Large businesses operating on the Big Island have indefinitely furloughed thousands of employees since the COVID-19 pandemic began, according to records filed with the state Department of Labor.
The federal Worker Adjustment and Retraining Notification Act requires employers with 100 or more full-time workers to give the state 60 days written notice before conducting mass layoffs.
These notifications — WARN notices — are required when a business terminates all employees, when a business lays off 500 or more employees, and when a business lays off between 50 and 499 employees if that number constitutes one-third or more of the employer’s full workforce.
Since mid-March, 207 such notices have been submitted to the Department of Labor, approximately 30 of which involved businesses operating on the Big Island. By comparison, 28 WARN notices were filed throughout the entirety of 2019.
Of the Big Island-related notices, the vast majority involve businesses in the hospitality industry.
The largest single group of layoffs was announced in August by the Hilton Waikoloa Village, which announced its intention to indefinitely furlough 740 employees.
Most employers categorized the layoffs as temporary furloughs — of the nearly 6,000 Big Island jobs impacted by the WARN notices, less than 200 were permanently terminated.
However, most employers acknowledged that they had no timeframe for when the furloughs may end, and pointed out that some or all of their temporary layoffs could become permanent in the future depending on changes to the pandemic situation.
A July WARN notice from Big Island Candies stated: “(In March) we truly expected this to be temporary and last less than six months, but at this point we are unable to predict when we will be able to return to pre-COVID operations, and we fear the temporary layoffs will have extended beyond six months.”
Big Island Candies President Sherrie Holi said that the business has already begun to hire employees back, in order to prepare for the holiday season, the busiest time of year for Big Island Candies.
While she said she hopes to be able to bring back all of the employees furloughed — Big Island Candies filed a WARN notice in July stating its intention to furlough 111 employees, but Holi said the number of actual furloughs was less — by November, she added that it’s anybody’s guess whether that will be possible.
A common thread in many of the notices is an expression of confusion regarding the state or county’s COVID-related rules.
From a September notice by the Mauna Kea Resort, which warned that potentially 539 employees would be furloughed: “We anticipated at the time of the closure and furloughs that the hotel closures would be temporary, as the initial government “stay-at-home,” travel prohibition, mandatory self-quarantine periods for travelers, closures of restaurants and nonessential businesses were set to expire after a short period of time.”
It went on: “However, since then, government orders restricting travel and business operations have been expanded and extended multiple times. … These continued restrictions have led to sudden and severe revenue losses. Furthermore, it is now apparent that the State of Hawaii has no clear timeline for reopening plans, making it likely that our operations will remain limited or shut down for some time due to the government restrictions and other reasons beyond our control.”
While Gov. David Ige has announced that restrictions for out-state-travelers will be loosened on Oct. 15 — exempting travelers who receive a negative COVID-19 test within 72 hours of arriving in Hawaii from the current mandatory 14-day quarantine requirement — hotels are not necessarily going to reopen immediately on that day.
Craig Anderson, chairman of the Big Island chapter of the Hawaii Lodging and Tourism Association, said hotels generally need occupancy rates of 30% to 35% in order to lose less money than remaining closed.
“It’s not about generating profits at this point,” Anderson said. “It’s about reducing loss.”
While Anderson, who is also vice president of operations at Mauna Kea Resort, said that most hotels are “ready to pull the trigger” on reopening, with marketing strategies in mind to entice travelers back to the island, he added there are still open questions surrounding the state’s reopening strategy.
For example, Anderson pointed out, Ige said last week that children younger than 12 will not be tested for COVID-19, and thus will be subject to a 14-day quarantine, regardless of whether their parents are as well. Because of this, Anderson went on, families with small children — who typically make up a significant percentage of hotel guests — will not be visiting the island after October.
Ross Birch, executive director of the Island of Hawaii Visitors Bureau, said that he anticipates most hotels will not be able to bring back any more than half of their furloughed employees until occupancy rates rise.
“The numbers are going to be pretty low early on,” Birch said. “But I think by November and December, there will be more people coming back, and the state’s testing policies will be well in place by then.”
Anderson said that, after the announcement about the Oct. 15 date, the Mauna Kea Resort received a spike in both reservation inquiries and cancellations.
While he said the cancellations are largely because of lingering uncertainty about the state’s reopening process, he added that, until the day arrives, there is no way to know how many of the recent reservations will actually pan out.
The Big Island businesses that filed WARN notices since March include:
• Mauna Lani Auberge Resorts — 638 furloughs, 13 permanent layoffs
• OneSpaWorld — 104 furloughs statewide, including at spas at Mauna Kea Beach Hotel, Waikoloa Beach Marriott and the Westin Hapuna Beach Resort.
• Luana Hospitality Group — an unspecified number of furloughs statewide, including at Kailua-Kona restaurants Huggo’s, Huggo’s on the Rocks, Paradise Gourmet Catering and Kai Eats &Drinks, and Waikoloa restaurant Lava Lava Beach Club.
• JTB Hawaii Group Companies — nine furloughs, one permanent layoff
• The Grand Naniloa Hotel — 125 furloughs
• Y. Hata and Co. — 17 permanent layoffs
• Pleasant Holidays at Royal Kona Resort — eight permanent layoffs
• ‘Aha Punana Leo, Inc., — 57 furloughs
• Flying Food Group LLC — 34 permanent layoffs
• Watabe Wedding Corporation — 240 furloughs statewide, an unspecified amount of which worked at the business’ Kona branch
• Team Clean Inc. — two permanent layoffs at United Laundry Kona
• Sheraton Kona Resort and Spa — 250 furloughs
• Waikoloa Beach Marriott Resort &Spa — 296 furloughs, 45 layoffs
• Hilton Grand Vacations — 249 furloughs
• Hilton Waikoloa Village — 740 furloughs
• Fairmont Orchid — 443 furloughs
• Big Island Candies — 111 furloughs
• Hawaiian Airlines — 192 furloughs statewide, an unspecified amount of which worked at Hilo and Kailua-Kona airports
• Avis Budget Car Rental LLC — 63 furloughs
• Mauna Kea Beach Hotel — 539 furloughs
• Westin Hapuna Beach Resort — 400 furloughs
• Royal Kona Resort — 179 furloughs
• Four Seasons Resort Hualalai — 655 furloughs
Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.
