Stay in Compliance: 5 Must-Know HR Rules for New Hawaii Business Owners

June 6, 2019 Written by Oralie Chapman

Launching a small business is a busy and exciting time for entrepreneurs. Once a business is ready to launch, it’s time to interview job candidates to help run the day-to-day operations. Hiring a team is a hugely important job that can make the difference between success and failure. Handling all the administrative work for hiring employees can be overwhelming, which is why many small businesses choose to partner with a Professional Employer Organization (PEO) who can handle the administrative tasks and ensure that they are in full compliance with Hawaii’s state and local labor laws.

Stay in compliance: 5 must-know HR rules for new Hawaii business owners


1. Create a company handbook

A company handbook is an important part of establishing a company culture and setting expectations for your employees. When clear expectations are communicated, employees will know how they are expected to perform. For example, how do you want employees to handle calling in sick or address an issue with a co-worker?


2. Following the Equal Employee Opportunity Commission (EEOC) and Hawaii Fair Employment Practice Law for hiring and firing


There are discrimination laws in place in Hawaii to prevent discrimination in the hiring and firing processes. For example, an employer may not turn an applicant away because of their race, religion, or sex nor can they retaliate against or fire an employee for being a whistleblower. Employers must be aware and follow the rules in the Equal Employee Opportunity Commission (EEOC) and Hawaii Fair Employment Practice Law in order to avoid legal trouble.


When writing interview questions, small business owners, human resources and hiring managers should carefully check that each question is relevant to the job and not fall into the category of personal.


When firing an employee, use your policy handbook to explain and document their misbehavior or sub-par job performance. Remember, firing an employee should never be seen as “personal” but rather because of a violation of company policy.


3. Get legal documents for Hawaii’s mandatory coverages in order

It is necessary to organize legal documents for Hawaii’s mandatory coverages including:


  • The Hawaii Prepaid Health Care Act (PHCA)
  • State-mandated short-term disability insurance (TDI or SDI)
  • Workers Compensation (WC) insurance


4. Ensure compliance with Hawaii’s labor laws

In order to avoid legal trouble, Hawaii small businesses must comply with the state’s labor laws. Practically speaking, this means that business actions must be in line with what each of the laws states and intends. Hawaii employer laws include:

  • Fair Labor Standards Act (FLSA)
  • Occupational Safety & Health Administration (OSHA)
  • Child Labor laws
  • Family/Medical Leave (FMLA)
  • Meals and breaks
  • Minimum wage
  • Unemployment
  • Vacation leave


5. Know how to classify employees for payroll

Mis-classifying employees can mean incorrectly paying them for overtime or vacation pay, among other things. Down the road, these mistakes can end up costing companies’ enormous administrative costs and potential fines. Avoid this hassle by ensuring that each employee is classified correctly from the day they are hired.


When in doubt, seeking the advice of an HR expert or partnering with a PEO is the best way to protect your small business from a lawsuit and keep your business running smoothly.


Partnering with Makai HR


Nervous about complying with Hawaii’s labor 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 401(k) plans to payroll, 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!