Hawaii Dislocated Workers Act (HRS 394B): Severance Pay Rules for Mass Layoffs
Under Hawaii law, covered employers with 50 or more workers must provide 60 days of written notice before a business closing, partial closing, or relocation triggered by an ownership transfer. Employers who violate the notice requirement owe back pay and benefits, while eligible workers qualifying for unemployment may receive a statutory dislocation allowance for up to four weeks.
Losing your job due to a sudden corporate restructuring or a mass layoff is devastating. In most states, companies can let you go with no severance pay whatsoever. However, Hawaii offers some of the strongest worker protections in the United States. Under the Hawaii Dislocated Workers Act (DWA), large employers cannot simply lock the doors and walk away. If you were laid off in Honolulu, Kahului, or Kailua-Kona due to a qualifying business closing, partial closing, or relocation resulting from a corporate takeover or ownership transfer, your employer may be legally required to provide statutory back pay or a mandatory dislocation allowance.
This law is incredibly specific, and employers frequently attempt to use loopholes to avoid paying out thousands of dollars. They might argue that the layoff was due to unforeseeable business circumstances or that they do not meet the 50-employee threshold. If you believe you were denied your legal severance pay, you should consult an employment attorney from our directory to help you file a claim and secure the compensation you deserve.
Step-by-Step Process to Claim Your Allowance
Securing your dislocation allowance involves acting quickly and understanding your rights under state law.
Step 1: Determining Employer Eligibility
Not every business is covered. Under Haw. Rev. Stat. § 394B-2, the law applies to covered establishments, defined as entities employing 50 or more individuals at any time during the preceding 12 months, where a closing, partial closing, or relocation arises from a sale, transfer, merger, or other business takeover. If your company meets these statutory requirements, it is bound by the DWA.
Step 2: Evaluating the 60-Day Notice Rule
A covered employer must provide written notice to affected employees and the Department of Labor and Industrial Relations, Honolulu at least 60 days prior to the closing, partial closing, or relocation under Haw. Rev. Stat. § 394B-9(a). If they fail to provide this 60-day notice, the employer is liable to each affected employee for back pay and benefits for the period of violation up to 60 days under Haw. Rev. Stat. § 394B-9(b), in addition to potential civil penalties under Haw. Rev. Stat. § 394B-9(d).
Step 3: Calculating the Severance Pay
Under Haw. Rev. Stat. § 394B-10, the dislocation allowance is not a lump-sum severance payout, but rather a weekly supplement equal to the difference between the employee's average weekly wages before the layoff and their weekly unemployment insurance benefit under Haw. Rev. Stat. § 383-1 et seq.. Eligible affected employees may receive this supplement for a maximum of four weeks under Haw. Admin. Rules § 12-506-8. To qualify, an employee must apply for and be determined eligible for state unemployment benefits; workers who immediately secure new employment and do not receive unemployment compensation are not entitled to this allowance.
Step 4: Filing a Complaint with DLIR
If the employer refuses to pay, your attorney will help you file a formal wage claim with the DLIR. You can initiate this by submitting a complaint to the Wage Standards Division to demand enforcement of the statute and collection of your owed wages.
Industry-Specific Mass Layoffs in Hawaii
The Hawaii economy relies heavily on a few massive sectors. Unlike the federal 29 U.S.C. § 2101, which covers broad economic mass layoffs, the Hawaii Dislocated Workers Act specifically governs closings, partial closings, and relocations triggered by a sale, transfer, merger, or other business takeover under Haw. Rev. Stat. § 394B-2. Furthermore, as confirmed in Kane v. PaCap Aviation Finance, LLC, No. 24-6345 (US 9th Circuit Court of Appeals 2026), claims for violating the 60-day notice requirement under Haw. Rev. Stat. § 394B-9 and claims for failure to promptly pay wages and earned benefits upon closing under Haw. Rev. Stat. § 394B-11 constitute distinct statutory causes of action against entities qualifying as an employer under Haw. Rev. Stat. § 394B-2.
Agricultural Farms
Historically, Hawaii has seen massive closures of sugar and pineapple plantations. Today, large agricultural operations on Maui or the Big Island are still subject to the DWA when corporate acquisitions or transfers occur. If a major farming corporation shuts down harvesting operations and terminates 50 or more workers as part of a sale or business takeover, management must provide the required 60-day notice and comply with statutory allowance requirements for eligible dislocated farmhands.
Large Hotel Closures
The hospitality industry is the backbone of Hawaii. When a massive resort in Waikiki or a luxury hotel on the Kohala Coast undergoes a change in ownership, sale, or merger resulting in a permanent shutdown or partial closing, hundreds of housekeepers, front desk agents, and restaurant staff may be impacted. In qualifying transactions under Haw. Rev. Stat. § 394B-2, hotel ownership must strictly provide 60 days of advance notice to avoid back pay liability under Haw. Rev. Stat. § 394B-9.
Manufacturing Facilities
While smaller in scale than hospitality, Hawaii's manufacturing sector (such as food processing or beverage bottling) is also heavily regulated. A manufacturing plant that shifts its operations to the mainland and leaves its Hawaii workforce behind is exactly the type of scenario the Dislocated Workers Act was designed to penalize.
How Much Does it Cost in Hawaii?
Pursuing a claim for unpaid dislocation allowances is generally affordable for workers.
- Filing with DLIR: Filing a wage complaint directly with the state labor department is completely free.
- Attorney Fees: Most employment lawyers take these cases on a contingency basis, meaning they take a percentage (usually 30% to 40%) of the settlement only if you win. Additionally, Hawaii labor laws often require the losing employer to pay your attorney fees.
How Long Does the Process Take?
If an employer realizes they violated the 60-day notice rule, they may issue the four weeks of pay immediately upon termination. However, if they fight the requirement, an investigation by the DLIR can take 3 to 6 months. If the case requires a civil lawsuit in a venue like the First Circuit Court, Honolulu, it could take 12 to 18 months to recover your funds.
Frequently Asked Questions (FAQ)
Does the DWA apply if the business goes bankrupt?
Generally, if a federal bankruptcy court orders the closure, the state law may be preempted or modified by federal bankruptcy protections, making it much harder to collect the allowance.
Do part-time employees get the dislocation allowance?
Yes. If a part-time employee qualifies as an affected employee and is eligible for state unemployment compensation, they are entitled to the weekly supplement for up to four weeks, calculated based on their average weekly wages.
What if the employer gives 30 days' notice instead of 60?
Providing only 30 days of notice violates the 60-day notice mandate under Haw. Rev. Stat. § 394B-9. As a penalty under Haw. Rev. Stat. § 394B-9(b), the employer is liable to each affected employee for back pay and benefits for the 30-day deficit, in addition to potential civil penalties under Haw. Rev. Stat. § 394B-9(d). This liability is separate from the dislocated worker allowance provided under Haw. Rev. Stat. § 394B-10.
Can an employer force me to sign away my DWA rights?
No. Your rights under the Dislocated Workers Act are statutory. An employer cannot force you to waive this specific allowance just to receive your final paycheck.
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