Whether you manage a hotel in Waikiki or run a landscaping crew in Hilo, Hawaii workers’ compensation insurance isn’t optional—it’s required. Governed by Chapter 386 of the Hawaii Revised Statutes (HRS), this insurance protects your team when injuries happen and shields your business from fines, lawsuits, and operational shutdowns.
This guide outlines Hawaii workers’ comp coverage requirements, claim procedures, benefit structures, and the 2025 compliance rules all employers must follow.
Who Must Carry Workers' Comp in Hawaii?
Under state law, nearly all private-sector employers must maintain active workers’ comp coverage. If you have even one part-time employee, you are subject to these rules.
Coverage is required for:
- Full-time, part-time, and temporary employees
- For-profit and nonprofit organizations
Exemptions exist under Hawaii WC law exemptions, but only for specific cases:
- Sole proprietors and partnerships with no employees
- Independent contractors (but misclassification is a common audit trigger)
Failing to comply can result in steep Hawaii workers’ comp penalties, including stop-work orders, civil fines of $100 per employee per day with a minimum penalty of $500.
Industry-Specific Coverage Highlights
Certain sectors have heightened requirements due to injury risks:
WC for construction workers Hawaii: All contractors must insure field crews. Subcontractors must provide active coverage proof before beginning work.
Healthcare: Hospitals, clinics, and long-term care facilities must cover nurses, aides, and staff due to frequent lifting injuries and exposure risks.
Tourism and hospitality: Hotels, restaurants, and resorts must account for slip hazards and strain injuries, especially among housekeeping and food service staff.
These mandates are enforced by the Hawaii DLIR workers’ comp division under the Department of Labor and Industrial Relations.
What Hawaii Workers' Comp Insurance Covers
Your policy provides no-fault protection, meaning injured workers receive care and wage replacement regardless of who caused the accident. It also protects employers from litigation.
Standard Hawaii WC benefits include:
- Medical care: Surgery, rehab, prescriptions, therapy—fully covered with no employee copays
- Temporary Total Disability (TTD): 66 2/3% of average weekly wages, starting after a 3-day waiting period
- Permanent Disability: Calculated by physician-assigned impairment ratings
- Vocational rehab: Required when workers can’t return to their previous job role
- Death benefits: Death benefits include funeral and burial expenses up to statutory limits
Want a simple breakdown of how workers’ comp works? Read our guide: Workers’ Comp Insurance Basics – What You Should Know.
Common Injury Risks Across the Islands
Hawaii’s climate, labor demands, and tourism economy produce specific injury trends. Employers who understand these risks can proactively reduce claims.
Frequent injury types include:
- Slip-and-falls: Hotels, restaurants, and poolside facilities see frequent incidents due to wet floors and high foot traffic
- Overexertion: Nurses lifting patients or warehouse workers hauling shipments face significant physical strain
- Equipment injuries: Construction tools like nail guns and forklifts often cause serious trauma
- Environmental exposure: UV-related skin conditions and heatstroke are common among lifeguards, landscapers, and field workers
- Delayed care: Rural island geography can worsen injury outcomes when emergency treatment access is limited
Workers' Comp Premium Rates Factors in Hawaii
Premium cost factors:
- Payroll size and classification
- Claims history over the past 3 years
- Participation in safety and return-to-work programs
- Compliance with Hawaii business insurance mandates
There is no public fund. Employers must purchase coverage from private carriers or qualify for self-insurance through the DLIR.
Workers' Compensation Claims Process Hawaii
All employers must follow the Workers’ compensation claims process Hawaii defines in official DLIR regulations:
- Employee notification: Must inform employer as soon as practicable
- Employer filing: Employer’s Report of Industrial Injury
- Doctor selection: Employer designates the initial provider unless it’s an emergency
- Medical documentation: Must be accurate and submitted promptly
- Disputes: Handled by the DLIR Hearings Branch
- Appeals: Escalated through the Labor and Industrial Relations Appeals Board (LIRAB)
Stay Compliant and Protect Your Business
Here’s what every Hawaii employer should do right now:
- Confirm employee count and exemption status
- Review classification codes and adjust mislabeling
- Train staff to reduce preventable claims
- Monitor legislative updates for any new requirements
- Choose a carrier with experience in island-based claims
- Ensure compliance with Hawaii DLIR workers’ comp documentation standards
Call (855) 718-7552 to speak with a Hawaii workers’ comp expert.
