When was the last time someone in your organization checked in on Hawaii’s termination laws? Many states enact brand new regulations or modify existing ones each year during their legislative sessions. If you’re not careful and don’t review your organization’s termination practices and policies at least once a year, you could face expensive legal bills.

Understanding At-Will Employment in Hawaii

Generally speaking, Hawaii is an “at will” employment state, meaning an organization can terminate a person’s position at any time, for any lawful reason, without citing a specific reason or rationale. But there are some conditions: the termination cannot be linked to any protected class status, including whistleblower activities.

Final Pay Obligations for Hawaii Employers

According to Hawaii Revised Statutes 388-3, you are required, as an employer, to provide a final paycheck to any employee who has been terminated the day of the separation, or if that’s not possible, within seven days of their dismissal to make sure they receive all compensation they are due within a reasonable timeline and without delay. This payment must include their total remaining earned wages, in addition to any unused vacation time they accrued as required by their employment agreement. If an organization is found to be out of compliance with this, the Hawaii Department of Labor and Industrial Relations states it is possible for the organization to face legal action from the person who was terminated.

As the employer, your organization must make all lawful deductions on behalf of the worker, including health insurance and retirement contributions, covering the person’s full term of employment. Any additional deductions that the person is owed can result in potential legal implications. When in doubt, review any and all written contracts and agreements and make sure copies are made and provided to the former employee.

Wrongful Termination and Discrimination Claims

An employee who is let go from their position within an organization might argue they were wrongly fired. They might file a claim citing discrimination, breach of contract, retaliation or other justification for arguing they were doing a good job and deserved to keep their position. Accusations that deal with any kind of discriminatory premise would be reviewed Title VII of the Civil Rights Act and the Americans with Disabilities Act; employees are protected under the Hawaii Employment Practices Act from being let go from their job for reasons due to their race, age, sex, nation of origin or disability. One way in which Hawaii differs from other states is that protected classes in Hawaii include marital status, arrest or court records, credit history and HIV status.

As an employer, your organization must be thorough and make sure none of those protected class factors are present in the rationale used or given for terminating the employee or you could be facing a huge lawsuit. Accusations of retaliation — an employee believes they were fired because they tried to report an unsafe situation or an abusive working environment — will be investigated to determine if they are in violation of federal whistleblower statutes.

Advance Notice of Termination or Layoffs

Not all states require organizations to provide advanced notice if someone’s position is about to be eliminated. If an organization is about to layoff or terminate the jobs of multiple people, it might be required to file a federal Worker Adjustment and Retraining Notification (WARN), but there are conditions: the organization must have 100 or more employees at the time of the filing and must provide at least 60 days’ notice if the organization is going to lay off a large number of people or close altogether. Generally speaking, in Hawaii, the Revised Statutes do not require any advanced notice before an employee is terminated from their job. If there is a union involved, however, there might be stipulations in the contract between the union and your organization that require advance notice be provided.

If your organization intends to fire a union employee, make sure to negotiate that termination with the union in order to avoid claims of breaching that contract, something that could result in larger problems down the road. Organizations based in Hawaii have to be in compliance with both state and federal guidelines when it comes to terminating contract employees; if this is the case, it might be a good time to call your legal team to ensure compliance.

Severance Agreements and Legal Protections

A severance agreement must include explicit reasons why a person’s job is being eliminated and it must comply with both state and federal laws as applicable. These reasons include discrimination (HRS Chapter 378), family leave (HRS Chapter 398), and the state’s hour and wage laws (HRS Chapter 287), and any severance agreement with a non-disparagement clause cannot prohibit the employee from discussing any situations of sexual harassment or assault in the workplace.

Constructive Discharge and Employer Liability

As an at-will state, employees may leave their position at any time, without advance notice, and any organization can fire a person at any time. However, if an employee feels forced to resign their position due to “constructive discharge” associated with intolerable working conditions, the organization may face legal ramifications for the employee’s lost income and emotional distress if the organization is found to be delinquent in providing an emotionally and physically safe working environment.

At-Will Doesn’t Mean Without Consequences

Being an “at-will” state does not mean organizations in Hawaii can fire people without impunity or repercussions. The best option going forward is to make sure your organization is in full compliance of both state and federal laws should the day come where an employee is going to be asked to leave.

Partner With a Hawaii-Based Recruiter You Can Trust

Staying compliant with Hawaii’s unique employment laws is essential but so is having the right people on your team. At Bishop & Company, we understand the local labor market, employment regulations, and what it takes to build successful teams in Hawaii.

If you are looking to hire dependable, qualified professionals, we’re here to support your success.