What Business Owners Need to Know about Hawaii Termination Laws

November 29, 2018 Written by Oralie Chapman

Terminating an employee is one of the most difficult jobs handled by business owners, managers and Human Resources (HR) departments. The last thing any business owner wants is to be sued for wrongful termination which is why it’s so important to understand Hawaii termination laws.

Hawaii is an “employment-at-will” state


“Employment-at-will” gives both employers and employees the right to end the employment relationship without giving a reason or notice. Employers need to know that Hawaii statutes and courts have changed the traditional doctrine in some ways. For example, even if there is no clear employment agreement made between a business and an employee, some actions and depictions (such as policies written in an employee handbook or promises of job security) can obligate the employer to the employee as if a written contract was signed by both parties. If an employer makes a promise that can be reasonably seen as an incentive for a potential employee to give up something of value by moving, leaving a good job or turning down a desirable job offer, the promise may be considered a “contract.” Collective bargaining agreements can also place limits on an employment-at-will relationship.


Hawaiian courts have also made public policy exceptions that amend the states “at-will” status. These exceptions say that employers may not terminate an employee for carrying out certain protected activities, such as performing a duty in the public interest like agreeing to jury duty, exercising what is deemed a right under the law or reporting employer violations.


What to avoid when terminating an employee


Terminating an employee for activities deemed necessary or legally appropriate:


Employers are prohibited from discharging, retaliating against or disciplining an employee who has used or requested a benefit or engaged in an activity that is granted as a right or that is deemed necessary or legally appropriate by Federal, state or local laws. They may also not punish an employee for notifying authorities about a workplace violation. Hawaii follows general whistleblower protections to protect employees from employers who try to punish them for speaking out.


Breaking an employment contract without informing the employee of the breach of contract:


If an employment contract exists – whether written, oral or as part of a collective bargaining agreement - employers must inform their employee of the breach of contract that caused the termination.


Terminating an employee for a reason protected under discrimination laws:


Most employees in Hawaii are protected under discrimination statutes, with the exception of employees of the federal government. Most wrongful termination cases involve some aspect of discrimination. Avoid terminating an employee for these reasons as you would be breaking Hawaii’s discrimination laws:


· Sex, sexual orientation or gender identity

· Credit history / bankruptcy

· Arrest record

· Ancestry

· Race and / or skin color

· Marital or civil union status

· Status as a victim of domestic or sexual violence

· Age

· Religion or religious beliefs

· Disability


Partnering with Makai HR


Not excited about employer laws? That’s okay; we’ve got you covered through HR outsourcing! When you partner with Makai HR you can get on with the business you are trying to grow while we take care of your employee needs from payroll to taxes, health insurance/benefits and worker’s compensation. You also gain peace of mind that you are in compliance with all of Hawaii’s employer laws (if you’ve ever looked you know that the list is very long). When choosing a PEO to partner with, there are many things to consider including cost, services and technology solutions.


With the cost of doing business in Hawaii at record highs, we know how important it is to keep labor costs in line with revenue. Our plans are priced competitively and include value-added services like time-in/time-out systems. Our three tiers of PEO service plans are tailored to the size of your business and specific needs. We offer a 100% paperless solution which means that your employees can manage their needs through a computer, tablet or phone. We can truly improve your employees work benefits while freeing you up to run your business.


What are you waiting for? Companies who partner with a PEO benefit from 7-9% faster growth, 10-14% lower employee turnover; and they are 50% less likely to go out of business. Contact us today to get started!