Workers’ compensation (WC) or workers’ comp insurance as it is often called, is a state-mandated program that requires most employers in Hawaii to make payments to an employee who is injured or disabled at work. Workers’ comp insurance premiums are paid by employers on behalf of their employees. Each state has its own set of workers’ compensation laws, though most states have similar rules. In this article we cover worker’s compensation FAQs for Hawaii employers.
Workers’ Compensation FAQs
Which businesses need workers’ compensation insurance in Hawaii?
Companies who employ one or more employees, full-time or part-time, permanent or temporary, are required to provide workers’ compensation coverage for their employees.
The following types of employees are generally entitled to worker’s compensation:
- Permanent or temporary
- Apprentices and interns
- Minors and adults
Which businesses are excluded from having to purchase workers’ compensation insurance in Hawaii?
Certain business owners, officers, and executives are not required to carry coverage but may elect to be covered:
- Sole proprietors and independent contractors
- Partners, corporate officers and LLC Members in a business
- Any corporate officer who owns at least 50% of the business
Sole-proprietors and partners who include themselves on workers’ compensation coverage must use a payroll amount of $58,000 for rating their overall workers’ compensation cost.
Officers and LLC members who are included in coverage must utilize a minimum payroll of $900 per week ($46,800 annual) and a maximum of $3,600 per week ($187,200 annual).
Which employees in Hawaii are exempt from workers’ compensation?
In Hawaii, there are some categories of workers who are exempt from worker’s compensation:
- Federal employees (the federal government covers federal employees with its own workers’ compensation insurance)
- Independent contractors
- Real estate salespeople and brokers who are compensated solely by commission
- Volunteer or unpaid workers for religious, charitable, educational, or nonprofit organizations
- Students working for a school or college club in exchange for room, board, or tuition
- Authorized ministers, priests, or rabbis
- Domestic workers making less than $225 each calendar quarter
- People providing domestic services to public welfare recipients
- Certain 25% stockholders
- All 50% stockholders
Can employers choose to cover excluded employees?
Yes, employers may decide to cover excluded employees because of the potential cost of medical bills from a work injury.
How much does workers’ compensation insurance cost in Hawaii?
The estimated employer rates for workers’ compensation in Hawaii are $1.70 per $100 in covered payroll. The exact amount each employer will pay is affected by several factors, including:
- Number of employees
- Industry and risk factors
- Coverage limits
- Claims history
What does worker’s compensation cover?
Hawaii has a workers’ compensation system that provides no-fault benefits to workers who are hurt in the course of their employment. Accidents and illnesses can arise from work and when they do, the employees are covered under the WC law. The purpose of WC Coverage is to provide wage loss compensation and medical care to those employees who suffer a work-related injury. In essence, the WC law in Hawaii requires the employer to provide certain benefits regardless of whether the employer is at fault.
Worker’s compensation covers most occupational diseases associated with a particular occupation or industry, including injuries caused by or due to compressed air; contact with asbestos or beryllium, or exposure to radioactive substances. Some examples of covered diseases are cancer, musculoskeletal disorders, and carpal tunnel syndrome.
Worker’s compensation payments typically cover:
- Medical care resulting from the injury or illness (all related medical benefits would include diagnostics, prescriptions written by the authorized treating physician)
- Rehabilitation expenses (including physical therapy)
- Replacement income (Temporary Total Disability or Temporary Partial Disability – this is not full replacement)
- Retraining expenses (Vocational Rehabilitation)
- Compensation for any permanent injuries (impairment ratings or permanent partial disability)
- Benefits to survivors of workers who are killed on the job (death benefits are payable to dependents and survivors of the deceased)
Can an employee sue me for their workplace injury?
No, the WC law prohibits an employee from filing civil action against the employer for work-related injuries or illnesses.
What injuries are NOT covered by workers’ compensation?
Here is a list of injuries not covered by worker’s compensation:
- Common, one-time illnesses such as a stomach bug or headaches
- Injuries that can be treated with basic first aid, such as cuts or minor burns
- A health condition that existed before the employee was hired or started working a particular job (if a pre-existing condition was aggravated by a compensable injury, then it would be covered if deemed the same by the authorized doctor)
- An incident that happened because of an act of God such as a tsunami
- An injury caused by employee horseplay or a fight
- Contracting ordinary disease of life
- Injuries suffered while an employee was not working or “on the job”
- Employees who suffer a heart attack
- Injuries caused by repeated mental trauma
- Injuries suffered while an employee’s conduct violates company policy or involves a serious crime
- Injuries suffered while an employee is intoxicated or using illegal drugs
- Injuries caused by a willful attempt to injure oneself or another
Note: Unlike a personal injury settlement, workers’ compensation benefits do not cover pain and suffering.
Are mental injuries covered by worker’s compensation under Hawaii state laws?
Mental injuries are only covered by worker’s comp in Hawaii under very specific circumstances. An employee cannot file a worker’s compensation claim for mental stress caused solely from disciplinary action taken in good faith by their employer.
Can employees dispute worker’s comp claim results?
Employees can request a hearing to dispute a worker’s compensation claim that was denied in whole or in part. Employers will typically hire a lawyer to defend their own interests in this situation. Employees will receive a decision within 60 days of the hearing and then have 20 days from the date of the decision to file a notice of appeal.
Does an injury have to happen on the employer’s premises to qualify for a worker’s compensation claim?
No, most injuries that can be classified as work-related do not necessarily have to happen on the employer’s premises. An injury that happens during business travel, at a trade show or conference, or doing work for the employer at a different place of business would typically still count as a work-related injury.
Makai HR offers Comprehensive Workers’ Compensation Solutions
Our clients benefit from comprehensive worker’s compensation solutions, including:
- Workplace Safety Training & Guidance
- Safety Manual / Policy Development
- Claims Verification
- Claims Management Support
- Safety Incentives
- Basic WC Trainings including: measuring safety training, office economics, indoor slips, fall protection
- OHSA Inspection & record-keeping support
From securing coverage at competitive rates to claims management, Makai HR offers a hassle-free, comprehensive workers’ compensation solution. If you’re ready to get started, book an intro call now.
We are proud to be named to Hawaii Business Magazine’s 2023 Best Places to Work and Pacific Business News’ 2023 Hawaii’s Best Workplaces list. If you’re looking for comprehensive HR solutions for your business, we’ve got you covered through HR outsourcing.
When you partner with Makai HR you can get on with the business you are trying to grow while we take care of your employee needs from payroll to taxes, health insurance/benefits and worker’s compensation. You also gain peace of mind that you are compliant with all of Hawaii’s employer laws (if you’ve ever looked you know that the list is very long and changes happen). When choosing a PEO to partner with, there are many things to consider including cost, services, and technology solutions.
With the cost of doing business in Hawaii at record highs, we know how important it is to keep labor costs in line with revenue. Our plans are priced competitively and include value-added services like time-in/time-out systems. Our customized PEO solutions are tailored to the size of your business and specific needs. We offer a 100% paperless solution which means that your employees can manage their needs through a computer, tablet, or phone. We can truly improve your employees’ work benefits while freeing you up to operate your business.
What are you waiting for? Companies that partner with a PEO benefit from 7-9% faster growth, 10-14% lower employee turnover; and they are 50% less likely to go out of business. Contact us today to get started!