The Polynesian Plaza Hotel in Waikiki remained closed this week and has not announced a reopening date as the state investigates the business for compliance with labor and licensing laws.
Last month, the city ordered guests to vacate the hotel, which is located at 2131 Kalakaua Ave., in the wake of allegations that ongoing construction made conditions unsafe for visitors to occupy the property. The hotel, which has a permit for the renovation work, was not assessed any fines by the city because it cleared the violation upon removal of its guests. A hotel staff member said Wednesday the reopening hasn’t been announced.
Bill Kunstman, spokesman for the state Department of Labor and Industrial Relations, said state penalties could be assessed if investigators determine Polynesian Plaza avoided requirements to provide unemployment, workers compensation, temporary disability and prepaid health care insurances.
Kunstman said the U.S. Department of Labor Wage and Hour Division and the state Department of Commerce and Consumer Affairs’ Regulated Industry Complaints Office also might be investigating Polynesian Plaza.
The owner and manager of the 56-room hotel, L.A. Koreana, which heads up the YHB Hospitality Group, could not be reached for comment.
Polynesian Plaza is the latest construction project to face major scrutiny since Honolulu’s building market heated up. The Associated General Contractors of America in June announced that Honolulu was the nation’s third-fasted growing construction market. Demand has ensured top pay for skilled laborers, but has lead to development challenges such as worker shortages and higher project costs.
“We do note that the building industry does seem to be prone to problems due to the fluidity of the work, employers and employees, as well as the highly competitive nature of the industry, but problems exist in other sectors as well,” Kunstman said. “We are striving to increase our enforcement capacities without significantly increasing personnel and increasing compliance across all industrial sectors.”
State and federal investigators also raided the Maile Sky Court in Waikiki in August in response to complaints from workers and the Pacific Resource Partnership, which represents the Hawaii Regional Council of Carpenters. DLIR found that Texas-based R&R Construction Services, a contractor on the $25 million project, allegedly misclassified 65 construction employees as independent contractors.
These two latest labor investigations are similar to an Ala Moana Center investigation in which the state fined contractors thousands of dollars in 2015 for widespread violations of labor laws and requirements. But if guilty, Polynesian Plaza and Maile Sky Court employers would face much stiffer penalties because findings fall under new state guidelines established by Act 187, which took effect July 1.
The new rules raised temporary disability insurance penalties from not less than $25, or $1 per employee per day, to not less than $500, or $100 per employee per day; and increased workers’ compensation penalties from not less than $250, or $10 per employee per day, to not less than $500, or $100 per employee per day.
The increased penalties resulted in the state fining R&R Construction Services $767,095 for workplace irregularities. The contractor is appealing.
