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Hawaii tax and labor law guide

Household employment requirements for families hiring a caregiver in Hawaii

Families in the Aloha state have specific federal and Hawaii state tax and payroll rules to follow when a caregiver begins working in their home. We have all this information covered for you in this guide so check out the information below that HomePay is here to help with.

Checklist for Hawaii household employers

We know you’re busy so here’s a quick “to-do” list with links to extra details below.

Beginning of employment 

During employment 

Optional benefits for your employee

Ending employment

Beginning of employment 

Workers’ compensation

Household employers in Hawaii are required to get coverage for workers’ compensation insurance if their employee earns $225 or more in a calendar quarter. These policies pay for medical expenses and lost wages if an employee has a work-related injury or illness. Obtain an instant quote and purchase a policy online, or contact our partner, Clarke White, at 804-267-1210 or wcnanny@allrisks.com.

Wage notice 

Household employers in Hawaii are required to provide their employee with a written wage notice at the time of hire. The wage notice must include:

  • The employee’s hourly rate of pay.
  • When paydays will occur (weekly, bi-weekly, etc.).
  • Employer’s address.
  • Vacation and sick leave policies.

Employment posters 

Families in Hawaii are required to notify their employee of their rights by sharing these posters.

During employment 

Minimum wage rates

The current minimum wage in Hawaii is $10.10/hour.

Hawaii overtime requirements

  • Live-out employees must be paid 1.5x their hourly rate for all hours worked over 40 in a workweek.
  • Live-in employees are required to be paid overtime. 
  • Overtime is not required to be paid when work is performed on a holiday. 

State income tax withholding

Employers in Hawaii are required to withhold state income taxes unless their employee is a certified disabled person or non-resident military spouse. Employers are liable for these taxes if they refuse to withhold them from their employee.

Disability insurance 

The Hawaii Temporary Disability Insurance Program (SDI) provides disability insurance benefits to employees who cannot work because of sickness or injury not caused by their job. The SDI program is funded by mandatory payroll deductions from employee wages.

Optional benefits for your employee 

Health insurance

Families with only 1 employee can make contributions toward their employee’s health insurance premiums and treat the amount as non-taxable compensation. In this scenario, neither the employee nor the employer are required to pay any taxes on that portion of the compensation.

Families with 2 or more employees have 3 options:

  1. Set up an Individual Coverage Health Reimbursement Arrangement (ICHRA)
  2. Set up a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)
  3. Purchase a policy through SHOP (Small Business Health Options Program). 

Visit our health insurance page for more information about these options.  

Mileage reimbursements

The current federal mileage reimbursement rate is $0.56 per mile and only covers miles driven by your employee while on the job. Miles driven commuting are not eligible for reimbursement.

Ending employment 

Managing unused PTO 

Hawaii household employers do not need to pay their employees for unused sick and/or vacation time.

The information contained in this article is general in nature, may not be applicable to your specific circumstances, and is not intended to be a substitute for or relied upon as personalized tax or legal advice.

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