labor lawAdivision of labor law center

The Hawaii Department of Labor & Industrial Relations recently conducted the first in a series of workshops on Hawaii unemployment insurance for new employers. The workshops are designed for owners and managers of newly created businesses, especially those who are operating a business for the first time. They cover a variety of important topics, including costs, proper filing and hearings.

The workshop was held at the Keelikolani Building, in the same building as the State Department of Labor and Tax Office. The sessions were lead by the staff of the Unemployment Insurance Division of the Dept. of Labor & Industrial Relations. A number of the most common filing errors were discussed, and there was ample time for questions and networking.

Many small business owners note that it is the administrative maters, not the business itself, that causes the most headaches. Unemployment insurance, workers’ comp, payroll taxes, worker safety training, OSHA and labor law poster requirements, etc. are often the biggest challenges that new business owners face.

A number of vital topics were covered. Many new employers had questions on general information about unemployment insurance, which were addressed. A speaker discussed how to complete the quarterly Unemployment Insurance Report (UC-B6), a concern to many experienced business owners, not just new ones!

The very informative, capable staff of the Hawaii Unemployment Insurance division provided information on claims and benefits, as well as complete instruction on internet filing. Other topics covered in the half-day seminar included filing deadlines, avoiding penalties and interest, and my personal favorite, Tax Savings.

If you missed this workshop, and you’d like more information on the Hawaii unemployment insurance laws, three more workshops are scheduled. They are slated for April 12, July 10 and October 9, in the same location. Contact the Hawaii Dept. of Labor & Industrial Relations for more information.

After talking about unemployment insurance and how employers have to pay a certain tax for it for every one of their employees, I know what the logical question is next. After all, anybody reading this blog must be a pretty astute employer, and you must all be thinking: Sure, I have to pay this unemployment insurance tax, and I will, but there’s got to be a way to make sure I don’t pay too much unemployment insurance tax—what is it?

Well, in the state of Hawaii at least, you can minimize your employer’s unemployment insurance tax because of the fact that part of your contribution to the system is determined by the ratio of your reserve account balance—how much taxes in your account are still leftover unspent from the last period—to your annual average taxable payroll for the last three years—how much taxes you usually have been paying.

In other words, if you’re reserve balance goes down, and or your average taxable payroll goes up, this ratio will go down, and you will have to pay more taxes for unemployment insurance going forward. That makes sense, because the state of Hawaii would like that you have higher reserves. That means that your former employees are claiming less unemployment benefits. And if your payroll goes up, that means you have more employees, or more higher paid employees. And that means that you have a greater risk of paying more unemployment benefits in the future.

Make sense? Either way, here are some simple practical tips that the Hawaii state authorities offer up. For instance, the state recommends that you file all of your quarterly reports (which we talked about earlier) on time and accurately. And the state also recommends that you keep accurate records, for old and current employees (something else we’ve talked a little about here).

I discovered that the Hawaii Employment Security Law protects workers who become unemployed through no fault of their own. Benefits may be paid for a maximum of 26 weeks. An employee who has worked during at least two quarters in a year, and worked at least 2 days a week, is eligible to receive benefits.

Other qualifications that a worker must meet are:

• Filing a tele-claim with Hawaii’s unemployment office
• Registering for work and reporting to the employment office as required
• Being able and available for work, unless the worker is ill or disabled 
• Applying for work and not refusing suitable employment without good cause

If an employee voluntarily quits or resigns, I know that they are not eligible for benefits. Also, an employee who has been fired for deliberate misconduct connected with work is also not eligible.

If however an employee quit for good cause, they may receive benefits.  Good cause is defined as:

• A change in working conditions that affects the worker’s health, safety, or morals
• A change in terms of employment, including pay, position, duties, days or hours of work
• Equal opportunity discrimination
• A change in an employee’s marital or domestic status;
• Refusal to rehire an employee after another job has been accepted and then withdrawn by a new employer
• Retirement due to a collective bargaining agreement

I read that an addition to the law provides for benefits to employees when a job loss is caused by a natural or manmade disaster. The additional benefits are dependent on the governor’s declaration of a state of emergency. There is no waiting period, but the maximum benefits payable are for 13 weeks.

Employers must pay taxes for each of their workers into an account from which benefits are paid out to covered workers who become involuntarily unemployed. Employers must also post a notice of the Hawaii Unemployment Insurance Laws in a public area of their workplace. This notice can be found on the Hawaii Complete Labor Law poster.