Allowable Fringe Benefits in the Prevailing Wage Law

Allowable fringe benefits must first be a benefit to employees.

Two questions were asked recently about whether credit could be taken for a fringe benefit under our prevailing wage law, Chapter 104, Hawaii Revised Statutes, for the supply and laundry of uniforms and for the general excise tax paid by contractors. The answer to both is no, these are not allowable fringe benefits that can be credited towards the prevailing wage on public works in Hawaii.

The supply and laundry of uniforms is at the direction of the employer and therefore a cost of doing business. Requiring an employee to wear a uniform is not a benefit to the employee. It is generally unlawful for employers to deduct for the cost and maintenance of a uniform required to be worn at work.

The payment of general excise tax is required by all businesses in Hawaii unless specifically exempt. There is no exemption for construction work. As a required amount to be paid by the employer to the State, the general excise tax is not a benefit to an employee.