Hawaii Severance Pay Laws (2026): Is Severance Required?

No Hawaii law requires an employer to pay severance. The closest thing is the Hawaii Dislocated Workers Act (HRS chapter 394B). When a business with 50 or more employees closes, partially closes, divests or relocates out of state, it must give 60 days' written notice (HRS 394B-9). After a closing, partial closing or relocation (not a divestiture), it must also pay a "dislocated worker allowance" of up to four weeks that covers the gap between your prior average weekly wages and your unemployment benefit (HRS 394B-10).

If your employer promised severance in a policy or contract, Hawaii's wage law does not say whether that promise counts as "wages," but a Department of Labor and Industrial Relations (DLIR) rule addresses severance claims filed with the department. For how other states handle severance and the full federal rules, see our severance pay laws by state guide.

Information last verified on October 7, 2026. This article has not been reviewed by a licensed lawyer.

Jurisdiction scope: This article covers Hawaii law on severance pay: the Dislocated Workers Act (HRS chapter 394B) and DLIR's rules for it (HAR chapter 12-506), the Wage and Salary Payment law (HRS chapter 388), the employment security law (HRS chapter 383), and HRS 378-2.2 on nondisclosure agreements, with short notes on the federal rules that apply in Hawaii. It does not cover when your last regular paycheck is due; see Hawaii final paycheck laws. It does not cover benefit amounts or how to file for unemployment; see Hawaii unemployment benefits.

Is severance pay required in Hawaii?

No Hawaii statute we found requires an employer to pay severance. We read every section of the Dislocated Workers Act (HRS 394B-1 through 394B-13) and the key sections of the wage payment law (HRS 388-1, 388-3, 388-5, 388-6, 388-8 and 388-11), and searched the unemployment law (chapter 383) and the employment practices law (chapter 378) for severance, dismissal and pay in lieu of notice.

This finding rests on those chapters, not a full-text search of every Hawaii statute. We did not search the minimum wage and overtime law (chapter 387) or the temporary disability insurance law (chapter 392).

Federal law does not fill the gap. The U.S. Department of Labor says the Fair Labor Standards Act does not require severance pay and that severance is "a matter of agreement between an employer and an employee." Whether your employer could end your job in the first place is a separate question, covered on our Hawaii at-will employment page.

Hawaii's Dislocated Workers Act (HRS chapter 394B)

Hawaii's version of a plant-closing law is the Dislocated Workers Act. It is narrower than many people expect: it is tied to specific business events, not to every layoff, and the payment it requires is called a dislocated worker allowance, not severance.

Which employers and events are covered

Some summaries say Hawaii's 60-day notice applies to any layoff of 50 or more employees. The statute does not say that. Its notice duty applies to a covered establishment's closing, partial closing, divestiture or relocation, and DLIR's rules tie a closing to a sale, transfer, merger or similar transaction (HAR 12-506-3).

Shutdowns in bankruptcy are an open question. Since a 2007 amendment, the statute's definition of a closing has listed bankruptcy. DLIR's rules for the Act, last amended in 2002, still say that a shutdown caused by "business failure, bankruptcy, or loss of lease or contract" is not a closing (HAR 12-506-4(b), 12-506-5(b)). We found no DLIR guidance or court decision reconciling the two. If your employer shut down in bankruptcy, ask DLIR how it applies the Act.

Notice: 60 days to employees and the DLIR director

The core rule is in HRS 394B-9(a):

"An employer in a covered establishment shall provide to each employee and the director written notification of a closing, divestiture, partial closing, or relocation at least sixty days prior to its occurrence."

The notice to the director must include the employer's name and address, a contact person, the date of the event, the number of employees at the establishment, and the approximate number to be laid off (HAR 12-506-7). An employer that is actively seeking a buyer does not have to give notice until it has a binding sale agreement (HRS 394B-9(c)).

Federal WARN applies separately: it requires 60 days' notice from employers with 100 or more employees, not counting part-time employees, or with 100 or more employees, counting part-time employees, who together work at least 4,000 hours a week, not counting overtime (29 U.S.C. 2101-2102), and its notice period runs at the same time as any notice period required by another statute (29 U.S.C. 2105). Our severance pay laws guide covers the federal rules.

What an employer owes for skipping notice

An employer that fails to give the 60-day notice is liable to each affected employee for back pay and benefits for the period of the violation, not to exceed 60 days (HRS 394B-9(b)). The amount is reduced by wages the employer paid during the notice period and by voluntary, unconditional payments that no legal obligation required.

The employer also faces a civil penalty of up to $500 for each day of the violation. It can avoid the penalty by satisfying its liability to employees within three weeks after the closing (HRS 394B-9(d)). DLIR enforces the notice requirement (HRS 394B-9(e)).

The dislocated worker allowance (HRS 394B-10)

This is the one payment the Act requires even when the employer gives proper notice. For each week an affected employee is found eligible for unemployment benefits based on employment at the closed establishment, the employer pays the difference between:

• the employee's average weekly wages before the closing, including compensated leave, and
• the unemployment benefit the employee receives.

The allowance is capped at four weeks in total for each closing (HRS 394B-10(a)-(c)). Receiving it does not affect your eligibility for unemployment or the amount of your benefit (HRS 394B-10(d)).

The allowance is not automatic. DLIR's rules require you to be eligible for, and not disqualified from, unemployment benefits for the week, to file a claim for the allowance with your employer under the employer's procedures, and to give the employer your unemployment eligibility determination; the employer must then pay promptly (HAR 12-506-8).

The allowance does not apply where a collective bargaining agreement provides supplemental unemployment benefits; that agreement supersedes it (HRS 394B-10(f)). DLIR's rules define those benefits as "any remuneration or benefit, such as severance pay, that are given upon the employee's termination" (HAR 12-506-2).

Wages due at a closing, and other violations

On the effective date of a closing, the employer must pay "all wages, benefits, and other forms of compensation due and owing" (HRS 394B-11). An employer that violates other parts of the chapter is liable to each affected employee for the value of all their wages, benefits and other compensation for the three months before the closure (HRS 394B-12).

Employees may sue to enforce the chapter, and in an employee's action the court awards costs and reasonable attorney's fees against the defendant (HRS 394B-13). We did not find a current DLIR guidance page or notice form for the Act.

Promised severance under Hawaii's wage law

Hawaii has no statute that says whether severance an employer promised counts as "wages." HRS 388-1 defines wages as "compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission, or other basis of calculation." No Hawaii decision we found applies that definition to severance. The closest one points the other way: the official notes to HRS 388-1 record that in Casumpang v. ILWU Local 142, 108 Haw. 411 (2005), the trial court did not err in concluding that payment for unused vacation upon separation was not "wages" under that definition. A court could reason the same way about severance, so the wage-law remedies below may not be available for it, and a breach-of-contract claim may be the more reliable route.

DLIR's wage rules do treat severance as something an employee can claim. HAR 12-21-7 provides:

"A claim for accrued vacation or severance pay shall be considered filed within one year from the date the vacation or severance pay is due and payable if filed with the director or authorized departmental representative within one year from the date of termination from employment with the employer."

The copy of this rule we read is posted on DLIR's website with a 1981 effective date; we could not confirm it is the current text. A severance promise in a contract or written policy may also be enforceable as a contract; a lawyer licensed in Hawaii can advise on that route.

If your severance comes from a formal company plan, federal law may govern it instead: ERISA supersedes state laws that relate to covered employee benefit plans (29 U.S.C. 1144(a)), and the U.S. Department of Labor says its Employee Benefits Security Administration may assist an employee who did not receive severance under an employer-sponsored plan.

When must severance be paid in Hawaii?

We found no Hawaii statute that sets a deadline for promised severance. It is due when the agreement or policy says it is due.

Final wages follow a different rule. When an employer discharges an employee, with or without cause, it must pay wages in full at the time of discharge, or no later than the next working day if conditions prevent immediate payment (HRS 388-3(a)). An employee who quits is paid by the next regular payday (HRS 388-3(b)). After a covered closing, everything "due and owing" is payable on the effective date of the closing (HRS 394B-11). For your last regular paycheck, see Hawaii final paycheck laws.

How to claim unpaid severance in Hawaii

DLIR's Wage Standards Division takes unpaid-wage complaints under chapter 388 and explains on its "Unpaid Wages" page how to file one. Its pages do not say whether it accepts a complaint about severance alone; the support for that route is the wording of HAR 12-21-7.

Deadlines and remedies

The DLIR director's power to take and collect a wage claim under HRS 388-11(b) does not extend to employees in a bona fide executive, administrative or professional capacity or outside salespersons, as DLIR's rules define them (HAR 12-21-6, which includes pay of $1,500 or more a month). Employees in those roles can still sue under HRS 388-11(a).

Chapter 388 does not state a deadline for a wage lawsuit in court. A suit to collect severance promised in a contract is generally subject to Hawaii's six-year limit for actions to recover a debt founded on a contract (HRS 657-1(1)); a lawyer can confirm which limit applies to your claim. DLIR's one-year windows are much shorter.

Severance and Hawaii unemployment benefits

Hawaii's unemployment statute does not mention severance by name. It defines wages as "all remuneration for services from whatever source" (HRS 383-10), and the list of exclusions in HRS 383-11 does not name severance.

DLIR's claimant handbook (revised September 2024) says:

"A severance package, pay in lieu of notice, or a continuation of pay with full benefits from an employer may affect UI benefits."

The handbook tells claimants to report any separation payments when they file their weekly or biweekly claim, and says the agency may contact you to decide whether your separation pay is deductible. Neither the statute nor the handbook gives a formula, so DLIR decides each case. The dislocated worker allowance is different: by statute it does not affect your eligibility or benefit amount (HRS 394B-10(d)). For benefit amounts and filing, see Hawaii unemployment benefits.

What a Hawaii severance agreement can and cannot require

We found no Hawaii statute setting a review or revocation period for a private severance agreement. We searched the employment practices chapter (378) and the wage payment chapter (388).

A release in a severance agreement cannot take away your right to unemployment benefits. Under HRS 383-161(a), any agreement by an individual to waive, release, or commute rights to benefits or other rights under Hawaii's employment security law is void, and HRS 383-161(b) provides that no employer shall "require or accept any waiver of any right hereunder by any individual in the employer's employ."

Nondisclosure terms about sexual harassment or assault

HRS 378-2.2(a) provides that "No employer shall enter into or require an employee to enter into a nondisclosure agreement that prevents the employee from disclosing or discussing sexual harassment or sexual assault occurring in the workplace," at work-related events, between employees, or between an employer and an employee. An employer may not retaliate against an employee for disclosing or discussing it (HRS 378-2.2(b)).

The law exempts human resources employees keeping an investigation confidential as part of their duties, employees asked to keep an ongoing HR investigation confidential, and peer-review proceedings under HRS 624-25.5 (HRS 378-2.2(c)). The text does not contain a separate rule for settlement agreements.

Releases of wages the employer admits it owes

When there is a wage dispute, an employer must pay the wages it concedes are due "without condition." Accepting that payment does not release the disputed amount, and "any release required by an employer as a condition to payment shall be in violation of this chapter and shall be null and void" (HRS 388-5). Except as chapter 388 itself allows, its provisions cannot be set aside by private agreement (HRS 388-8).

These sections protect "wages" under chapter 388. Because the law has not settled whether promised severance is wages, we cannot say whether they reach a release demanded in exchange for severance.

Non-compete terms in a severance agreement

Hawaii makes a noncompete or nonsolicit clause void in any employment contract of an employee of a technology business, except a promise not to use the employer's trade secrets (HRS 480-4(d)); other restrictive covenants are judged under Hawaii's restraint-of-trade statute (HRS 480-4). The statute speaks of an "employment contract" and does not say whether a separation agreement counts, so ask a Hawaii lawyer before signing one with a noncompete.

Federal limits that also apply

These federal rules apply in Hawaii; our severance pay laws guide explains each:

• Workers 40 and older. A release of federal age-discrimination claims must give you at least 21 days to consider it (45 days in a group layoff) and 7 days to revoke it after signing (29 U.S.C. 626(f)).
• Sexual harassment and assault. Under the federal Speak Out Act, a nondisclosure or non-disparagement clause agreed to before such a dispute arises cannot be enforced in court (42 U.S.C. 19403). The Act preserves state laws that are at least as protective.

Reading a Hawaii severance offer

If your workplace closed, was sold or moved out of state, check whether your employer gave 60 days' notice and, after a closing, partial closing or relocation, whether it is paying the dislocated worker allowance, which is separate from any severance it offers. To get the allowance, file a claim for it with your employer and give the employer your unemployment eligibility determination (HAR 12-506-8). Keep the policy or agreement that promises severance and note when it says payment is due, because DLIR's one-year deadlines run from the date pay was due and from your termination. Report any severance when you file for unemployment. Our severance pay laws guide has general guidance on reading and negotiating an offer.

Recent Hawaii changes and pending bills

We found no act from 2024 through 2026 that changed Hawaii's severance-related laws. The legislature's current statute pages show HRS 394B-9 last amended in 2011, HRS 394B-2 in 2007, and HRS 378-2.2 in 2022; the wage definition in HRS 388-1 was amended in 2023.

We could not search the legislature's 2025-2026 bill index because the site blocked our requests, so we cannot say whether any bill on plant closings, severance or separation agreements is pending. Check the Hawaii State Legislature's website before relying on the absence of one.

Related

• Severance pay laws by state
• Hawaii unemployment benefits
• Hawaii final paycheck laws
• Hawaii at-will employment laws

Disclaimer: This article provides general legal information about Hawaii severance pay law (the Dislocated Workers Act, HRS chapter 394B, the Wage and Salary Payment law, HRS chapter 388, the employment security law, HRS chapter 383, and HRS 378-2.2) and the federal laws that apply in Hawaii. It is not legal advice. The information was verified on October 7, 2026. For advice about your situation, contact the Hawaii Department of Labor and Industrial Relations, a legal aid office or a lawyer licensed in Hawaii.

Last updated: October 7, 2026.

Frequently Asked Questions

Is severance pay required by law in Hawaii?

No. We found no Hawaii statute requiring severance. The Dislocated Workers Act requires a different payment, a dislocated worker allowance of up to four weeks, only after a covered closing, partial closing or relocation (HRS 394B-10(a)); a divestiture triggers the notice duty but not the allowance.

Does Hawaii have its own WARN Act?

Yes, in effect. The Hawaii Dislocated Workers Act (HRS chapter 394B) requires a business with 50 or more employees to give employees and the DLIR director 60 days' written notice of a closing, divestiture, partial closing or relocation (HRS 394B-9(a)).

What is the dislocated worker allowance in Hawaii?

For each week you are eligible for unemployment based on your job at the closed business, the employer pays the difference between your prior average weekly wages and your unemployment benefit, for up to four weeks per closing (HRS 394B-10). It is not automatic: you file a claim for it with your employer and give the employer your unemployment eligibility determination (HAR 12-506-8).

What can I recover if my Hawaii employer closed without 60 days' notice?

Back pay and benefits for the period of the violation, up to 60 days, reduced by wages paid during the notice period and certain voluntary payments (HRS 394B-9(b)). Employees may sue under HRS 394B-13.

Is severance considered wages in Hawaii?

The statute does not say. HRS 388-1 defines wages as compensation for labor or services rendered, and no Hawaii decision we found applies it to severance. A 2005 decision noted in the statute (Casumpang v. ILWU Local 142, 108 Haw. 411) upheld a ruling that payment for unused vacation on separation was not wages, which suggests severance may not be either, though a DLIR rule (HAR 12-21-7) sets a filing window for severance claims.

How long do I have to file a claim for unpaid severance with Hawaii DLIR?

HAR 12-21-7 treats a severance claim as timely if filed with the director within one year of termination, and HRS 388-11(b) bars the director from accepting a wage claim more than one year after the wages were due. The director's claim route does not cover employees in a bona fide executive, administrative or professional capacity or outside salespersons (HRS 388-11(b), HAR 12-21-6); they can sue instead.

Does severance affect unemployment benefits in Hawaii?

It can. DLIR's claimant handbook says a severance package, pay in lieu of notice, or continued pay with full benefits may affect benefits, and that you should report separation payments when you file your claim. The dislocated worker allowance does not reduce benefits (HRS 394B-10(d)).

Can a Hawaii severance agreement keep me from talking about sexual harassment?

Hawaii bars employers from entering into or requiring a nondisclosure agreement that prevents an employee from disclosing or discussing sexual harassment or sexual assault in the workplace, with narrow exceptions for HR investigations (HRS 378-2.2).

How long do I have to sign a severance agreement in Hawaii?

We found no Hawaii statute setting a review or revocation period. If you are 40 or older, federal law gives you at least 21 days to consider a release of age claims, 45 in a group layoff, and 7 days to revoke it (29 U.S.C. 626(f)).