Workers' compensation in Hawaii: Mandatory. Coverage typically required at 1+ employee. Average premium runs $1.60 per $100 of payroll for a standard risk class. Market type: Competitive private market.
Requirement Status
Mandatory
Mandatory for employers
Employee Threshold
1+ employee
Mandatory coverage trigger
Avg Cost Per $100 Payroll
$1.60
Standard risk class average
| Rule | Detail | Notes |
|---|---|---|
| Market type | Competitive private market | Where you buy your policy |
| Employee threshold | 1+ employee | Trigger for mandatory coverage |
| Sole proprietor exemption | Sole proprietors without employees are exempt; shareholders who are also employees must be covered. | Self-employed coverage rules |
| Industry-specific rules | All industries with at least one employee are covered. Hawaii also has a separate mandatory Temporary Disability Insurance (TDI) requirement for employers. Domestic workers are covered. | Higher-hazard industries have stricter rules |
Premium rates are state class-code-based. Construction, roofing, and trucking pay $5–$20+ per $100 of payroll; clerical and office work pays $0.10–$0.40. Experience modification factors (EMR) further adjust your final rate.
Hawaii's workers' compensation system is overseen by the Disability Compensation Division of the Department of Labor and Industrial Relations (DLIR). The state has a fully competitive private insurance market but is distinguished by a mandatory dual-coverage requirement: all employers must carry both workers' compensation (for work-related injuries) and Temporary Disability Insurance (TDI, for non-work-related disabilities). This dual mandate makes Hawaii's total insurance compliance burden higher than most other states. Hawaii's economy is dominated by tourism, hospitality, construction, healthcare, and military support — all sectors with meaningful injury exposure. Hotel and resort workers, construction laborers, and healthcare workers generate the largest volume of workers' comp claims.
Hawaii employers must understand that TDI and workers' comp serve different purposes and are typically placed with separate carriers or handled through a state-administered fund for TDI. The WC premium on its own is comparable to national averages, but the combined cost of both programs is elevated. Sole proprietors without employees are exempt from workers' comp but may still have TDI obligations depending on their business structure. Hawaii's geographic isolation means that the insurer market, while competitive, is somewhat narrower than on the mainland — employers in specialized industries may find fewer carrier options. Maintaining strong safety programs is particularly important in Hawaii given the high cost of medical care on the islands.
Workers' comp pays medical bills + lost wages for injured workers and provides 'exclusive remedy' protection — employees generally can't sue you for workplace injuries when coverage is in place. Operating without required WC can mean massive personal liability and state penalties.
Hawaii is unique in requiring both workers' compensation AND Temporary Disability Insurance (TDI) for employers, covering both work-related and non-work-related disabilities.
Hawaii has an open competitive private market — workers' comp is sold by hundreds of private carriers and class-code rates are set by a state rating bureau (typically NCCI).
💡 Hawaii Pro Tip
Yes. Hawaii requires all employers with one or more employees to carry workers' compensation insurance. Additionally, Hawaii mandates Temporary Disability Insurance (TDI) coverage, which covers non-work-related disabilities. Both requirements are enforced by the Disability Compensation Division of the DLIR, and non-compliant employers face fines and civil liability.
Hawaii's average workers' comp cost is approximately $1.60 per $100 of payroll. Hotel, resort, and construction work carry higher rates, while office and professional services are under $0.50. Employers should budget for both workers' comp and the mandatory TDI premium when calculating total insurance costs — the combined obligation is higher than most mainland states.
Sole proprietors without employees are not required to carry workers' comp in Hawaii. However, if you operate as a corporation and are also an employee of that corporation, you must be covered under the company's policy. The TDI requirement has separate rules — you should consult the DLIR or a Hawaii-licensed insurance broker to ensure full compliance with both mandates.
Compliance rules from Hawaii's Department of Labor and Workers' Compensation Commission; rate averages reflect 2026 NCCI loss cost filings and state fund rate orders.
Sarah Mitchell
Editorial Lead, Catastrophe & Commercial Property
This article was researched and written by the Cover Forge USA editorial team against federal sources (NAIC, CMS, FEMA, DOL, SSA, state DOIs) and standard policy forms. Bylines organize content by topic — they do not assert individual licensure. See our editorial-policy for details.
Reviewed May 2026
We monitor rate filings in all 50 states. Get notified when rates change in your area — and discover new ways to save.
Free forever. Unsubscribe with one click. No spam, ever.
Important Disclaimer
This site provides general educational information only and is not a substitute for professional insurance advice. All rates, data, and coverage details are estimates and may not reflect your actual premiums. Insurance availability and pricing vary by state, insurer, and individual risk factors. Always consult a licensed insurance professional in your state before making coverage decisions.