Creating A Better Hawaii Through Private Enterprise

INJUSTICE IN MINIMUM COMP

By Richard O. Rowland, CLU, CFC, Rowland & Associates

Every time legislation on the "minimum wage" comes up, legislators allude to the "fact" that a working couple with two children could not live decently on the existing minimum wage. So, they say, it is apparent that the minimum wage must be increased so that it becomes a "subsistence wage." Individual productivity is never mentioned by these people. Accordingly, I recommend that they push for a $25 to $50 per hour minimum wage. Then we could rename it the "living wage."

And, since it is so important to peg this compensation up to the four-person family standard, it now occurs to me that our legislators are guilty of gross discrimination against a minority in our society. That minority is the small business owner. Many, if not most of them do not earn the current minimum hourly wage and most certainly don't enjoy the guaranteed 7% of rate of return on invested capital that the PUC "allows" our monopoly businesses such as Hawaiian Electric, GTE Hawaiian Telephone and Matson Navigation.

Whoopie! Now we are really on to something exciting and creative. We have a mandatory living wage of, say, $25 per hour for all, including small business owners.

And, we establish a system for each small business owner who earns less than this standard to report his or her hours worked each week to the "State of Hawaii Fair and Non-Discriminatory Compensation office (SOHFANDCO) which will then issue each of them a State check for the difference between their weekly bottom line and the "living wage." Further, once each year the small business owner will be able to petition the PUC for reimbursement if his return on capital invested is less than 7%. Again a State check would be issued to make up any shortfall.

Using this system, I predict we would soon find that operating a small business would become more and more popular until, finally, 90% of our working (i.e. non government) population would be claiming to be small business. Then small business would be a majority and one more oppressed minority would have been eliminated from our society. What a wonderful achievement by the People's Government of Hawaii.

THE BLOOD BANK VS. THE IRS

Guest Commentary By Ken Schoolland, Schoolland International Partnership

I'm always impressed with how nice everyone is over at the Blood Bank of Hawaii. They call politely to arrange an appointment for blood donations and when you walk through the door everyone greets you warmly with a smile. They thank you for coming in and rapidly process your file. The nurses check meticulously for any health problems and then they administer the I-V, apologizing for any discomfort.

They provide lots of information and cheerily stand by to explain the multitude of uses for your blood and how it benefits so many people in so many ways. You have confidence that every drop is treated efficiently and with respect. In minutes it's over and you sip juice from a cordial snack bar while gazing at the Wall of Honor, a great display of names and photos of proud donors--one of whom has donated more than 200 pints. This generous donor even prefers not to have his name released publicly.

Imagine how different it might be if everyone was compelled to give blood. It would give a whole new meaning to the "Internal Revenue Service." Citizens might receive a terse notice in the mail notifying them of their next regular extraction. The reception for bloodpayers would surely be austere-- long lines, hours of waiting, confused information, and a cold, haute indifference reminiscent of draft board physicals.

Shuffling through corridors to the next hall where one could file papers to get some blood refunded, you could feel certain of extraordinary waste, careless mix-ups, disrespect, and helplessness. The Wall of Honor disappears as everyone does their best to postpone, or avoid, the extraction.

Fair and effective? No way! The absence of freedom is debasing, not inspiring. It's as true of money as it is with blood.

Overtime compensation earned in a particular workweek must be paid on the regular scheduled payday in which the workweek ends. Overtime payments may not be deferred to a later date.

A single workweek is a period of seven consecutive 24-hour periods, totaling 168 hours. An employer may not average out workweeks to avoid paying overtime compensation.

In calculating overtime compensation, commissions must be included as part of the employee's regular rate, regardless of whether the commissions are paid on a daily, weekly, monthly or other basis.

Bonuses must also be added to the employee's regular rate when calculating overtime compensation. These bonuses included attendance, production, quality, safety and efficiency bonuses. Excluded from this provision are bonuses paid as part of a bona fide suggestion plan or discretionary bonuses that an employer pays such as a Christmas bonus. Prizes or gifts are also considered bonuses, whether in the form of cash or merchandise. The value of merchandise is calculated at the cost to the employer for such items.

Work that is not required, but is allowed to happen, is considered work time. The law states that if an employer knows, or has reason to know, that an employee is continuing to perform work beyond their normal hours, it is considered working time. A policy stating that overtime work will not be permitted or that overtime work will not be compensated unless authorized in advance, does not change the employeeÕs right to overtime compensation. Employers are not allowed to sit back and accept the benefits of additional work without providing required compensation. Management has the burden, and the power, to enforce rules and to exercise control over their employee's working time.

Employees who voluntarily come in before their regular starting time or who remain after their regular ending time, do not have to be paid for such time as long as they do not engage in any work during these periods.

Short rest periods or breaks of five or ten minutes are customarily paid as working time. Such rest periods promote the efficiency of the employee. Bona fide meal times, with a duration of 30 minutes or more, are not considered work time if the employee is relieved from all duties during this period. If the employee is required or allowed to perform any duties, including answering the telephone, they are not considered to have been relieved from duty and are eligible for overtime compensation. The State of Hawaii does not mandate breaks or meal periods during an eight-hour workday.

Attendance at lectures, meetings, training programs and other similar activities is considered working time if the employer requires that the employee attend.

Time spent changing clothes on the employer's premises would be considered working time if such an activity is an integral part of the employee's principal activities, for example safety or sterile clothing. If the changing of clothes is merely a convenience for the employee, it is not considered directly related to their principal activities and is therefore not compensable.

By developing and enforcing appropriate policies, and keeping accurate records of all hours worked by employees, you can protect yourself and your company from claims of unpaid overtime.

For questions regarding overtime or other policies, contact Shared Resources, providing personnel management and recruiting for HawaiiÕs businesses. SBH members are eligible to receive a free policy manual review, conducted by Pamela Gottlieb. For more information, call 396-3000.