2018 Hawaii Revised Statutes
TITLE 21. LABOR AND INDUSTRIAL RELATIONS
388. Wages and Other Compensation, Payment of
388-6 Withholding of wages.

§388-6 Withholding of wages. No employer may deduct, retain, or otherwise require to be paid, any part or portion of any compensation earned by any employee except where required by federal or state statute or by court process or when such deductions or retentions are authorized in writing by the employee, provided that the following may not be so authorized, or required to be borne by the employee:

(1) Fines;

(2) Cash shortage in a common money till, cash box, or register used by two or more persons; or cash shortage in a money till, cash box, or register under sole control if the employee is not given an opportunity to account for all moneys received at the start of a shift and all moneys turned in at the end of a shift;

(3) Fines, penalties, or replacement costs for breakage;

(4) Losses due to acceptance by an employee of checks which are subsequently dishonored if employee is given discretion to accept or reject any check;

(5) Losses due to defective or faulty workmanship, lost or stolen property, damage to property, default of customer credit, or nonpayment for goods or services received by customer if such losses are not attributable to employee's wilful or intentional disregard of employer's interest; or

(6) Medical or physical examination or medical report expenses which accrue due to services rendered to an employee or prospective employee, where such examination or report is requested or required by the employer or prospective employer or required by any law or regulation of federal, state or local governments or agencies thereof. [L 1963, c 158, pt of §3; Supp, §95-5; HRS §388-6; am L 1972, c 121, §1; am L 1977, c 90, §1]

Case Notes

Section preempted by ERISA as it "relates to" an employee welfare benefit plan; FAA-mandated medical exam for pilots was "medical benefit" within meaning of ERISA employee welfare benefit plan. 12 F.3d 1498 (1993).

Paragraph (6) requirement that employer pay for medical examinations mandated by federal agency is preempted by §514(a) of the Employee Retirement Income Security Act. 807 F. Supp. 1501 (1992).

To the extent that the legislative history of §481B-14 is relevant to the question of whether employees may sue for unpaid wages under this section based on violations of §481B-14, that legislative history, as interpreted by the Hawaii supreme court, provides support for the idea that employees may do so. 810 F. Supp. 2d 1145 (2011).

Plaintiff resort employees' claim for unpaid wages brought pursuant to this section was not preempted by section 301 of the Labor Management Relations Act, 29 U.S.C. §185(a) where there was no need to look to, much less interpret the collective bargaining agreement (agreement) between defendant resort and plaintiffs, no need to consult or interpret the agreement, and defendants presented no evidence that there was a clear and unmistakable waiver in the agreement, as they are required to, if they seek to assert a party has waived a state-law right. 818 F. Supp. 2d 1240 (2010).

The legislative history of §481B-14, as interpreted by the Hawaii supreme court in Davis, allows plaintiff hotel employees to recover for unpaid service charges imposed without the requisite disclosure set forth in §481B-14, through a claim brought pursuant to §§388-10 and 388-11 and this section. 835 F. Supp. 2d 914 (2011).

Plaintiffs could not bring a statutory claim under this section where plaintiffs sought to recover wages to which they failed to demonstrate they were legally entitled. Plaintiffs could not assert a legal right as third party beneficiaries to the amounts allegedly withheld by virtue of defendant employer's failure to pay the bargaining unit wage rates as set forth in the 2006 Addendum to defendant employer's contract and plaintiffs did not seek to recover withheld wages pursuant to a contractual agreement between plaintiffs and defendant employer. 105 F. Supp. 3d 1165 (2015).

When a hotel or restaurant applying a service charge for the sale of food or beverage services allegedly violates §481B-14 by: (1) not distributing the full service charge directly to its employees as "tip income" (in other words, as "wages and tips of employees"); and (2) failing to disclose this practice to the purchaser of the services, the employees may bring an action under §§388-8 and 388-10 and this section to enforce the employees' rights and seek remedies. 130 H. 130, 306 P.3d 175 (2013).

Where employers imposed a service charge at banquets and other functions held at employers' hotels, and retained a portion of the service charge income without disclosing that practice to customers, the circuit court correctly held that "tip income" retained by employers in violation of §481B-14 constitutes "compensation" earned by service employees for purposes of bringing a claim under this section and §§388-10 and 388-11. 133 H. 1, 323 P.3d 792 (2014).