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I.
Legislative Update
Smoke-Free Workplace Law In Effect
Since November 16, 2006, Hawaii employers have been required to prohibit all smoking within the workplace, and within 20 feet of all doorways, windows, and ventilation intakes of the workplace. In addition, employers must post “Smoking Prohibited By Law” at the entrances of the workplace.
There are a few exceptions to this ban on smoking, but two of the most significant exceptions are that hotels and motels may designate up to 20% of their rooms as “smoking allowed” rooms, and smoking may be permitted in outdoor areas of employment.
Failure to comply with the law can result in penalties of up to $500 and may result in the suspension or revocation of any business licenses or permits.
Employees Have Option To Choose To Substitute Paid Leave For Unpaid Hawaii Family Leave
From July 1, 2007, employees will have the right to determine whether or not to substitute accrued paid leave (such as vacation, sick or personal leave) for unpaid Hawaii Family Leave, and cannot be required to do so by their employers.
All Hawaii employers subject to the Hawaii Family Leave law (i.e., all employers with 100 or more employees) must review their family leave policies and handbooks to ensure that their family leave policies comply with the new law. Typically, family leave policies require an employee to substitute any accrued and available paid leave for unpaid family leave. While “forcing” employees to take accrued and available paid leave complies with the FMLA, this would be illegal under the revised Hawaii Family Leave law.
Family leave policies must be carefully drafted or revised to ensure that employees will have the option to substitute accrued and available paid leave for any leave that qualifies for protection under the Hawaii Family Leave law, but the policies still can allow the employer to choose to substitute paid leave for FMLA-qualifying leave that does not also qualify as Hawaii family leave.
Employers Permitted To Use On-Site Drug Screening Tests
Effective July 1, 2007, Hawaii employers are now allowed to use on-site drug saliva swab and urine drug screening tests for any purpose, as long as the tests are used pursuant to manufacturer’s instructions. (Previously, on-site tests were only permitted for pre-employment screening.) If the screening test results in a positive, the employee must report to a licensed laboratory within 4 hours for confirmatory testing, and if the employee fails to report for the confirmatory testing, the employer may take adverse employment action against the employee. However, an employer cannot take any adverse action against the employee based solely upon the results of the on-site drug screening test, and either must wait for the results of the confirmatory test or take adverse action against the employee for failing to appear for the confirmatory test.
This new law gives employers greater latitude in administering “reasonable suspicion” and “random” drug tests at the workplace for those employers who have drug testing policies and engage in drug testing of employees.
Payments For Leased Employees Now Exempt From General Excise Tax
Effective July 1, 2007, any amounts paid by employers to an employee leasing company as payment for wages, salaries, payroll taxes, and benefits for the leased employees are exempt from Hawaii’s general excise tax.
Workers’ Compensation System Undergoes Significant Changes
Effective June 30, 2007, significant changes to Hawaii’s workers’ compensation system will be implemented, with potentially greater cost for most employers/insurers.
Some of the significant changes to the workers’ compensation system will be:
- Employers/insurers will be required to pay for “disputed” medical treatment until the DLIR issues a decision on the disputed treatment;
- Employers/insurers are prohibited from terminating TTD benefits without an order from the DLIR, except under limited circumstances;
- Employers/insurers will be assessed greater penalties for not making timely TTD payments;
- IME (Independent Medical Examination) physicians must be mutually selected by the insurer and claimant, or if no agreement, the IME physician will be selected by the DLIR; and
- Employers/insurers will be required to pay for the cost of both the IME and the cost of having the employee’s treating physician present at the IME.
These changes could create delays and increased costs for workers’ compensation claims, which would result in increased workers’ compensation premiums for employers.
II.
Case Law Update
Sexual Harassment: One Touch Is Too Much
The Hawaii Supreme Court lowered the threshold for what constitutes “severe” sexual harassment in Arquero v. Hilton Hawaiian Village LLC. In Arquero, the Court determined that when a male waiter in the Hilton’s Rainbow Lanai Restaurant squeezed a female waiter’s “right buttock for approximately one second,” that incident was severe enough to qualify as unlawful sexual harassment under Hawaii law. The Court held that when determining whether conduct is “severe,” the focus should be on the harasser’s conduct, and not on the effect the conduct has on the plaintiff or on the work environment.
The Hawaii Supreme Court’s broad definition of unlawful sexual harassment, which is broader than the definition of sexual harassment under Title VII, puts even more pressure on employers to: (1) prevent inappropriate sexual behavior in the workplace; and (2) respond quickly and appropriately to take steps reasonably calculated to end the harassment. An employer’s failure to properly prevent and/or remedy improper sexual conduct between co-workers could result in significant liability for the employer.
[Note: Under Hawaii law, an employer is still strictly liable for harassment by its supervisors, regardless of whether it forbade the conduct or took steps to remedy the conduct. While there has been some push recently by employer lobbying groups to change Hawaii’s law to conform to the more forgiving federal standard, no change appears to be imminent.]
III.
Labor Bulletin
Now that the hotel industry negotiations have been concluded and Local 5 and the Turtle Bay Resort have settled their many disputes, the labor situation in the Islands is much less volatile than it was a year ago. The big news on the labor front is that labor organizations like UNITE HERE, the ILWU, the Teamsters and others are abandoning traditional organizing methods and turning to "card check/ neutrality" agreements. In fact one of the items agreed upon in the recent hotel negotiations was a provision obligating the employers to observe "neutrality" with respect to any new hotels they might operate on Oahu.
Under neutrality agreements the employer and the union agree to allow the union access to the workforce for the purpose of gathering authorization cards. When and if the union collects cards from a majority of the workers---by whatever means it chooses---a third party, like an arbitrator, is called in to verify the signatures and the union becomes the bargaining representative ; no secret ballot election for the affected employees and no protection from harassment as required under the National Labor Relations Act.
In effect, the employees and the dues money they represent are delivered to the union on a silver platter. Although a recent effort to make neutrality agreements part of Federal law failed, we can expect a similar effort here in Hawaii which is still the most heavily unionized state, per capita, in the country".
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