Prevailing Wage Weekly Requirements in Hawaii

Weekly filing of certified payrolls required on public works construction projects
Hawaii's prevailing wage law, Wages and Hours of Employees on Public Works, Chapter 104, Hawaii Revised Statutes (HRS), sometimes referred to as "Little Davis-Bacon" is similar to the federal Davis-Bacon law but different in some regards as well.    Both Hawaii Chapter 104, HRS and the Davis Bacon law  require certified payrolls to be submitted to the contracting agency on a weekly basis.  See Section 104-3(a), HRS, 29 CFR 5.5(a)(3)(ii)(A).  Certified payrolls must report the actual amount paid to the laborers and mechanics for the hours worked.

 Weekly payment required to laborers and mechanics on public works construction projects
All labors and mechanics working on the construction subject to Chapter 104, HRS, must be paid weekly. The law goes on to require the payment be within five working days of the end of the work week.  See Section 104-2(d) , HRS, 40 USC 3142(c)(1).     The pay period of one work week is determined by the employer and can be any set seven consecutive days.  Working days are considered Monday through Friday, so when counting five days from the end of the pay period, Saturdays, Sundays and State holidays are not counted. See Hawaii Administrative Rule 12-22-13.

Example how certified payrolls should be filed to be timely
An employer sets the work week from Sunday to Saturday, payment is due to laborers and mechanics the following Friday.  Certified payrolls should be filed on the same Friday as the payments are due to the employees. In essence it is a public pay statement.

If an employer has a work week from Monday to Sunday, payment is still due on Friday, five working days after the end of the weekly pay period.

If an employer has a work week from Tuesday to Monday, payment is due the following Monday, five working days after the end of the work week.  Certified payrolls should be submitted by the following Monday as well.

General contractor accommodations
For enforcement purposes general contractors may submit certified payrolls to the contracting agency seven days after the weekly paydate to allow the general to collect and review certified payrolls of the subcontractors, this type of weekly schedule will look like this:

Week Ending:	Pay Date	Remarks
April 2		Work begins on the project during this week.
April 9	Friday, April 8	(1)   Pay date for work performed in the previous week ending April 2. (2)  Subs submit certified payrolls to General for work performed week ending April 2 (3)  Work is also performed during this week.
April 16	Friday, April 15	(1)   Pay date for work performed in the previous week ending April 9. (2a)  Due date for all certified payrolls to be submitted to contracting  agency  from the prime with all subcontractors for work performed during the week ending April 2. (2b)  Subs submit certified payrolls to General for work performed week ending April 9 (3)   Work is also performed during this week.
April 23	Friday, April 22	(1)   Pay date for work performed in the previous week ending April 16. (2) a  Due date for all certified payrolls to be submitted to contracting agency from the prime with all subcontractors for work performed during the week ending April 9. (2) b  Subs submit certified payrolls to General for work performed week ending April 16

Different requirements then general rule.
Note that the general rule for payment to employees is at least twice a month.  See Section 388-2. HRS.

For more information
See Wage Standards Division Prevailing Wages on Public Works page.
See  Fact sheet 66 provides general information for the Davis-Bacon law.

 

What is a Prevailing Wage "Day" in Hawaii?

This is an important question in Hawaii because there is a special overtime law for work on public projects in Chapter 104, Hawaii Revised Statutes (HRS), that is different than the general law of time and half due after 40 hours in a week, in the Wage and Hour Law, Section 387-3, HRS.  Under the Wages and Hours of Employees on Public Works, Section 104-2(c), HRS, overtime is due after eight hours in a day or on Saturday, Sunday or State Holidays.  While this seems straightforward, it may get complicated when laborers and mechanics are employed on public works through the night that cross calendar days.

Employer sets work day and work week.

It is logical to think that a day always starts and ends with the calendar day beginning at 12:00 midnight and ending 24 hours later.  This is generally the answer, but sometimes the work schedules of laborers and mechanics don’t coincide with the traditional work day and measuring a “day” differently is an appropriate way to address this type of schedule. 

When Hawaii law is silent on an issue and a federal version exists, the State will look to that federal law as guidance in interpreting Hawaii law.  The federal Fair Labor Standards Act (FLSA) defines workday and workweek as:

“a “workday” is any fixed period of 24 consecutive hours and a “workweek” is any fixed and regularly recurring period of 7 consecutive workdays”  29 CFR 516.2 (a)(7)

It is well settled that employers can determine when their work week starts, whether it be from Sunday to Saturday, or Monday  to Sunday , as long as it is 7 consecutive days it is up to the employer.  Likewise the employer sets the work schedule.  A common work schedule could be 8 a.m. to 4:30 p.m. with a half- hour lunch break from Monday to Friday without any overtime.  But what happens when the work schedule bleeds from one calendar day to the next?

Evening Shift work

Sometimes in public works construction the work shift starts at 9 p.m. and ends at 5 a.m.  In essence the employer has created the “workday” for those on the evening shift from 9 p.m  for the next 24 hours.   If the mechanic or laborer works more than 8 hours before the 24 hour day completion,  the hours worked in excess of 8 will be paid overtime rates. 

Saturdays, Sundays and State Holidays

It’s the overtime provision for Saturday, Sunday and State Holidays that interrupts the shift type schedule and reverts overtime calculations to a calendar-focused timeframe.  If a work schedule on a public works project goes from Friday 9 p.m. to Saturday 5 a.m. there is no avoiding 5 hours of overtime for laborers and mechanics for the hours worked on Saturday, regardless of the work schedule or workweek.

Here’s a great chart pulled from WSD archives and updated that explains how it works.

 

Chapter 104, Hawaii Revised Statutes, Wages and Hours of Employee on Public Works Law

Example of straight time and overtime pay on a project when the "work shift" is on a regularly scheduled night work.

Work Schedule	Sunday	Monday	Tuesday	Wednesday ( Holiday)	Thursday	Friday
8:00 p.m. to 5:00 a.m.		Work ends at 5:00 a.m.	Work ends at 5 a.m.	Work ends at 5:00 a.m.	Work ends at 5:00 a.m.	Work ends at 5:00 a.m.
(for purposes of this example only, there is no meal break)	.	From 12:00 a.m. to 4:00 a.m., payment is at straight time.   From 4:00 a.m.-8 p.m. payment is at overtime because it’s more than eight hours.	From 12:00 a.m. to 4:00 a.m., payment is at straight time.   From 4:00 a.m.-8 p.m payment is at overtime because it’s more than eight hours.	From 12:00 a.m to 8:00 p.m., payment is at overtime because it’s a holiday.	From 12:00 a.m. to 4:00 a.m., payment is at straight time.   From 4:00 a.m.-8 p.m payment is at overtime because it’s more than eight hours.	From 12:00 a.m. to 4:00 a.m., payment is at straight time.   From 4:00 a.m.-8 p.m. payment is at overtime because it’s more than eight hours.
	Work begins at 8:00 p.m.	Work begins  at 8 p.m.	Work begins at 8:00 p.m.	Work begins at 8:00 p.m.	Work begins at 8:00 p.m.
	From 8:00 p.m. to 12 midnight, payment is at overtime because it’s Sunday	From 8:00 p.m. to 12 midnight, payment is at straight time.	From 8:00 p.m. to 12 midnight, payment is at straight time	From 8:00 p.m. to 12 midnight, payment is at overtime because it’s a holiday	From 8:00 p.m. to 12 midnight, payment is at straight time

 

Common Problems

·         Changing shifts:  An employer could have more than one regular shift.  If one starts at 8 a.m.  and one at 9 p.m.  overtime will likely arise if an employer schedules an employee from one shift to another shift without a day break between the shift assignment change.

·         Using scheduling to avoid overtime: When  an employer uses the calendar day  to avoid overtime and schedules employees for six hours on Tuesday night from 6p.m. to 12a.m. and six hours on Wednesday from 12a.m. to 6 a.m.  for a total 12 hour shift, this would incur a 4 hour overtime, assuming the 12 hours was all work time at a public works job.

·         Split-shift rule: Employees and employers subject  to Chapter 387, Wage and Hour Law, Hawaii Revised Statutes, must comply with the split shift rule as well.  If an employee is assigned to two shifts in one consecutive 24 hour period, both shifts must start and finish within 14 consecutive hours.  For example, if an employee works from 12a.m. to 6 a.m. then starts on the 8 a.m. shift, they must complete the work by 2 p.m.  All work after 10 a.m. would be overtime as the workday started at 12 a.m. and continues for the next 24 hours.

" (f) No employer shall employ any employee in split shifts unless all of the shifts within a period of twenty-four hours fall within a period of fourteen consecutive hours, except in case of extraordinary emergency."  (Section 387-3(f), HRS)

Free Prevailing Wage Workshop Scheduled

         The Division recently announced there will be a free prevailing wage workshop for construction contractors who work on state and county construction projects.  The workshop will be on Thursday, May 23, from 8:30 to 11:30, in the 3rd Floor Conference Rooms of the Ke'elikolani Building, 830 Punchbowl St., Room 310, Honolulu.  To sign up see the flyer. 

      This workshop provides an overview of the Wages and Hours of Employees on Public Works Law, Chapter 104, Hawaii Revised Statutes and the related Hawaii Administrative Rules.  This law is the State version of the Federal Davis-Bacon Act for federal construction projects and while similar, it has some very different provisions that will be hightlighted.  The class will also review sample certified payrolls to understand how to avoid common mistakes.  All are welcome.

Kuhio Day is Overtime Day

Information about Prince Kuhio can be found here.

Spring is in the air!  Contractors who have public works jobs will be looking to make up for lost time during the heavy rain earlier in the month.  Monday, March 26, is Kuhio Day, a State holiday, which means all DLIR offices will be closed to the public.  It also means that laborers and mechanics working on public works jobs Monday are due overtime pay of time and a half all day, even if they work less than forty hours in the week.

The Hawaii public works law (Wages and Hours of Employees on Public Works,Chapter 104, Hawaii Revised Statutes) requires laborers and mechanics to be paid overtime after 8 hours a day, or for all hours on Saturdays or Sundays or on State Holidays. (Section 104-2(c), HRS).  The rate must be equal to one and a half times the rate as listed on the current prevailing wage rate list for the appropriate job.

Calculating the overtime rate from this list can be confusing because the wage rate is listed in two parts, the basic hourly rate plus the fringe benefit rate.  To calculate the overtime rate of any classification take the basic hourly rate and multiply by 1.5 then add the fringe benefit.  As an example, an electrician who is a Line Installer (outside) is paid the prevailing wage rate of $65.54.  The prevailing wage rate is equal to the basic hourly rate of $40.55 plus the fringe benefit rate of $24.99.  The overtime rate is $85.82.  O.T. is calculated by taking the hourly rate of $40.55 and multiplying it by 1.5 and adding the fringe benefit amount of $24.99.  Note that the overtime rate is not prevailing wage rate times 1.5 or $98.31, nor is it $60.82 which would be 1.5 times the basic hourly without adding the fringe benefit amount.

Some have noticed that certified payroll forms submitted as required by law, often report differing amounts as the hourly prevailing wage rate.  There can be many legitimate reasons why this happens.  Amounts may differ because employers often have different benefit packages. If you have questions about a specific situation you can check our website for more information or call 808-586-8777 to speak to someone.

Prevailing Wage Conference by Feds

The U.S. Department of Labor, Wage and Hour Division (Hawaii Wage Standards Division federal counterpart) is having a FREE Prevailing Wage Conference in Hawaii July 20, and 21, for more information check out this link to the announcement.

If you have (or want) a federal contract you will want to attend this conference. It covers both construction and service related industry information. Space is limited so act quickly.

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.

Itemizing Fringe Benefits on Certified Payrolls

Act 10, First Special Session 2009, became effective October 1, 2009. This means that anyone submitting a certified payroll on a public works job subject to Chapter 104, Hawaii Revised Statutes, now has to provide an itemized list of the fringe benefits paid to laborers and mechanics along with their certified payroll. The Department of Labor and Industrial Relations (DLIR) worked with the Department of Accounting and General Services (DAGS) to adapt a form currently being used by DAGS on public works construction.

The Public Works Division of DAGS has numerous forms available on their website arranged according to the stage of construction. The adapted form for Act 10 is an xcel file found under "Ongoing Construction" on the Public Works Administration of Construction Page and is called "Statement of Compliance and DAGS ECP for Payroll Affidavits". http://hawaii.gov/pwd/Members/ib/forms/index_html. The DAGS adapted form is actually four worksheets.

Act 10 only pertains to the worksheet of the adapted form labeled "Weekly Statement of Compliance" which lists the itemized fringe benefits. The Certifited Payroll worksheet form is unchanged. WSD will be focusing their educational efforts in the comming months on this issue as well as some of the American Recovery and Reinvestment Act (ARRA) issues.