As a reminder to contractors working on State or County construction projects, Prince Kuhio Day is State Holiday and therefore all hours worked on Thursday March 26, 2015, need to be paid at the overtime rate.
Calculating the correct OT rate
To calculate the overtime rate under Hawaii's prevailing wage law, Hawaii Revised Statutes Chapter 104, Hours and Wages of Employees on Public Works, take the basic hourly rate and multiply by 1.5* then add the fringe benefit hourly rate amount to get the overtime prevailing wage rate. For example, looking at the current applicable wage rate schedule, #485 for the prevailing wage rate of Carpenter the schedule shows $62.96. Broken down it is a $42.25 basic hourly rate and $20.71 fringe benefit hourly rate.
Carpenter basic hourly rate $42.25 x 1.5 = 63.375 now add the hourly fringe benefit rate of $20.71 and get $84.08 for the overtime rate for carpenters on March 26, 2015.
How can the overtime prevailing rate be paid?
For contractors with a collective bargaining agreement in place, the certified payroll will show the carpenter being paid at least $63.38 per hour and show at least $20.71 per hour paid to the union trust fund for fringe benefits. Other contractors who pay benefits on an hourly basis, the amount of basic hourly rate and the amount of fringe benefits paid to a third party trustee will be determined by the contractors own agreement with employees, the two amounts must add up to $84.08 per hour for all work done on March 26, 2015.
For contractors who are not parties to a collective bargaining agreement or do not pay their fringe benefits on an hourly basis, the certified payroll must show a basic hourly rate of $84.08 for overtime work, because no credit for fringe benefits can be taken in overtime when paying fringe benefits on a monthly basis.
Fringe benefit credit applies only for straight time.
For contractors that pay their workers benefits on a monthly basis, there is a formula that can be used to calculate an hourly credit, but the credit only applies to straight time hours. The formula can be found in Hawaii Administrative Rule 12-22-4. To calculate the hourly fringe benefit credit for straight time hours, take the amount paid by the employer and divide it by 173 and that quotient is the hourly credit amount that can be taken for straight time hours.
*Act 165, Regular Session 2015 modified the law to provide higher overtime rates than 1.5 where collective bargaining rates prevail in classifications. Wage Rate Schedule 486 is the first schedule to direct overtime on Sunday at 2 x the basic hourly rate for some classifications, and 3 x the basic hourly rate on Labor Day. See Note 13 on WRS 486.
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