Office: (808) 586-9019
DLIR Offices:
Honolulu
Phone: (808) 586-8777
Fax: (808) 586-8766
Kauai
Phone: (808) 274-3351
Fax: (808) 274-3355
Maui
Phone: (808) 984-5322
Fax: (808) 984-2071
Kona
Phone: (808) 322-4808
Fax: (808) 322-4813
Hilo
Phone: (808) 974-6464
Fax: (808) 974-6474
Other Offices:
Oahu: (808) 586-9017
Hawaii: (808) 974-4000
Molokai or Lanai: (800) 468-4644 (Upon request for the last five digits of your party’s number, key in 69017)
Apprentice Program of the Workforce Development Division: (808) 586-8877
Research and Statistics: (808) 586-9017
