Federal Court Orders Two Hawaii Employers to Pay $3.8M for Widespread Overtime Theft

Over 1,100 workers in Hawaii were denied millions in overtime pay by two employers who tried to hide their actions. The U.S. Department of Labor found that Alacrity Employment Services in Kilauea and Hawaii Care and Cleaning in Lihue withheld wages from 1,133 employees between March 2021 and November 2024. Investigators discovered falsified pay records used to conceal the violations.

A federal court judgment in January 2025 ordered the employers to pay $1.9 million in back wages, $1.9 million in damages, and $50,000 in penalties for violating the Fair Labor Standards Act. This ruling offers relief for workers, but it also shines a light on a persistent problem: wage theft remains a widespread issue, affecting far more than just these employees.

For the workers involved, many in low-wage roles like cleaning or temporary staffing, the unpaid wages meant more than lost income. They faced tough choices, like covering rent or buying groceries. Across the country, wage theft takes a heavy toll. The Economic Policy Institute estimates that 2.4 million minimum-wage workers lose $8 billion yearly in the ten largest states, about $3,300 per person.

Certain groups face higher risks. Temporary workers report wage theft at rates up to 24 percent. Young workers, immigrants, and women, often in industries like hospitality or retail, are particularly affected. These losses deepen financial struggles, increase reliance on public assistance, and weaken community economies.

The Department of Labor’s Wage and Hour Division works to combat these violations. In the Hawaii case, it secured millions for workers, part of $1.5 billion recovered nationwide from 2021 to 2023. The division conducts inspections, investigates complaints, and enforces laws on minimum wage, overtime, and child labor. In 2024, it handled over 736 child-labor cases involving 4,030 children.

Enforcement has limits. Agencies recover only a small portion of the estimated $15 billion lost to wage theft each year. Resource constraints and shifting priorities can hinder efforts. Some business leaders argue that complex labor rules burden employers and advocate for streamlined standards. Worker advocates, however, seek stronger penalties and protections to prevent violations.

The Hawaii case highlights tensions in labor policy. Some policymakers and business groups favor fewer regulations, arguing they support economic growth. They point to actions like a 2024 Texas court decision that blocked a new overtime rule, reverting to lower salary thresholds. These groups often back simpler worker classification standards to give employers flexibility.

Worker advocates take a different view, pressing for robust protections. Legislation like the LET’S Protect Workers Act proposes higher penalties for wage violations and better whistleblower safeguards. Support for unions, which help workers negotiate fair pay, remains strong, with polls showing a +36 favorability rating. Both sides want fair wages but disagree on the best approach.

The Department of Labor is now reaching out to Hawaii workers owed money, encouraging them to contact the Honolulu District Office. This case marks progress, but it also reveals gaps in addressing wage theft. Millions of workers lose billions annually, and only a fraction is recovered, leaving many without recourse.

Wage theft’s impact extends beyond individuals, affecting families and communities. As policymakers debate labor laws, balancing employer needs with worker rights remains essential. The Hawaii case shows what’s possible when violations are exposed, but it also underscores the need for broader solutions to ensure fair pay.

Every worker deserves their full earnings. The fight in Hawaii is one piece of a larger effort to make that a reality for all.