Hawaii is the only state in the US that requires employers to provide health care coverage to employees - the Prepaid Health Care Act has been law since 1974, more than 35 years before the Affordable Care Act. Any employee working 20 or more hours per week for 4 consecutive weeks must be enrolled in a qualifying health plan. Hawaii also has a mandatory TDI program requiring both employer and employee contributions, and a minimum wage of $16.00/hr today, rising to $18.00 in 2028. Honolulu and the growing Oahu tech community are the primary employer markets. WorkGenius becomes your legal employer and manages every Hawaii obligation from day one.
Facts reviewed against primary sources in September 2026
| Requirement | Hawaii | Detail |
|---|---|---|
| Minimum wage | $16.00/hr | Effective 2024; rising to $16.00 in 2026 and $18.00 in 2028 |
| State income tax | Up to 11% | Hawaii has one of the highest top marginal income tax rates in the US - 11% on high earners, with graduated brackets starting at 1.4% |
| Prepaid Health Care Act | Mandatory (20+ hrs/week) | Employers must provide health coverage to employees working 20+ hours per week for 4 consecutive weeks - Hawaii is the only state with this requirement |
| TDI contributions | Both employer and employee | Hawaii's Temporary Disability Insurance requires contributions from both employer and employee |
| Final paycheck | At discharge | HRS 388-3 has three branches: on discharge, wages in full at the time of discharge or by the next working day if conditions prevent it; on a quit with at least one pay period of notice, immediately; otherwise the next regular payday |
| Employment Practices Act | 1+ employee | Hawaii's anti-discrimination statute covers all employers with at least one employee |
Hawaii's Prepaid Health Care Act (PHCA), enacted in 1974, requires all employers to provide health care coverage to employees who work 20 or more hours per week for four or more consecutive weeks. This makes Hawaii the only state in the US with a mandatory employer health insurance law. The employer must pay at least 50% of the monthly premium; the employee's share is capped at the lesser of half the premium or 1.5% of their monthly wages under HRS 393-13. The PHCA survived ERISA, which generally preempts state insurance mandates, because a 1983 amendment to ERISA section 514(b)(5) expressly exempts the Act as it stood on September 2, 1974. That is an ERISA carve-out specifically, not an Affordable Care Act waiver - the two are often conflated. It was explicitly grandfathered. It also survived the Affordable Care Act - Hawaii received a waiver. Employers that fail to enroll qualifying employees face significant penalties. For out-of-state companies hiring their first Hawaii employee, PHCA enrollment is required before the employee crosses the 20-hour weekly / 4-consecutive-week threshold.
Get Hawaii-Compliant TodayHawaii's mandatory health insurance law (PHCA), TDI contributions, minimum wage rising to $18/hr by 2028, and broad anti-discrimination statute create the most complex employer compliance environment in the Pacific.
WorkGenius enrolls every Hawaii employee who crosses the 20-hour/week threshold in PHCA-compliant health coverage, manages at least 50% employer premium contributions, and caps employee deductions at 1.5% of weekly wages - full PHCA compliance from day one.
Hawaii's TDI program requires both employer and employee contributions. WorkGenius calculates and remits TDI contributions for every Hawaii employee on each pay cycle, administering leave claims through the TDI system.
WorkGenius applies Hawaii's phased minimum wage schedule automatically: $16.00 from January 1, 2026 and $18.00 in 2028 under Act 114 (2022). Each update takes effect on January 1 of the applicable year.
Hawaii's Employment Practices Act covers all employers with at least one employee and prohibits discrimination based on race, sex, sexual orientation, age, religion, color, ancestry, disability, marital status, and arrest and court record. WorkGenius ensures full HEPA compliance from the first hire.
Hawaii requires wages to be paid at least semi-monthly. WorkGenius manages pay frequency, delivers final pay on the next regular payday, and maintains required wage statements.
ACA-compliant health coverage coordinated with PHCA requirements, 401(k), and disability insurance administered. Offboarding includes final pay on the next regular payday, COBRA administration, and TDI leave coordination.
Hawaii is the only state in the US that requires employers to provide health insurance to employees working 20 or more hours per week - the Prepaid Health Care Act has been in place since 1974. Hawaii also requires mandatory TDI contributions from both employers and employees. WorkGenius handles PHCA enrollment, TDI contributions, and payroll automatically on every cycle.
Hawaii's PHCA is the defining compliance requirement - but TDI contributions, a high minimum wage trajectory, and a 1-employee anti-discrimination threshold make it one of the most regulation-dense employer environments in the country.
Two Hawaii obligations sit alongside the PHCA and TDI. Workers compensation is required from the first employee under HRS 386, with no headcount threshold. And the Hawaii Family Leave Law gives 4 weeks of unpaid family leave at employers with 100 or more employees - a different threshold from federal FMLA, which starts at 50, so a mid-sized employer can be covered by one and not the other. WorkGenius secures coverage before the first hire and tracks both thresholds.
Hawaii is the only state requiring mandatory employer-provided health insurance. Applies to employees working 20+ hours per week for 4+ consecutive weeks. Employer pays at least 50% of the premium; employee share capped at 1.5% of weekly wages. Enacted 1974, grandfathered from ERISA and ACA.
Hawaii's TDI program requires contributions from both employer and employee. Provides partial wage replacement when an employee cannot work due to a non-work-related illness, injury, or pregnancy. Coverage must come from an authorised private insurer or a DLIR-approved self-insured plan - Hawaii operates no state TDI fund an employer can buy into.
Hawaii's minimum wage is on a phased increase schedule under Act 114 (2022): $16.00/hr from January 1, 2026 and $18.00 in 2028. At $18/hr, Hawaii will have the second-highest statutory minimum wage in the US. WorkGenius applies each year's rate automatically.
Covers all employers with 1 or more employees. Prohibits discrimination based on race, sex, sexual orientation, gender identity or expression, age, religion, color, ancestry, disability, marital status, and arrest and court record. The Hawaii Civil Rights Commission handles complaints.
From first conversation to fully compliant employment - typically within days.
Workers, roles, locations, and start dates. We tailor the setup to your needs.
Our AI runs every worker through Hawaii's classification and compliance rules. We prepare compliant contracts and payroll setup.
Onboarded with Hawaii-compliant contracts, benefits enrolled, payroll running from day one.
Payroll runs on Hawaii rules. Taxes filed. Compliance monitored. One weekly invoice.
Hawaii's Prepaid Health Care Act (PHCA), enacted in 1974, requires all employers to provide qualifying health care coverage to employees who work 20 or more hours per week for four or more consecutive weeks. The employer must pay at least 50% of the monthly premium; the employee's contribution is capped at 1.5% of their weekly wages. Hawaii is the only state in the US with this requirement. The PHCA was grandfathered from ERISA preemption because it predates that federal law, and it survived the Affordable Care Act under a special Hawaii waiver. WorkGenius handles all PHCA enrollment and premium administration for qualifying Hawaii employees.
The PHCA applies to any employee working 20 or more hours per week for four or more consecutive weeks - it is not limited to full-time employees. This is a key distinction from the ACA's 30-hour threshold. Part-time employees who consistently work 20+ hours per week must be enrolled. Employees working fewer than 20 hours per week, or working only temporarily, are not covered by the mandatory enrollment requirement, though employers may voluntarily cover them.
Hawaii's Temporary Disability Insurance (TDI) program requires both employer and employee contributions. It provides partial wage replacement - approximately 58% of average weekly wages - when an employee cannot work due to a non-work-related illness, injury, or pregnancy for up to 26 weeks. Unlike Rhode Island's TDI, Hawaii's program requires employer contributions in addition to employee contributions. There is no state TDI fund to buy into: coverage must come from an authorised private insurer or a DLIR-approved self-insured plan. WorkGenius manages TDI enrollment and contribution remittance for every Hawaii employee.
Hawaii's minimum wage is on a legislated phased increase under Act 114 (2022): $16.00/hr from January 1, 2026 and $18.00/hr in 2028. At $18/hr, Hawaii will have one of the highest statutory minimum wages in the US. WorkGenius applies each increase automatically on the effective date.
Hawaii's Employment Practices Act covers all employers with at least one employee. It prohibits discrimination in employment based on race, sex, sexual orientation, gender identity or expression, age, religion, color, ancestry, disability, marital status, and arrest and court record. The "arrest and court record" protection is particularly notable - Hawaii restricts employers from considering arrest records in most employment decisions. The Hawaii Civil Rights Commission handles complaints.
Hawaii courts have historically been skeptical of non-compete agreements and require them to satisfy a strict reasonableness standard - courts examine whether the restriction is necessary to protect a legitimate business interest, is reasonable in scope and duration, and does not impose undue hardship on the employee. Hawaii does have one categorical statutory ban: Act 158 (2015), codified at HRS 480-4(d), voids any non-compete or non-solicit clause in an employment contract for an employee of a technology business - one deriving the majority of its gross income from software or information technology development. Outside that sector courts apply a more searching inquiry than many other states. WorkGenius screens every Hawaii hire against the technology-business exclusion and drafts narrowly where a covenant is available.
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