What Business Owners Need to Know about Hawaii Termination Laws
Updated: Jan 28
Terminating an employee is one of the most difficult jobs handled by business owners, managers and Human Resources (HR) departments. The last thing any business owner wants is to be sued for wrongful termination which is why it’s so important to understand Hawaii termination laws.
Hawaii is an “employment-at-will” state
“Employment-at-will” gives both employers and employees the right to end the employment relationship without giving a reason or notice. Employers need to know that Hawaii statutes and courts have changed the traditional doctrine in some ways. For example, even if there is no clear employment agreement made between a business and an employee, some actions and depictions (such as policies written in an employee handbook or promises of job security) can obligate the employer to the employee as if a written contract was signed by both parties. If an employer makes a promise that can be reasonably seen as an incentive for a potential employee to give up something of value by moving, leaving a good job or turning down a desirable job offer, the promise may be considered a “contract.” Collective bargaining agreements can also place limits on an employment-at-will relationship.
Hawaiian courts have also made public policy exceptions that amend the states “at-will” status. These exceptions say that employers may not terminate an employee for carrying out certain protected activities, such as performing a duty in the public interest like agreeing to jury duty, exercising what is deemed a right under the law or reporting employer violations.
What to avoid when terminating an employee
Employers are prohibited from discharging, retaliating against or disciplining an employee who has used or requested a benefit or engaged in an activity that is granted as a right or that is deemed necessary or legally appropriate by Federal, state or local laws. They may also not punish an employee for notifying authorities about a workplace violation. Hawaii follows general whistleblower protections to protect employees from employers who try to punish them for speaking out.
Breaking an employment contract without informing the employee of the breach of contract:
If an employment contract exists – whether written, oral or as part of a collective bargaining agreement - employers must inform their employee of the breach of contract that caused the termination.
Terminating an employee for a reason protected under discrimination laws:
Most employees in Hawaii are protected under discrimination statutes, with the exception of employees of the federal government. Most wrongful termination cases involve some aspect of discrimination. Avoid terminating an employee for these reasons as you would be breaking Hawaii’s discrimination laws:
Sex, sexual orientation or gender identity
Credit history / bankruptcy
Race and / or skin color
Marital or civil union status
Status as a victim of domestic or sexual violence
Religion or religious beliefs
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