When planning employee expenses, it’s easy to forget that your overall compensation package needs to include not only state and federal taxes but insurance, payroll, and benefits as well. And that’s not all the costs.
In the third quarter of 2021, the U.S. ECI reached 146.6, according to Statista, indicating a one percent increase in labor costs compared to the previous quarter.
How much does an employee cost in Hawaii?
Those who build a business in Hawaii will have to face a significant difference between wages and the actual cost of employment in Hawaii. It is because Hawaii is a difficult place to do business. That is where employers need to understand precisely how much an employee is worth to control their costs.
Forbes notes that increases in health insurance spending could harm Hawaii’s financial future, especially as they go hand in hand with increasing the state’s already significant unsecured pension obligations.
Employment costs fall into several broad categories:
• Staffing costs
• Base salary
• Taxes on work
• Office space
• Hardware and software
• Employee benefits
Other costs are predictable fixed costs, either as variable taxes or insurance programs. Business insurance rates are hard to predict and can increase every year, making hiring more expensive.
Features of the work of workers in Hawaii
There are some other features for employment in Hawaii that business owners on these islands should be aware of.
- If employees working more than 20 hours per week must be offered coverage.PHCA requires employers to provide health insurance for employees who work an average of 20 or more hours a week.
- Employees cannot pay more than 1.5% of their incomeUnder the PHCA, employers cannot claim more than 1.5% of their gross monthly salary from an employee for self-insurance costs. Thanks to this rule, many employers cover the total cost of employee bonuses.
- Employers must cover half of the bonus.
- One of the most effective rules states that employers must cover at least half of the insurance premium for employees only. It means that the employee is not responsible for more than half of their total health insurance premiums.
- Employees are required to enroll in insurance coverage
- The PHCA requires employees to enroll in their employer’s plan unless an exception applies. The most common exemption applies to insured employees by a program sponsored by their spouse’s employer. Employees with exemptions must provide Form HC-5 to the employer documenting the exemption.
How to Control Employee Costs in Hawaii
It’s no secret that employees are often the most expensive investment. It doesn’t matter if you work with a dedicated software development team or a travel business.
Studying the conditions of the state or area where you do business before you deploy your facilities is fundamentally essential. Employers have the opportunity to use best-in-class services to reduce the costs associated with attracting new employees.
Author’s bio: Anastasiia Lastovetska is a technology writer at MLSDev, a software development company that builds web & mobile app solutions from scratch. She researches the area of technology to create great content about app development, UX/UI design, tech & business consulting.