An Employer’s Compliance Starter Guide: Hawaii

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Nobody ever said running a business was a walk in the park. As an employer, you have a lot of balls in the air, and compliance is just one of them. One really, really important one that, if dropped, could cost you a whole lot of money. 

In addition to federal regulations, each state has their own share of employment laws that business owners need to be aware of. Here, we’re highlighting some of these key state-specific requirements and laws, and offering guidance to help you keep up.

Bear in mind, this list is not comprehensive, and there may be local or industry-specific employment requirements that your business needs to comply with. It’s best to consult with counsel to ensure compliance with all applicable laws, as Justworks does not provide legal advice.  

Payroll Tax Accounts

Because Justworks reports state unemployment taxes on behalf of customers who utilize Justworks’ PEO services, employers will need to close their Hawaii unemployment and withholding accounts prior to joining the Justworks platform. Linked here are the steps you’ll need to take: Hawaii - State Unemployment Insurance.

Recruiting & Hiring Practices

Salary History Ban 

Hawaii law prohibits employers from inquiring about a job applicant's salary history. 

Hawaii State Legislature: HB 2137 Relating to Equal Pay 

Pay Transparency

Hawaii's pay transparency law mandates that employers with 50 or more employees include an hourly rate or salary range that reasonably reflects the expected compensation in job listings. Internal job postings for promotions or transfers are excluded from this requirement.

Hawaii Department of Labor and Industrial Relations:  Act 203 Pay Transparency

Mineral*: Hawaii Pay Equity and Transparency

Ban-the-Box

Hawaii law prohibits discrimination based on arrest and court records and restricts the circumstances in which employers can inquire about a job applicant’s conviction records. 

Hawaii Civil Rights Commission: Arrest and Court Record Discrimination Prohibition 

Independent Contractors

When classifying workers as employees or independent contractors, there are a few things to consider, including the different tests that apply under different federal and state employment laws, and potential penalties and other liabilities for misclassifying employees as independent contractors. Certain state laws apply tests that are more stringent than the guidance provided by federal agencies, such as the IRS and Department of Labor, to apply in conjunction with federal laws.

You can read our general Help Center article on contractors, and view information on how to determine if someone is a contractor or employee in Hawaii in the relevant section at the link below.  

Hawaii Department of Labor (DOL): Handbook for Employers

Pay & Benefit Requirements

Minimum Wage and Overtime

Hawaii employers can find the most up-to-date minimum wage and overtime requirements at the link below. 

Hawaii DOL, Wage Standards Division: Hawaii Pay Requirements.

Health Benefits

The Hawaii Prepaid Health Care Act (HPHCA) requires employers to offer subsidized health coverage to most Hawaii employees. 

Justworks helps employers meet this requirement by providing access to a Kaiser Permanente medical plan. 

Hawaii DOL, Disability Compensation Division: FAQ about the Prepaid Health Care
Kaiser Permanente: Hawaii

Leave

State Disability Insurance

Hawaii Temporary Disability Insurance (TDI) is a partial wage-replacement program for Hawaii workers for nonwork-related injury or sickness, including pregnancy. The disability leave may run for a maximum of 26 weeks, at 58% of the employee’s average weekly wages up to the maximum weekly benefit amount annually set by the Disability Compensation Division.

Justworks uses Pacific Guardian Life to administer TDI benefits. If an eligible employee wishes to make a claim, they can find the form and instructions here

Justworks customers should use the following details for their employer of record information:

Justworks Employment Group LLC
P.O. Box 7119
Church Street Station
New York, NY 10008-7119

Claims will come directly to Justworks and we will reach out to the customer for details when necessary.

Hawaii DOL Disability Compensation Division: FAQ about Temporary Disability Insurance

Family Leave 

In addition to federal law requirements, Hawaii law requires employers with 100 or more employees to allow eligible employees to take up to four weeks of unpaid, job-protected family leave during any calendar year for reasons related to their own or a family member’s illness, or the birth or adoption of a child.

Hawaii DOL, Wage Standards Division: Hawaii Family Leave Law FAQ

Victim Protections Leave

Hawaii law requires employers to provide job protected leave to victims of (or the parents of minor children who are the victims of) domestic abuse, sexual assault, or stalking, among other job protections.

Hawaii Civil Rights Commission: Hawaii Victim Protections FAQ

Separation

Hawaii employers should familiarize themselves with specific compliance requirements for separating employees. 

Under Hawaii law, employers must pay final wages to separated employees as follows:

  • Employees who are involuntarily separated must receive their final pay immediately, or not later than the next working day. 
  • Employees who give at least one pay period of advance notice of their intent to voluntarily quit or resign must receive their final pay on their last day of work.
  • All other employees who voluntarily quit or resign must be paid no later than the next regular payday. 

Hawaii employers are not required to pay accrued but unused vacation upon separation.  As a best practice, employers should clearly set forth in writing any policy with respect to unused vacation.

Hawaii DOL, Wage Standards Division: Final Wages FAQ

Business Closings and Layoffs

Federal and state law in Hawaii impose certain notice and other obligations on businesses before conducting large-scale business closures, layoffs, or relocations.  Under Hawaii law, businesses with as few as 50 employees may be covered. For more information on these laws, visit the links below. 

U.S. Department of Labor: Worker Adjustment and Retraining Notification (WARN) Act Advisor

Hawaii Workforce Development Council: The WARN Act

 

Disclaimer

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.