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Hawaii TDI, explained like a neighbor would
Health coverage gets all the attention, but Hawaii has a second employer requirement that surprises almost as many business owners: Temporary Disability Insurance, or TDI. It's the law that keeps a paycheck partially flowing when an employee can't work because of an illness or injury that didn't happen on the job. Here's what it means for your business, in plain language.
The heart of it.
Hawaii requires most employers to provide partial wage replacement when an eligible employee is unable to work due to a non-work-related illness or injury. The employee gets a portion of their usual wages, set by state rules, for a limited stretch of time while they recover. Like the Prepaid Health Care Act, this applies to small businesses too. There's no exemption for being small.
What most owners get surprised by.
It's not workers' comp.
Workers' comp covers injuries that happen on the job. TDI covers the ones that don't: the weekend surfing injury, the illness, the surgery. Two separate laws, two separate requirements, and most businesses need both handled.
Pregnancy counts.
Disability related to pregnancy and childbirth is generally covered under TDI. For small teams, that's often the first time the law becomes real, and it's a genuinely good moment to have it handled well.
You can share the cost.
Unlike health coverage's strict rules, TDI allows employers to share part of the cost with employees through a small payroll deduction, within limits the state sets. Many owners don't know this, and it changes the math.
The plan has to be real.
TDI obligations are met through an approved insurance plan or an approved self-insured arrangement. A handshake promise to 'take care of people' doesn't satisfy the law, even when it's sincere.
The part nobody tells you: TDI is a shopping opportunity.
Most businesses set up TDI once, years ago, and never look at it again. But TDI rates vary between carriers, and reviewing it alongside your health coverage and benefits package often uncovers savings that pay for upgrades elsewhere. It's one of the easiest wins in the whole benefits conversation, precisely because nobody ever looks.
Where cash benefits fit.
TDI replaces part of a paycheck for a limited time. Voluntary benefits like disability, accident, and hospital coverage stack on top, paying cash directly to your employee when life happens. Together they turn a scary season into a manageable one, and employees remember who made that possible.
You don't need to become a TDI expert. That's our job. Take the Wayfinder for Employers for a quick self-check, or book a conversation and we'll review what you have, what's required, and what it should cost.
Prefer a human right now? Call (808) 303-5040 (or text).
This page is general education, not legal or tax advice. Requirements have details and exceptions that depend on your specific situation, and rules change. Always confirm your obligations with a licensed professional.
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