Does Hawaii require workers’ compensation insurance?
Yes. Hawaii requires workers' compensation from the first employee: the DLIR Disability Compensation Division says any employer with one or more employees, full-time or part-time, permanent or temporary, must provide coverage unless the work is excluded under HRS 386-1. Sole proprietors, general partners, and owners of at least 50% of a corporation or LLC are excluded automatically, with no waiver form to file. Going uninsured costs at least $500, or $100 per employee per day.
Updated . Written by Andre Beukers, principal at Redoubt, a commercial insurance agency in Salt Lake City, not a government office.
How many employees before Hawaii requires workers' comp?
There is no head-count floor. The Disability Compensation Division (DCD) states that any employer with one or more employees, full-time or part-time, permanent or temporary, must provide workers' compensation, unless the work falls in an exclusion listed in HRS 386-1.
Contractors carry a second exposure. HRS 386-1 deems a contractor the employer of everyone performing work under its contract, including its subcontractors' employees. The direct employer is liable first, but if a subcontractor has no coverage, the injured worker's claim moves up the chain to the contractor above it.
Source: Hawaii DLIR, About Workers' Compensation, checked .
Which owners, officers, and family members are exempt in Hawaii?
HRS 386-1 leaves out of "employment" a sole proprietor, an individual partner in a general partnership, an LLC member with at least a 50% distributional interest, an LLP partner with at least a 50% transferable interest, and an individual who owns at least 50% of a corporation. A corporate officer who owns at least 25%, works without wages, and runs a corporation with no employees is also out. These exclusions apply on their own, and the statute bars an employer from making a worker incorporate, form an LLC, or become a partner as a condition of the job.
Other work outside the Act includes household help paid less than $225 in cash per calendar quarter, real estate salespeople and brokers paid solely by commission, and unpaid volunteers for religious, charitable, educational, or nonprofit organizations. The list has no separate carve-out for relatives, so a family member on payroll is treated like any other employee unless one of these exclusions fits.
Source: HRS 386-1, checked .
What happens to a Hawaii employer with no workers' comp?
An employer without coverage owes a penalty of the greater of $500 or $100 for each employee for every day the gap continues, under HRS 386-123, collected by the DLIR director and paid into the Special Compensation Fund. The director may, for good cause, waive the part above $500 once the employer comes into compliance. After 14 days in default, a circuit court can bar the employer from carrying on business anywhere in Hawaii until coverage is in place.
DCD's own example: two employees without coverage for five days is $1,000, which is $100 times 2 employees times 5 days.
Source: HRS 386-123, checked .
Who enforces workers' comp in Hawaii?
The Department of Labor and Industrial Relations' Disability Compensation Division administers the workers' compensation law. It also runs Hawaii's Temporary Disability Insurance and Prepaid Health Care laws, which are separate obligations. DCD says an employee whose employer has no coverage can go to its Investigation Section in Honolulu or the nearest neighbor-island DLIR office.
Source: Hawaii DLIR, Disability Compensation Division, checked .
Where do Hawaii employers buy coverage?
Hawaii is a private-market state with no state fund. DCD tells employers to buy a policy from a carrier authorized to write workers' compensation in Hawaii, and points them to the Department of Commerce and Consumer Affairs for the list of carriers; DCD itself sells nothing. The alternative is self-insurance, approved by the DLIR director on proof of solvency or a security deposit (Form WC-21). HRS 386-121 also allows self-insurance groups and captive group programs.
Source: Hawaii DLIR, DCD Frequently Asked Questions, checked .
Who sets the class codes and rates in Hawaii?
Hawaii is an NCCI state. NCCI makes the advisory filing for Hawaii's workers' compensation system and publishes a state advisory report on each one; the latest is dated August 28, 2026. Class codes and experience mods on a Hawaii policy follow NCCI's manuals.
Source: NCCI, State Advisory Resources: Hawaii, checked .
Is there an exemption or waiver form in Hawaii?
No. DCD's forms list has no owner waiver or exemption certificate, because the HRS 386-1 exclusions apply without a filing. The paperwork runs the other way: under HRS 386-4 an employer may elect to cover an excluded owner or worker by insuring them and filing the notice of insurance required by HRS 386-122. The election binds until January 1 and then year to year; ending it takes a notice to the DLIR director at least 60 days before the calendar year ends, posted where the affected people will see it.
An excluded owner can still be asked for a certificate of insurance by a general contractor or a client. That is a contract requirement, not a DCD rule; what satisfies it depends on the contract.
Source: HRS 386-4, checked .
Sorting out Hawaii workers' comp for your business
Tell Redoubt what the business does, who works in it, and what the Hawaii requirement in front of you says. We will say whether a policy, a waiver, or an exclusion fits.
This is general insurance information, not legal advice or a coverage determination. Statutes, agency instructions, policy forms, and the facts of the business control.
Workers’ comp requirements in every state
Each state page gives the employee threshold, the owner and officer exemptions, the penalty for going without, the rating bureau, the market, the enforcing agency, and the exemption filing, each with its statute or agency source.
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
The hub, and the Hawaii pages that go deeper
Hawaii workers’ comp FAQ
Do I need workers' comp in Hawaii with one part-time employee?+
Yes. The Disability Compensation Division says an employer with one or more employees, full-time or part-time, permanent or temporary, must provide coverage. The only way out is an exclusion listed in HRS 386-1, such as household help paid under $225 in cash a quarter.
Does a Hawaii LLC owner have to carry workers' comp on themselves?+
Not if the owner is an individual member with at least a 50% distributional interest; HRS 386-1 excludes that member automatically. A member below 50% is not on the exclusion list, so check with your carrier or DCD before leaving them off the policy.
Is there a state fund in Hawaii?+
No. DCD states that Hawaii has no state fund. Employers buy from a carrier authorized to write workers' compensation in Hawaii, self-insure with the director's approval, or join an approved self-insurance group.
Am I responsible if my Hawaii subcontractor has no workers' comp?+
You can be. HRS 386-1 makes a contractor the employer of everyone working under its contract, including subcontractors' employees. The subcontractor is liable first; if it has no coverage, the claim can come to you, so collect certificates before work starts.
What is the fine for no workers' comp in Hawaii?+
The greater of $500 or $100 per employee per day without coverage, under HRS 386-123. After 14 days in default, a court can also stop the business from operating in Hawaii until it is insured.