Hawaii: State and Federal Laws Increase the Minimum Salary Requirements for Exempt Employees

By Ashley C. Chinen - Marr Jones & Wang LLP

June 27, 2024

On June 21, 2024, Hawaii Governor Josh Green signed into law a bill that increases the minimum monthly salary employees must earn under the “guaranteed monthly salary” exemption of the Hawaii Wage and Hour Law. Previously, employees who earned a guaranteed compensation totaling $2,000 per month were exempt under the Hawaii Wage and Hour Law, which meant the minimum wage and overtime requirements of the state law did not apply to such employees. Under the amended law, employees must now earn a guaranteed minimum salary of $4,000 per month in order to qualify for the “guaranteed monthly salary” exemption specific to Hawaii law. The law went into effect on June 21, 2024.

Under the counterpart federal statute, the Fair Labor Standards Act (“FLSA”), the U.S. Department of Labor (“DOL”) has also increased the minimum salary thresholds for the “white collar” exemptions from minimum wage and overtime requirements. Effective July 1, 2024, the minimum salary threshold for the executive, administrative, and professional exemptions under federal law will increase from $35,568 to $43,888. The minimum salary threshold for employees to qualify under the “highly compensated exemption” will increase from $107,432 to $132,964 annually. These thresholds are scheduled to increase again on January 1, 2025, and again in 2027.

Lawsuits have been filed challenging the increases to the minimum salary thresholds under the FLSA. Unless a court issues a nationwide injunction stopping the increases from going into effect, employers should assume the new federal minimum salary thresholds will go into effect on July 1, 2024. Note that the new DOL regulations do not change the other requirements for applicability of the “white collar” exemptions; those requirements must still be met, in addition to the increased salary threshold, for an exemption to apply.

Many Hawaii employers are covered by both federal and state law. Employers are encouraged to promptly review their exempt employees’ salaries under the applicable law(s) (state and/or federal) and assess whether salaries need to be increased to maintain exempt status. Employers can instead choose to reclassify exempt employees as non-exempt, but should consider the potential implications to employee morale, meal and rest break practices, monitoring work time, calculating and managing overtime hours and costs, and other benefits or policies that may be affected.

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