If you employ anyone in Hawaii, you must carry Temporary Disability Insurance that partially replaces wages when an employee cannot work because of a non-job-related illness, injury, or pregnancy. Employer obligations under Hawaii’s Temporary Disability Insurance law start on the first day a worker performs services for you and run through every pay period after that, covering how you insure the risk, how much you may deduct from employee paychecks, and what you have to do when a claim comes in.1State of Hawaii Department of Labor and Industrial Relations. About Temporary Disability Insurance
Who the Mandate Covers
Hawaii Revised Statutes Chapter 392 applies to any individual or organization employing at least one person in the state. The statute’s definition of “employer” sweeps in corporations, partnerships, associations, trusts, nonprofits, insurance companies, the state itself, and its political subdivisions.2Justia. Hawaii Revised Statutes 392-3 – Definitions Generally A two-person retail shop and a thousand-room resort face the same requirement. The obligation attaches from the first day someone performs services for you under a contract of hire, written or verbal.
Failing to secure coverage exposes you to penalties, including fines and injunctive action by the state.3Justia. Hawaii Revised Statutes 392-41 – Provision for Payment of Benefits
Workers You Don’t Have to Cover
Section 392-5 of the Hawaii Revised Statutes carves out several categories of service that fall outside the TDI mandate:4Justia. Hawaii Revised Statutes 392-5 – Excluded Services
- Domestic workers in a private home who earn less than $225 in a calendar quarter from that employer.
- Federal government employees, who are covered under separate federal law.
- Family employment: service performed for a spouse, parent (if the worker is under 21), or child of the employer.
- Insurance agents and real estate salespersons paid solely on commission.
- Individuals under 18 who deliver or distribute newspapers.
- Student nurses and hospital interns who have completed a four-year medical school course.
If you’re uncertain whether a particular worker fits an excluded category, the Disability Compensation Division can issue a formal determination. Guessing wrong leaves you exposed, so when the facts are close, get the determination in writing.
When an Employee Becomes Eligible for Benefits
Your coverage obligation and your right to deduct contributions both hinge on when a worker becomes eligible. During the 52 weeks before a disability begins, the employee must have:1State of Hawaii Department of Labor and Industrial Relations. About Temporary Disability Insurance
- At least 14 weeks of employment in Hawaii;
- At least 20 hours of paid work in each of those 14 weeks; and
- At least $400 in total earnings.
The 14 weeks don’t have to be consecutive or with the same employer. Eligibility travels with the worker, not the job, so a new hire who already met the thresholds at a prior employer is eligible from the moment you put them on your payroll.
Three Ways to Satisfy the Requirement
You have three compliance paths. Each carries different cost and administrative tradeoffs.
Buy a Private Insurance Policy
Most employers purchase TDI coverage from a carrier licensed to write it in Hawaii. You pay premiums, the carrier processes claims, and you may share the premium with employees within the limits described below.3Justia. Hawaii Revised Statutes 392-41 – Provision for Payment of Benefits
Self-Insure
You can apply to the Disability Compensation Division to pay claims directly from company funds. Approval requires proof of financial solvency through annual audited financial statements, or through securities on deposit or a surety bond. The required bond or deposit amount is set under Hawaii Administrative Rules sections 12-11-69 and 12-11-70.1State of Hawaii Department of Labor and Industrial Relations. About Temporary Disability Insurance Self-insurance generally suits large employers that can absorb claim risk and want control over claims handling.
Use an Existing Collective Bargaining or Pre-1969 Plan
A collective bargaining agreement, or a disability plan that predates the 1969 law, can satisfy the mandate if the state director finds that its benefits are at least as favorable as the statutory requirements. Those plans may be extended or modified through bargaining, but changes still need the director’s approval.3Justia. Hawaii Revised Statutes 392-41 – Provision for Payment of Benefits
What You Can Deduct From Employee Wages
You may deduct up to half the premium cost from each eligible employee’s wages, but the deduction cannot exceed 0.5% of weekly wages. For 2026, the absolute cap on the weekly deduction is $7.50, no matter how high the employee’s earnings are.5State of Hawaii Department of Labor and Industrial Relations. 2026 Maximum Weekly Wage Base and Maximum Weekly Benefit Amount You cover whatever share of the premium the employee contribution doesn’t.
One detail trips up a lot of payrolls: you cannot deduct TDI contributions from a worker who has not yet met the 14-week, 20-hour, $400 thresholds. You still owe coverage for that worker once they qualify, but withholding anything from their check before then is not authorized.6Justia. Hawaii Revised Statutes 392-43 – Authority to Withhold Contributions
Your Role When an Employee Files a Claim
A disabled employee files Form TDI-45, which has three parts filled out by three different people. Your part is Part B, where you verify the employee’s wage history, dates of employment, and the last day worked before the disability. The weekly earnings you report drive the benefit calculation, so accuracy matters.
Form TDI-45 is not available online. Employees must get it from you or from the Disability Compensation Division directly, so keep copies on hand.7State of Hawaiʻi Department of Labor and Industrial Relations. Disability Compensation Division – Forms Employees have 90 days from the date disability begins to file; late filings within 26 weeks may be paid at a reduced amount, and claims filed after 26 weeks are lost entirely.8State of Hawaii Department of Labor and Industrial Relations. Frequently Asked Questions – TDI Returning Part B promptly keeps the employee’s timeline from slipping.
If you carry a private policy, the completed form goes to your TDI carrier. If you self-insure, it comes directly to you for a decision.
How TDI Fits With FMLA and Hawaii Family Leave
TDI pays only for the employee’s own disability. It cannot be used to care for a sick family member, which is a key line between TDI and the federal Family and Medical Leave Act or the Hawaii Family Leave Law.9State of Hawaii Department of Labor and Industrial Relations. Frequently Asked Questions on the Hawaii Family Leave Law
When an employee’s own condition qualifies for both TDI and FMLA, the leaves can run concurrently: TDI replaces wages while the FMLA job-protection clock runs. If you self-insure under a TDI plan that requires maintaining a sick-leave bank, you are not required to let the employee use that same sick leave for family leave purposes.9State of Hawaii Department of Labor and Industrial Relations. Frequently Asked Questions on the Hawaii Family Leave Law Spell that out in your leave policy so employees know what is and isn’t available to them before they need it.