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How to Hire Employees In Hawaii

Hiring in Hawaii for the first time can be challenging, especially with the state's complex employment laws. Whether you're hiring independent contractors, setting up a legal entity, partnering with a PEO, or using an Employer of Record (EOR), it's essential to understand the local employment landscape. Playroll's comprehensive guide is here to help, whether you're onboarding local talent or relocating team members.

Here are four primary ways companies can hire employees in Hawaii:

Establishing a local entity: Creating a legal entity in Hawaii allows for direct hiring, but it can be costly and time-consuming. However, it gives you full control over employment and reduces risk exposure.
Partnering with an Employer of Record (EOR): An EOR, like Playroll, takes on the legal responsibilities of employment, acting as the employer on your behalf. This option streamlines hiring, payroll, and compliance with Hawaii’s labor laws, helping you hire in Hawaii without navigating the complex legal landscape yourself.
Working with a Professional Employer Organization (PEO): A PEO, such as Playroll, co-employs your team, managing essential HR functions like payroll, benefits, and compliance. Partnering with a PEO ensures you meet Hawaii’s labor regulations while offering competitive employee benefits.
Hiring independent contractors: Hiring independent contractors can be more cost-effective, but Hawaii has strict contractor classification rules. Proper classification is essential to avoid penalties for misclassification when hiring in Hawaii.

Complying with Hawaii specific employment regulations and federal laws is critical to avoiding legal risks and costly fines. Our guide focuses on hiring in Hawaii, employment compliance, and how Playroll’s services can support your business as you navigate the complexities of hiring in the state.

Good To Know

Approximately 1.4 million residents, with a diverse cultural heritage.

Major industries include tourism, defense, agriculture, and renewable energy.

Hawaii mandates employer-provided health insurance for employees working 20+ hours weekly.

Notably higher than the U.S. average, impacting wage considerations.

Key Things to Know About Hiring in Hawaii

Labor Laws in Hawaii

Working Hours in Hawaii

Hawaii has specific employment and labor laws governing working hours to protect employees' rights and ensure fair compensation. Employers, whether local or using an Employer of Record (EOR), need to understand these regulations to maintain compliance.

1. Standard Workweek and Overtime

Standard Workweek: 40 hours per week.
Overtime Pay: 1.5 times the regular pay rate for hours worked over 40 in a workweek.

2. State-Specific Working Hour Regulations

Public Works Projects: Overtime applies after 8 hours in a day for state or county public works construction projects

3. Meal and Rest Breaks

Meal Breaks: No state-mandated requirement; employer discretion.
Rest Breaks: Not required by state law; employer discretion.

Minimum Wage in Hawaii

Hawaii's minimum wage is $14.00 per hour.

Future Increases

January 1, 2026: $16.00 per hour
January 1, 2028: $18.00 per hour

Hawaii law requires employers to pay overtime at 1.5 times the regular pay rate for hours worked over 40 in a workweek. This aligns with federal standards.

Exemptions

Certain Employees: Executive, administrative, and professional employees may be exempt.
Public Works Projects: Overtime applies after 8 hours in a day for state or county public works construction projects.

Onboarding New Hires in Hawaii

We can help you get your new employee started in Hawaii fast, with a minimum onboarding time from just 1-2 working days. Note that the timeline is dependent upon registration with the local authorities, and begins after the employee has submitted all the required information on the Playroll platform.

For non-citizens of the US, a work eligibility assessment may be required, and can add three extra days to the onboarding time. If a follow-up is needed, there may be additional delays.

Please note that payroll cut-off dates can impact the actual first day of employment. Playroll’s payroll cut-off date is the 10th of the month, unless otherwise specified.

Payroll Taxes For Hawaii

Payroll taxes in Hawaii are deductions employers must take from employees’ wages and remit to the state. These taxes fund various state programs and services, including unemployment benefits and disability insurance.

Examples of Payroll Taxes

State Income Tax: Progressive rates ranging from 1.4% to 11%, depending on income level.
State Unemployment Insurance (SUI): Employer-funded tax supporting unemployment benefits, with rates between 0.2% and 5.8%.
Temporary Disability Insurance (TDI): Provides partial wage replacement for eligible employees unable to work due to disability.

Hawaii law requires employers to pay employees at least twice a month. Paydays must be regular and designated in advance. Specific industries may have additional requirements; employers should consult state regulations to ensure compliance.

Looking to grow your team in Hawaii?

Stay Compliant: Navigate Hawaii’s complex labor laws with ease.

Affordable Solution: Reduce costs with a budget-friendly EOR option.

Top-Tier Benefits: Access competitive Hawaii and federal employee benefits for a stronger team.

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Hawaii Employment Taxes

Employment taxes and statutory fees affect both your payroll and your employees’ paychecks in Hawaii. Understanding the tax obligations for both employers and employees is crucial when operating in Hawaii's business landscape.

Employer Tax Contributions

Employers in Hawaii are responsible for several tax contributions, including State Unemployment Insurance (SUI) and Temporary Disability Insurance (TDI). These contributions support state programs benefiting employees.

Employer payroll contributions are generally estimated at an additional 0.2% to 5.8% on top of the employee salary in Hawaii.

Employment Tax Type	Tax Rate
State Unemployment Insurance (SUI)	0.2% - 5.8%
Temporary Disability Insurance (TDI)	Varies

Employee Tax Contributions

Employee tax contributions are generally estimated at 1.4% to 11% of employee salary in Hawaii.

Employee Payroll Tax Contribution	Tax Rate
State Income Tax	1.4% - 11%
Temporary Disability Insurance (TDI)	Up to 0.5% (max $6.59/week)

The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Hawaii tailored to your needs.

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Benefit Requirements for Employers in Hawaii

Hawaii has specific regulations regarding employee benefits, notably the Hawaii Prepaid Health Care Act, which requires employers to provide health insurance to employees working 20 or more hours per week. Additionally, employers must adhere to the state's Temporary Disability Insurance (TDI) requirements.

Employee Benefits for Hawaii

Competitive benefits are essential for attracting and retaining top talent in Hawaii. Offering the right package helps employees feel valued and motivated. Our benefits experts understand the local labor market's trends, requirements, and expectations, ensuring your employees feel valued and supported. Common benefits in our Hawaii packages include:

Pension or 401(K)
Vision Insurance
Life Insurance
Medical Insurance
Dental Insurance
Health Savings Plan (HSA)
Flexible Spending Account (FSA)

Paid and Unpaid Leave Policies in Hawaii

Sick Leave

Hawaii does not have a statewide mandatory paid sick leave law, but employers may offer it voluntarily or as stipulated by employment contracts.

Family Leave

Under the Hawaii Family Leave Law (HFLL), eligible employees are entitled to up to four weeks of unpaid, job-protected leave per calendar year for the birth or adoption of a child or to care for a family member with a serious health condition.

Vacation Leave

Hawaii law does not require employers to provide paid or unpaid vacation leave. However, if an employer has a vacation policy, it must be administered consistently with the established terms.

Jury Duty Leave

Employers must provide leave for employees summoned for jury duty. This leave is typically unpaid, but employees cannot be penalized for fulfilling their civic duties.

Voting Leave

Hawaii law requires employers to provide up to two hours of paid leave to employees to vote, provided that the employees are not able to vote during non-working hours.

It’s Easy To Manage Benefits For Employees In Hawaii With Playroll

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Employment Termination Protocols in Hawaii

Hiring Employees in Hawaii with an employer of record

Discuss how an EOR handles onboarding, including setting up compliant employment contracts, registering for taxes, and managing benefits like Hawaii's superannuation system (if applicable).

The employer of record is responsible for:

Employment Compliance: Ensure all employment contracts comply with Hawaii's labor laws and regulations, including proper classification of employees.
Payroll Management: Calculate, process, and distribute employee salaries in accordance with Hawaii's payroll laws, including deductions for taxes and social security contributions.
Tax Filing and Contributions: Handle the registration, filing, and payment of employer taxes and social security contributions to the relevant authorities.
Employment Contracts: Draft and maintain compliant employment agreements, detailing salary, benefits, working hours, and termination terms in line with Hawaii's legal requirements.
Benefits Administration: Provide mandatory employee benefits as required by Hawaii's labor laws, such as health insurance, pension contributions, and statutory leave.

Employer of Record for Hawaii

Guide to Hiring Employees in Hawaii