DLIR NEWS RELEASE: State issues penalties to construction company

Posted on Sep 19, 2016 in Latest Department News

$767,095 in Penalties for Violations of Labor Laws

HONOLULU — The Hawaii State Department of Labor & Industrial Relations’ (DLIR) Disability Compensation Division today announced that it found alleged violations and issued penalties totaling $767,095 to R&R Construction Services for failing to allegedly provide Prepaid Health Care, Temporary Disability Insurance (TDI) and Workers’ Compensation insurance at a project at the Maile Sky Court hotel in Waikiki. R&R Construction Services has twenty days to appeal the citations.

“Law-abiding contractors who pay their fair share face unfair competition and workers suffer when deprived of their rights and benefits,” said Linda Chu Takayama, DLIR Director. “The visitor industry, and a pleasant visitor experience, is important to Hawaii, but Hawaii’s working people and law abiding contractors need to benefit fairly.”

The employer allegedly misclassified 65 construction employees as independent contractors. By doing so, they avoided requirements to provide Unemployment, Workers Compensation, Temporary Disability and Prepaid Health Care insurances. Other agencies are also investigation potential violations. The U.S. Department of Labor’s Wage and Hour Division, which enforces the wage and record-keeping provisions of the federal Fair Labor Standards Act, and the Hawaii Department of Commerce & Consumer Affairs, which enforces licensure, also have opened investigations regarding the employer.

“Legislators significantly increased the penalties for violations of workers’ compensation and temporary disability insurance laws by passing what became Act 187 just this year,” said Director Linda Chu Takayama. “We believe that the increase in penalties from $1 per day to $100 for TDI and worker’s compensation from $10 per day to $100 serves as a powerful incentive for employers to provide these coverages instead of just waiting till they are caught.”

DLIR’s Unemployment Insurance and Occupational Safety & Health Divisions are also in the process of investigating R&R Construction Services and findings are expected in the near future.

For more information about TDI, Prepaid Health Care and Workers’ Compensation visit:

https://labor.hawaii.gov/dcd/.

Equal Opportunity Employer/Program

Auxiliary aids and services are available upon request to individuals with disabilities.

TDD/TTY Dial 711 then ask for (808) 586-8866

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View DLIR news releases:

https://labor.hawaii.gov/blog/category/news/

Media Contact:

Bill Kunstman

Department of Labor and Industrial Relations

(808) 586-8845