If you have even one employee in Hawaii, yes, you need workers compensation insurance. Hawaii's Workers' Compensation Law, Chapter 386 of the Hawaii Revised Statutes, requires nearly every employer to carry it once they have one or more employees, with no minimum headcount, no payroll minimum, and no exception for part-time, temporary, or family workers. The real questions are how owners are treated and how to buy it, not whether the rule reaches an ordinary employer.
Who this is for: Any Hawaii employer, from a brand-new business making its first hire to an established company double-checking the rules for its mix of staff.
The short version
- Coverage is required once you have any employee; there is no headcount trigger and no payroll minimum.
- Part-time, temporary, and seasonal workers all count, and there is no general family-member exception.
- Hawaii has no farm, construction, or general casual-labor exemption, so those workers count like anyone else.
- Owners are usually left off by default: sole proprietors, partners, and qualifying LLC members and large shareholders are excluded, and can opt in.
- Hawaii has no state fund, so you buy from a private insurer, with HEMIC as the insurer of last resort.
Who counts as an employee
Hawaii defines an employee broadly. Almost anyone in the employment of another person for pay is an employee, and coverage attaches once you have one. Hours, season, and family relationship do not change that. There are only a few narrow carve-outs, and they are smaller than owners usually expect.
| Worker type | Counts toward the mandate? | Notes |
|---|---|---|
| Full-time W-2 employee | Yes | Coverage required from day one |
| Part-time or temporary worker | Yes | No hours or headcount exception |
| Family member you employ | Yes | No general family carve-out in Chapter 386 |
| Farm or construction worker | Yes | Hawaii has no agriculture or construction exemption |
| Household worker under 225 dollars a quarter | No | A domestic worker paid under 225 dollars in cash per quarter is exempt; at that amount or more they are covered |
| A genuine independent contractor | No | Only if they beat Hawaii's control and nature-of-work test |
The narrow exceptions
Hawaii's exemptions are short. The closest thing to a household exemption is personal or family household service where the worker is paid less than 225 dollars in cash in the current quarter and in each completed quarter of the prior year; a regular household worker paid that amount or more is a covered employee. Beyond that, unpaid volunteers for a religious, charitable, or nonprofit group, commission-only real estate agents, and the owner categories below are excluded. There is no general farm, construction, or casual-labor exemption, so most crews are covered.
How Hawaii treats business owners
Owners are the one place the answer changes with your structure, and Hawaii leans one direction: owners are usually left off coverage by default. A sole proprietor is not their own employee. A partner in a partnership is excluded, as is an LLC member who holds at least half of the company and a shareholder who owns at least half of a corporation. The trap is the corporate officer who does not own that much: a paid officer, or an officer of a corporation that has other employees, is generally a covered employee. Excluded owners who want their own injuries covered can opt in through voluntary coverage. Whatever the owners choose, every non-owner employee must be covered from day one.
A Hilo example
Illustrative, not a quote. A Hilo cafe owner hires two counter staff and one part-time weekend baker and assumes part-timers might not count until she has more of them. In Hawaii they count from the first one, so she needs a policy right away. She puts coverage in place before anyone starts, and when the weekend baker burns a hand on a hot tray, comp pays the medical bills and part of the lost wages. Because she was insured, the injury is handled as a comp claim rather than a direct lawsuit, and we make sure her cafe payroll is rated on the right kind of work.
Real questions Hawaii owners ask
Is workers comp legally required for my Hawaii business?
If you have any employees, yes. Hawaii requires coverage once you have one or more employees under Chapter 386. There is no minimum headcount, no payroll minimum, and no part-time or temporary exception.
How many employees before I need workers comp in Hawaii?
One employee is enough. Hawaii attaches the requirement to your first employee, so there is no number you can stay under. A single part-time or temporary hire makes coverage mandatory.
Do part-time or temporary workers count in Hawaii?
Yes. Part-time, temporary, and seasonal workers are all employees for coverage. Hawaii does not exempt them, so you cannot avoid the requirement by keeping people part-time.
Does Hawaii exempt farm or construction workers?
No. Hawaii has no agriculture, construction, or general casual-labor exemption, so those workers count the same as any other employee and must be covered.
Do I have to cover myself as the owner?
Usually not by default. Sole proprietors, partners, and qualifying LLC members and large shareholders are left off in Hawaii and can opt in. Your employees are always covered.
What if my workers are independent contractors?
A label does not settle it. Hawaii presumes coverage and uses a control plus nature-of-the-work test, not the simpler ABC test. A misclassified worker who gets hurt can leave you exposed.
What happens if I do not carry it?
Hawaii can fine you at least 500 dollars, or 100 dollars per employee for every day you stay uninsured, whichever is greater. After 14 days a court can order you to stop operating.
Why Hawaii owners choose Morrow
- We shop the right market for you. Hawaii has no state-run fund, so private insurers compete for your business and we can shop your rate freely. If no insurer will take you, there is a guaranteed backstop: HEMIC, a member-owned insurer that has to cover businesses others turn down.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related Hawaii guides
Every Hawaii business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in Hawaii (start here)
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- What happens if I don't carry workers comp?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Hiring your first employee: what changes
- What workers comp does not cover
- Hawaii restaurant workers comp
This guide is general information, not legal advice. Hawaii rules and penalty amounts can change, so verify current requirements with the Hawaii Department of Labor and Industrial Relations, Disability Compensation Division or a licensed advisor before you rely on them. Last updated: July 2026.