Hawaii Independent Contractors laws & HR compliance analysis

Hawaii Independent Contractors: What you need to know

Whether a worker is an “employee” or an “independent contractor” is critical when it comes to such important issues as pension eligibility, workers' compensation coverage, wage and hour law, and many other matters. In some situations, federal law will govern, but the question is most often resolved by looking to state law, particularly in areas such as unemployment tax liability, workers' compensation, and state wage and hour requirements.
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An employer-employee relationship is a prerequisite for determining whether an individual is eligible for workers' compensation coverage. The Hawaii Supreme Court has ruled that the control test is the primary guideline for determining the existence of an employment relationship for workers' compensation purposes (Locations Incorporated v. Hawaii Department of Labor and Industrial Relations, 900 P.2d 784 (1995)). Under the control test, an employment relationship is established when "the person in whose behalf the work is done has the power, express or implied, to dictate the means and methods by which the work is to be accomplished.
Services performed for wages or under any employment contract are presumed to be employment covered by the unemployment compensation requirements whether or not the individual is a common-law employee. To be exempt from coverage, an individual must prove to the Department of Labor and Industrial Relations that all three of the following requirements are met:
• The individual has been and will continue to be free from control or direction over the performance of such service; and
• The service is either outside the usual course of the business for which the service ...

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