HR Glossary for doing business in Hawaiʻi 

401(k)
A retirement savings plan to help employees accumulate financial resources for retirement.

Administrative Services Organization (ASO)
A third-party company that handles administrative and human resource tasks for a business without taking on the legal responsibility for the client’s employees.

Affordable Care Act (ACA)
A mandate that employers with 50 or more full-time employees offer affordable, essential coverage to full-time employees and their dependents up to age 26 or be subject to penalties.

Americans with Disability Act (ADA)
A federal civil rights law that prohibits discrimination against people with disabilities in a variety of areas, including employment.

Applicant Tracking System (ATS)
A software application that helps human resources (HR) departments manage the hiring and recruitment process. ATS can help with many tasks, including job postings, resume scanning and sending offer letters.

At-will Employment
A legal doctrine that an employment relationship may be terminated by the employer or employee at any time and for any or no reason.

Background check
A background check is a process that verifies a person’s identity and history by examining public and private sources.

Benefits Administration
Benefits administration is how a company manages and implements its employee benefits program.

Certificate of Insurance (COI)
A nonnegotiable document issued by an insurance company or broker verifying the existence of an insurance policy.

Certified Payroll
Certified payroll reports confirm that contractors and subcontractors working on federally funded projects are paying their employees prevailing wages in accordance with the Davis-Bacon and Related Acts.

COBRA
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events.

Davis-Bacon Act
The Davis-Bacon Act (DBA) is a federal law that requires contractors and subcontractors to pay their laborers and mechanics at least the prevailing wages and fringe benefits for the area where the work is being done. The DBA applies to contracts for federally funded or assisted public works or building construction, alteration, or repair that exceed $2,000.

DBA
DBA is an acronym meaning “Doing Business As.” It’s a way to label your business with a name that is different from your legal business name.

Dependent Care Flexible Spending Account (FSA)
A pre-tax benefit account used to pay for eligible dependent care services, such as preschool, summer day camp, before or after school programs, and child or adult daycare.

Direct Deposit
An electronic payment method that transfers money directly into a bank account.

EEO-1 Survey
A mandatory annual report that covered employers must file with the U.S. Equal Employment Opportunity Commission (EEOC) and the U.S. Department of Labor.

Employee Assistance Program (EAP)
An Employee Assistance Program (EAP) is a voluntary, work-based program that offers free and confidential assessments, short-term counseling, referrals, and follow-up services to employees who may have personal and/or work-related problems.

Employee Handbook
A document that outlines a company’s policies, procedures, and expectations for employees.

Employer Services Assurance Corporation (ESAC)
A non-profit organization that accredits Professional Employer Organizations (PEOs) and provides financial assurance for them.

Employment Status
Classification of the relationship between a worker and the organization they work for. It often defines how much time the employee works each week (e.g., full-time, part-time, seasonal) and the benefit(s) they are entitled to, but can also refer to a worker’s status as an employee or independent contractor.

Exempt
An employee who is not subject to the minimum wage and/or overtime provisions of the Fair Labor Standards Act (FLSA).

Exit Interview
A conversation or survey that a company conducts when an employee leaves, whether voluntarily or involuntarily.

Fair Labor Standards Act (FLSA)
A federal law that sets standards for minimum wage, overtime pay, child labor, and recordkeeping for employees in the private sector and most federal, state, and local government agencies.

Family and Medical Leave Act (FMLA)
A federal law that allows eligible employees to take up to 12 weeks of unpaid, job-protected leave per year. Employees can take leave for a number of reasons, including the birth or adoption of a child, to care for a family member with a serious health condition, for a serious health condition that prevents the employee from working, etc…

FICA
FICA is a U.S. federal payroll tax. It stands for the Federal Insurance Contributions Act and is deducted from each paycheck.

Flexible Spending Account (FSA)
A tax-advantaged account that allows employees to set aside pre-tax money for medical expenses, dependent care, and other qualified expenses.

Form 941/944
IRS forms used by employers to report payroll taxes and withholdings, with Form 941 being filed quarterly and Form 944 annually for small businesses.

Form HW-4
Hawaiʻi’s version of the federal W-4, used by employees to determine the state income tax withholding.

Form HW-14
Hawaiʻi state form used to report annual wages for employees who work in Hawaiʻi.

Form I-9
A form used to verify an employee’s identity and eligibility to work in the United States.

Form UC-B6
A form used by employers in Hawaiʻi to report unemployment insurance wages for employees.

Form W-2
A federal tax form that reports an employee’s annual wages and the amount of taxes withheld from their paycheck.

Form W-4
A form used by employees to specify the amount of federal income tax withholding from their paycheck.

General Ledger
A general ledger (GL) is a company’s accounting system for recording, organizing, and tracking all financial transactions.

Gross Income
For employees, gross income is the total pre-tax earnings from wages, tips, and other forms of income and is also referred to as “gross pay.” For businesses, gross income is total revenue minus cost of goods sold and is also known as “gross profit” or “gross margin.”

Hawaiʻi Family Leave Law (HFLL)
A state law that provides up to four weeks of unpaid job-protected leave per year to eligible employees. Employees can use this leave for the birth or adoption of a child and to care for a family member with a serious health condition.

Hawaiʻi Occupational Safety and Health (HIOSH)
Hawaiʻi Occupational Safety and Health (HIOSH) is a state program under the Department of Labor and Industrial Relations (DLIR). It aims to ensure workplace safety and health by enforcing federal OSHA standards, investigating workplace hazards, and providing educational resources to employers and employees. HIOSH helps reduce workplace injuries, illnesses, and fatalities while promoting safe work environments across various industries in Hawaiʻi.

Health Insurance Portability and Accountability Act (HIPAA)
A federal law that protects patients’ health information and gives patients certain rights over their records.

HR Symphony
HR Symphony is an online human resources information system (HRIS) that helps businesses manage their employees and payroll.

Human Resource Information System (HRIS)
HRIS stands for human resources information system, and it’s a software that helps companies manage employee data and core HR processes.

Human Resource Outsourcing (HRO)
A service that allows a business to partner with a third party to manage HR functions, such as payroll, benefits administration, and employee relations.

Independent Contractor
An independent contractor is a business owner, or contractor who provides services to another entity as a non-employee.

Job Description
A job description is a written description of a job which includes information regarding the general nature of the work to be performed, specific responsibilities and duties, and the employee characteristics required to perform the job.

Labor costing
The process of calculating the total expense of employees, including wages, benefits, taxes, and additional costs like overtime, to understand the cost of labor within an organization.

Leave of Absence
Authorized time away from work, which can be either paid or unpaid, granted for various reasons such as personal health, family matters, or other circumstances defined by company policy or law.

Long Term Disability
An insurance benefit that provides partial income replacement to employees who are unable to work for an extended period due to serious illness or injury.

Maternity Leave
Maternity leave is a period of time a new mother takes off from work following the birth of her child, allowing her to recover from childbirth, care for the baby, and bond with them; it can be either paid or unpaid, and is often part of a company’s benefits package that may include short-term disability and/or family leave time.

Medical Leave of Absence
A “medical leave of absence” is a period of time when an employee is allowed to take a break from work due to a serious health condition, enabling them to receive medical treatment, recover from an illness or surgery, or manage a chronic health issue; this leave may be governed by laws like the Family and Medical Leave Act (FMLA) which provide a set amount of unpaid leave for qualified medical reasons.

Minimum Wage
Minimum wage is the lowest amount an employer can legally pay an employee per hour.

New Hire
A newly employed individual in a company, recently onboarded to start their role within the organization.

Noncompete Agreement
A contractual clause that prevents an employee from working for a competitor and/or starting a similar business for a set period of time after leaving their job. Non-competes are also known as covenants not to compete.

Nondisclosure Agreement (NDA)
A legal contract ensuring that specific information remains confidential, preventing employees from sharing proprietary or sensitive information.

Non-exempt
A term used to describe employees who are subject to the Fair Labor Standards Act (FLSA) and are required to receive minimum wage and/or overtime pay.

Nonprofit Organization
An entity that operates for charitable, educational, or social purposes rather than profit, reinvesting earnings into its mission rather than distributing profits to owners or shareholders.

Occupational Safety and Health Administration (OSHA)
A U.S. government agency that sets and enforces workplace safety and health standards.

Open enrollment
Open enrollment is a yearly period when people can change, renew, or cancel their health insurance. It can also be a time to sign up for other benefits, such as dental or vision coverage, if offered by the employer.

Organizational Chart
A diagram showing the structure of an organization, illustrating employee roles, hierarchies, and departments.

OSHA Form 300A
A summary report of work-related injuries and illnesses, posted annually by employers.

Overtime (OT)
An employer who requires or permits an employee to work overtime is generally required to pay the employee premium pay for such overtime work. Employees covered by the Fair Labor Standards Act (FLSA) must receive overtime pay for hours worked in excess of 40 in a workweek of at least one and one-half times their regular rates of pay.

Paid Time Off (PTO)
Paid leave provided to employees to use for vacation, illness, or personal time, typically accrued over time.

Pay Transparency
A policy where companies disclose salary information, aiming to promote fairness and equity in compensation.

Payroll cycle
The recurring schedule by which employees are paid (e.g., weekly, bi-weekly, or monthly).

Personal Protective Equipment (PPE)
Safety gear (like masks, gloves, and goggles), usually provided by the employer, to protect workers from potential workplace hazards.

Pre-Tax Commute Plan
A benefit that lets employees set aside pre-tax income to cover commuting costs like public transportation and parking.

Professional Employer Organization (PEO)
A PEO, or professional employer organization, is a type of full-service human resource outsourcing known as co-employment. In this arrangement, the PEO performs various employee administration tasks, such as payroll and benefits administration, on behalf of a business.

Quarterly Federal Tax Return
A quarterly federal tax return is a payroll tax that every employer needs to submit to the IRS four times a year using IRS Form 941.

Remote Work Policy
A remote work policy is a set of guidelines established by a company that outlines expectations and procedures for employees who work outside of a traditional office setting, including details on working hours, communication protocols, data security measures, and the use of company resources when working remotely; essentially, it defines how employees can work from home or another off-site location while still meeting company standards.

Risk Management
Risk management is the process of assessing exposures to loss within an organization and determining how best to eliminate, manage or otherwise reduce the risk of an adverse event having a negative impact on the business. Risk reduction is achieved through policies and procedures, or through contractual transfer of the risk to a third party, typically an insurance company. Risk elimination is achieved through avoidance.

Salary History Ban
A law in Hawaiʻi that prohibits employers from asking job applicants about previous salary details to promote fair and equitable hiring practices. Other states have similar laws in place. 

Seasonal Employment
Temporary work that aligns with certain seasons or events, like holiday retail or summer tourism, often lasting just a few months.

Short Term Disability
A type of insurance that provides partial income replacement if an employee cannot work due to a temporary illness or injury.

SOC 1 Type 2
A SOC 1 Type 2 (System and Organization Controls 1, Type 2) report is an audit report conducted by an external auditor to evaluate a service organization’s internal controls related to financial reporting. It reviews the design and operational effectiveness of controls over a specific period, typically 6-12 months. Companies handling sensitive financial data often undergo SOC 1 Type 2 audits to demonstrate their reliability and compliance with financial standards, providing assurance to clients about data security and integrity.

State Unemployment Insurance (SUI)
A state-administered program funded by employers, providing temporary financial assistance to eligible unemployed workers.

Stay interview
A conversation between an employer and employee to identify factors that keep the employee engaged and ways to improve their work experience.

Temp vs. Temp to Hire vs. Direct Hire
Temp – A “temp” is a temporary employee, which may be through a third-party staffing agency, hired for a specific period or project with no expectation of becoming a regular status (e.g., full-time, part-time) employee.

Temp-to-hire: A “temp to hire” is a temporary employee who may be offered a regular status (e.g., full-time, part-time) position after a trial period, often through a third-party staffing agency.

Direct hire – A “direct hire” refers to an employee who is directly hired by a company into a regular status (e.g, full-time, part-time) position without a temporary phase through a third-party agency first.

Temporary Disability Insurance (TDI)
The Hawaiʻi Temporary Disability Insurance (TDI) law was enacted in 1969, which requires employers to provide partial “wage replacement” insurance coverage to eligible employees for nonwork-related injury or sickness, including pregnancy.

Temporary Employment
Temporary employment, also known as temporary work or gigs, is a short-term working arrangement between an employer and an employee. Temporary employees are hired for a specific period of time, usually between one day and one year, to fulfill a job role.

Time and Attendance
Time and attendance is the process of tracking employee work hours.

Unemployment Insurance (UI)
Unemployment Insurance is a joint state-federal program that provides cash benefits to eligible workers. Each state administers a separate unemployment insurance program, but all states follow the same guidelines established by federal law.

Verification of Employment
A process that verifies present or past employment status to a third party.

Volunteer Time Off (VTO)
A policy that allows employees to take time off to volunteer.

Workers’ Compensation Insurance
Insurance that provides cash benefits and/or medical care for workers who are injured or become ill as a direct result of their job.