If you skip required workers compensation in Hawaii, you face real money and a possible shutdown, not just a warning. Under Chapter 386, an uninsured employer can be fined at least 500 dollars, or 100 dollars per employee for every day the failure continues, whichever is greater, and after 14 days of default a court can order the business to stop operating anywhere in the state. On top of that, you stay directly on the hook to pay an injured worker's benefits yourself.
Who this is for: Hawaii owners weighing the risk of going without coverage, or who just found out they should have had it.
The short version
- The core penalty is at least 500 dollars, or 100 dollars per employee per day, whichever is greater.
- After 14 days of default a court can shut your business down statewide until you insure.
- An uninsured employer must pay an injured worker's medical and wage benefits directly.
- The state fund can pay the worker first and then recover the money from you.
- Charging employees for their own coverage carries its own fine of up to 5,000 dollars.
What the penalties add up to
Hawaii's fine is designed to grow the longer you go without coverage, and it scales with your headcount. The daily piece, 100 dollars per employee per day, can pass the flat 500 dollar floor quickly for even a small crew, and the greater of the two applies. The money goes to the state Special Compensation Fund. The state can also go to court to enjoin your business from operating once you have been in default for 14 days, which for most owners is the more serious threat than the fine.
| Trigger | Consequence | Notes |
|---|---|---|
| Failing to carry required coverage | At least 500 dollars, or 100 dollars per employee per day, whichever is greater | Paid to the state Special Compensation Fund |
| Staying in default for 14 days | Court order to stop operating statewide | Until coverage is in place |
| A worker is injured while you are uninsured | You pay their benefits directly | State fund may pay first, then bill you |
| Deducting coverage cost from employee pay | Fine up to 5,000 dollars | Employers cannot charge employees for coverage |
| Late payment of an owed benefit | An extra 20 percent added | Applies when liability is not disputed |
The bigger risk is the injured worker
The fine is not the worst part. If a worker is hurt while you are uninsured, you are personally responsible for their full medical care and wage benefits, which for a serious injury can dwarf any premium you saved. The state Special Compensation Fund can step in to pay the worker and then come after you to recover it. And because workers comp normally shields an employer from being sued over a work injury, going without it can strip that protection and expose you to a direct claim. Being uninsured turns a covered incident into an open-ended liability.
A Waianae example
Illustrative, not a quote. A Waianae roofing contractor runs three uninsured crew members to save on premium. A worker falls and needs surgery, and because there is no policy the contractor is personally liable for the medical bills and lost wages. The state fund advances the benefits to the injured worker and then bills the contractor, who is also fined for the days of noncompliance and told to insure before continuing work. The premium he skipped is a fraction of what the claim and penalties cost. See our workers comp for roofers page.
Real questions Hawaii owners ask
What is the penalty for no workers comp in Hawaii?
An uninsured employer can be fined at least 500 dollars, or 100 dollars per employee for every day the failure continues, whichever is greater, paid to the state Special Compensation Fund.
Can Hawaii shut my business down for being uninsured?
Yes. After you have been in default for 14 days, a court can order your business to stop operating anywhere in the state until you put coverage in place.
Who pays if a worker is hurt and I have no coverage?
You do, directly. An uninsured employer is responsible for the injured worker's medical care and lost wages. The state fund may pay the worker first and then recover the cost from you.
Can I deduct the cost of coverage from my employees' pay?
No. Hawaii bars charging employees for their own workers comp, and doing it carries a fine of up to 5,000 dollars on top of anything else.
Does going uninsured let a worker sue me?
It can. Workers comp normally shields an employer from being sued over a work injury. Without coverage you can lose that protection and face a direct claim.
Is there a penalty for paying a benefit late?
Yes. When your liability is not disputed and you pay an owed benefit late, Hawaii adds an extra 20 percent to the amount owed.
Will paying the fine end the problem?
No. You still have to get coverage, you remain liable for any injured worker, and the shutdown risk stays until you insure. The fine is only one part of the exposure.
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)
- Workers comp: the owner's overview
- 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?
- 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)
- What workers comp does not cover
- Workers comp vs employers liability
- Hawaii roofer 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.