Hawaii Workers Compensation Guide

Workers Compensation Requirements in Hawaii

Hawaii requires workers' compensation for all employers with one or more employees. Hawaii also uniquely requires Temporary Disability Insurance (TDI) — a separate program that covers non-work-related disabilities. Both workers' comp and TDI are required in Hawaii. The Disability Compensation Division of the Department of Labor and Industrial Relations oversees both programs.

Workers Comp Rates in Hawaii

Workers compensation premiums in Hawaii are calculated based on payroll, job classification (NCCI or state classification codes), and the employer's experience modification factor. The average rate of approximately $2.08 per $100 of payroll is a statewide blended average — actual rates vary significantly by job classification. A clerical office worker might pay $0.20-$0.40 per $100, while a roofing contractor might pay $15-$25 per $100.

For example, an employer with $1 million in payroll at the average rate of $2.08 per $100 would pay approximately $20,800 annually before experience modification adjustments. Employers with better-than-average loss experience (experience mod below 1.0) pay less; those with worse experience pay more.

Average Workers Comp Rates by City in Hawaii

Workers comp rates vary by location within Hawaii due to differences in local injury rates, medical costs, and insurer competition. The following estimated average rates per $100 of payroll reflect blended rates across all job classifications.

City	Est. Avg. Rate per $100 Payroll
Honolulu	$2.18
Pearl City	$2.08
Hilo	$1.98
Kailua	$2.05
Kāne'ohe	$2.02

Rates shown are blended averages across job classifications. Actual rates vary significantly by occupation type. Consult a licensed workers' compensation specialist for employer-specific quotes.

What Makes Hawaii Unique

Hawaii is one of only five states (along with California, New Jersey, New York, and Rhode Island) that requires Temporary Disability Insurance (TDI) — coverage for disabilities that are NOT work-related. This dual system means Hawaii employers must provide both workers' comp (for work injuries) and TDI (for non-work disabilities). Understanding the distinction between these programs is essential for Hawaii employers.

Workers Comp Benefits in Hawaii

Hawaii workers' comp provides temporary total disability at 66.67% of average weekly wage. TDI (non-work-related) provides 58% of average weekly wages for non-work disabilities. Medical benefits cover necessary treatment.

Employee Rights in Hawaii

Hawaii workers can choose their own physician. Disputes are handled by the Labor and Industrial Relations Appeals Board with access to circuit courts.

How Workers Comp Premiums Are Calculated in Hawaii

Workers compensation premiums in Hawaii follow this basic formula: (Payroll / 100) × Classification Rate × Experience Modification Factor = Premium. The experience modification factor (EMR or X-Mod) compares your actual loss experience to the expected loss experience for your industry. An EMR of 1.0 is average; below 1.0 means better-than-average safety record (lower premiums); above 1.0 means worse-than-average (higher premiums).

Job classification codes are assigned based on the type of work employees perform. Accurate classification is critical — misclassifying employees into lower-risk categories can result in premium audits and significant back-premium assessments. An employer with employees in multiple classifications must track payroll by class code throughout the year.

How to Reduce Workers Comp Costs in Hawaii

Hawaii employers must manage both workers' comp and TDI — understanding which program applies to each claim is important. Safety programs reduce workers' comp costs. TDI costs are managed through return-to-work programs for non-work-related disabilities. Working with a broker experienced in Hawaii's dual disability system is valuable.

• Implement a formal workplace safety program — documented safety training reduces injury frequency and improves experience modification over time.
• Develop a return-to-work program — getting injured workers back on modified duty reduces temporary disability claim duration and cost.
• Report all injuries promptly — early reporting enables timely medical treatment and claims management, reducing claim severity.
• Review job classifications annually — ensure employees are classified in the correct (not simply the lowest-cost) classification code.
• Work with a loss control specialist — many insurers offer free safety consultation services that identify hazard reduction opportunities.

The information on this page is provided for general informational purposes only and reflects estimated industry averages and state requirements as of 2026. Workers compensation laws, rates, and requirements change frequently and vary significantly by employer size, industry, and job classification. Rate estimates shown are blended averages and do not represent actual quotes for any specific employer. Always consult a licensed workers' compensation insurance professional and your state's workers' compensation regulatory agency for current, employer-specific information.