Hawaii’s state statutes have long helped simplify overtime wage requirements for local employers. Those paid on an hourly basis or often eligible for overtime wages when they put in more than 40 hours per pay period.
Many workers paid on a salary basis are exempt from overtime rules. However, that exemption depends on the wages meeting certain baseline salary standards set by federal law. The state actually has a law that renders overtime wages unnecessary for those who earn more than $2,000 per month, but that may no longer apply in many cases.
The state rules in Hawaii do not necessarily supersede the new federal regulations, which may make many workers paid on a salary basis eligible for overtime pay. The salary a worker must make to be exempt is now much higher than it was before.
When do overtime rules apply?
Previously, employers could avoid paying overtime wages if they provided their workers with a salary of at least $35,658. That changed with a new federal rule that took effect on July 1st, 2024. At that time, the minimum salary necessary to be exempt from overtime pay rules increased to $43,888.
The same rule has a second wage increase planned for January 1st, 2025. Beginning next year, employees who earn less than $58,656 are likely eligible for overtime pay. Employers may need to make significant changes to their payroll or scheduling practices to ensure that they remain compliant with the new regulations.
In scenarios where workers paid on a salary basis do not receive an exempt salary or overtime wages, they may have grounds to pursue a lawsuit against the employer seeking the wages due to them according to the new federal law. Additionally, the new rule implements a mandatory review and adjustment of the current exempt salary every three years to ensure it aligns with inflation and cost of living expenses.
Businesses found to be non-compliant with wage regulations could face expensive lawsuits and penalties in addition to the obligation to pay overtime wages for their employees. Ensuring proactive compliance with state and federal employment statutes is important for the protection of a company’s financial interests. Changes to regulatory standards, including overtime exemption rules, can result in major implications for local businesses.