Hawaii OK’s Direct Deposit and Pay Card Wage Payment; Poster Update Required

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90364[2]In 2014, Hawaii’s legislature sanctioned the use of two widely used methods for the payment of employee wages – direct deposit and pay cards. Approximately eighty-five per cent of all employees in Hawaii are paid by direct deposit and approximately fourteen thousand employees in Hawaii receive their wages by pay cards. Given their widespread use, the legislature recognized a need to establish worker protections and also ensure that employees are able to authorize and are fully informed about the use of pay cards and direct deposits. The law that passed (HB 1814) also holds an employer responsible for any fees incurred if an employer has insufficient funds in the employer’s bank account for an electronic transfer of the employee’s wages. Finally, the law has been incorporated onto the mandatory Wage and Hour Laws posting.

Under the terms of the law, wage payment by direct deposit or pay card is permitted provided:

  • The employee is given written notification of the terms of the direct deposit or pay card transaction, including costs and restrictions;
  • The employee may cancel the arrangement at any time with reasonable notice;
  • Any fees may not reduce the employee’s wage below the statutory minimum wage;
  • The wage deposit is made on regular paydays and within seven days after the end of each pay period;
  • The employee is provided a pay statement at each payday which shows the name of the employer, name of the employee, total hours worked, overtime hours, straight-time compensation, overtime compensation, other compensation, total gross compensation, amount and purpose of each deduction, total net compensation, date of payment, and pay period covered;
  • With the employee’s written authorization, the employer may provide an electronically accessible pay statement and that is retained by the employer for a period of at least six years; and
  • The employer makes arrangements to pay wages in full upon discharge or within one working day following a discharge.

Hawaii employers are required to post the updated Wage and Hour Laws posting reflecting the change in law. Current Hawaii All-On-One™ Posters and Hawaii Mobile Poster Paks™ can be updated with a Wage and Hour Laws Peel ‘N Post.™ New Hawaii All-On-One Posters and Mobile Poster Paks have also been updated with the new text.