Workers’ compensation insurance, which pays out if an employee is hurt on the job, is required under Hawaii law. Businesses that fail to comply risk fines of up to $100 per employee and legal action from employees denied benefits.
Injured workers can receive temporary disability benefits that cover part of their lost wages. In contrast, surviving dependents may receive death benefits, typically two-thirds of the deceased’s average weekly wage.
What is Workers’ Compensation?
Hawaii workers’ compensation insurance provides medical care and financial benefits to employees with work-related injuries or illnesses. Employers must provide this coverage unless they legally opt out of doing so, are on the list of exempt employment types or meet certain payroll and other criteria for group self-insurance. Almost all employers must offer workers compensation in Hawaii, except federal employees, some domestic workers, stockholders at 25 percent or higher and real estate agents paid by commission. The law also excludes volunteers for non-profit and charitable organizations, students working for their tuition or room and board, and licensed religious workers. Injuries and illnesses covered by workers’ comp include physical injuries such as musculoskeletal disorders, mental stress and exposure to harmful substances. Surviving family members may receive death benefits equal to two-thirds of the injured worker’s average weekly wage, up to a state-set maximum. This benefit is tax-free. Companies that fail to abide by the state’s rules for providing workers’ comp are liable for fines and penalties. An attorney can help you understand the laws and make sure you comply.
Who Needs Workers’ Compensation Insurance?
Every business in Hawaii that has employees must have workers’ compensation insurance. Employers can either self-insure or purchase a policy from the state’s HEMIC. Employers pay a premium on a payroll basis, and the cost can vary depending on the industry. The law sets a schedule of weeks for different types of impairments, such as complete loss of a hand. Those who lose the use of their arms, legs, eyes or ears also receive payments based on the percentage of impairment. In addition to covering medical bills and disability benefits, a Hawaii workers’ comp policy can protect businesses from lawsuits. Most procedures have an exclusive remedy clause prohibiting injured employees from suing their employer. This helps keep workers’ compensation costs low for Hawaii businesses. Small businesses can opt for a pay-as-you-go workers’ comp policy to save even more money. This type of policy requires a low, upfront premium and pays on actual payroll instead of estimated payroll, which can help keep costs down. Also, companies can reduce their workers’ comp costs by implementing a documented safety program.
What’s Covered by Workers’ Compensation Insurance?
Hawaii workers’ compensation laws cover various costs, including medical bills and lost wages. In addition, it provides death benefits for surviving family members and a lump sum for funeral costs. Injured employees may also receive vocational training to learn new skills and retrain for another occupation. The law also covers the cost of psychological counseling and other treatment for work-related injuries. Employers must buy Hawaii workers’ comp insurance for their employees, with exceptions for federal employees and some domestic workers. The state’s Department of Labor and Industrial Relations oversees the program. Employers can get quotes and buy workers’ comp coverage through private insurers. Employers can save money on workers’ comp premiums by correctly classifying employees and using experience modification to help calculate rates. For example, workers with low-risk jobs like office clerks cost less to insure because they have a lower risk of injury. They can also choose to voluntarily cover excluded employees, which reduces overall costs and helps avoid misclassification fines.
How Does Workers’ Compensation Insurance Work?
Workers’ compensation is available in Hawaii to employees who are injured on the job. Injured workers can receive medical treatment and financial benefits to cover lost wages and other expenses related to the injury or illness. A workers’ comp lawyer can help you understand the details of your state’s specific laws. However, some of the most common benefits include Temporary total disability (TTD): This will pay a portion of your normal salary if you can’t work due to an injury or illness. This is paid for up to two years and can be extended. Death benefits: If an employee dies during their employment, surviving spouses can receive up to 66 and two-thirds percent of their average weekly wage.
All employers in Hawaii must purchase workers’ compensation insurance for their employees unless they meet the state’s exemption criteria. Businesses can get coverage from private insurers or self-insure by meeting minimum payroll and other requirements. Employers that do not provide workers’ comp coverage can face fines and other penalties.
How Does Workers’ Compensation Insurance Work in Hawaii?
Hawaii workers’ compensation laws provide medical coverage and a source of income for employees who are injured or ill on the job. Employers must carry coverage or face stiff fines. A typical policy includes both workers’ compensation and employers’ liability insurance. The former covers costs for an employee’s injury or illness and helps pay the business’ legal liability if the employee sues over a work-related injury or disease. Hawaii also provides death benefits and vocational rehabilitation to help injured workers regain skills needed for another job. These benefits are typically offered as lump-sum payments. Some businesses are exempt from the requirement to carry workers’ compensation coverage in Hawaii. They include sole proprietors, partners, and LLC members who would only stand to receive up to 50 percent of the company’s value if it were liquidated or sold. However, most small businesses purchase a workers’ compensation policy based on payroll and adjusted yearly. Some policies include a pay-as-you-go option that allows the policyholder to make payments based on actual payroll instead of estimated payroll, which can be useful for small businesses with fluctuating numbers of employees.