The state is investigating 28 Ala Moana Center contractors for non-compliance with labor laws, casting a dark cloud over the opening of the mall’s $570 million Ewa wing.
The probe involves building contractors that skirted the law by paying workers under the table and not providing basic health coverage or other required insurance for employees.
The Department of Labor and Industrial Relations confirmed this week its investigation has so far found that at least seven employers did not pay either temporary disability insurance or state-mandated health insurance for full-time workers.
The state wouldn’t provide the names of the contractors involved or the number of workers potentially affected.
“We are investigating 28 contractors’ compliance with labor laws,” said, Bill Kunstman, DLIR spokesman. “The low hanging fruit is determining whether they have temporary disability and prepaid healthcare insurances. The unemployment insurance investigations take longer as we do a desk audit then go to the employer to look at their records.”
The state previously said it was inspecting contractors for safety violations, but has yet to determine penalties.
Tyler Dos Santos-Tam, executive director of the Hawaii Construction Alliance, representing five union groups, said the organization has been looking into these issues for several weeks now.
“We were informed by some of the workers who were working on the individual stores within the Ewa wing that they were getting cash payments and not being provided with insurance and health coverage,” he said. “It was all very concerning to us. We were very disappointed to learn these problems are indeed happening. It’s very likely there will be more issues about whether contractors are properly licensed and whether contractors are paying proper taxes. For us it’s a huge project — the biggest private construction going on.”
Thirty-five shops opened Thursday in Ala Moana’s Ewa wing which expanded the former Sears space to 650,000 square feet on three levels. Construction is ongoing with new stores slated to open next year.
Nordstrom will relocate to a new 185,000-square-foot space in March, while Foodland Super Market Ltd. — one of the center’s original tenants — is returning to the shopping mall with the opening of Foodland Farms in July. Shirokiya will open a $35 million Japanese food village in June.