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State fines Maile Sky Court contractor $767,095

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A contractor on the $25 million Maile Sky Court hotel renovation project has been fined $767,095 by the state Department of Labor and Industrial Relations for workplace irregularities.

State and federal investigators raided the Maile Sky Court in Waikiki last month 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 allegedly misclassified 65 construction employees as independent contractors. By doing so, the contractor avoided requirements to provide unemployment, workers compensation, temporary disability and prepaid health care insurances.

“Law-abiding contractors who pay their fair share face unfair competition and workers suffer when deprived of their rights and benefits,” said DLIR Director Linda Chu Takayama. “The visitor industry, and a pleasant visitor experience, is important to Hawaii, but Hawaii’s working people and law abiding contractors need to benefit fairly.”

R&R Construction Services has twenty days to appeal the citations.

More findings from DLIR’s Unemployment Insurance and Occupational Safety & Health Divisions are expected soon. The company also could face further sanctions from the U.S. Department of Labor’s Wage and Hour Division, which enforces the wage and record-keeping provisions of the federal Fair Labor Standards Act, and the Hawaii Department of Commerce & Consumer Affairs, which enforces licensure.

California-based Clearview Hotel Capital LLC owns the budget Waikiki hotel, which it purchased for $76 million in 2015. The company, which could not immediately be reached for comment, had previously announced that its ownership plans included a comprehensive renovation followed by the repositioning of the hotel into a Holiday Inn Express.

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