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Hawaii Unemployment Experience Transfer With Form UC-86

Facts last checked November 11, 2026

Employers in Hawaii pay unemployment insurance at a rate based on their own history, and Honolulu Business Brokers Firm sees buyers ask whether that history can come along with the company.

The form is short, but timing matters.

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A company owner and a buyer review an unemployment insurance waiver form and an employee roster at a desk
Agency
The Hawaii Department of Labor and Industrial Relations, Unemployment Insurance Division
Form or filing
Form UC-86, a waiver of the employer's experience record, signed by both the seller and the buyer
Timing
The employer FAQ describes a 60 day mark after the transfer and a March 1 date the following year that change how the buyer's rate is set, so file promptly

Common snag: Assuming it happens by itself. A buyer who does not file the form properly may start with the new employer rate.

This guide is general information and is not tax or legal advice. Confirm every step with your attorney, your CPA and the Department of Labor and Industrial Relations.

Why the Experience Record Matters

Each Hawaii employer has an unemployment insurance record that helps set its tax rate. A business with few claims earns a lower rate, and one with many claims pays more.

When a business changes hands, the buyer may want to take over the seller's record to keep a favorable rate.

What Form UC-86 Does

The Department's employer FAQ describes Form UC-86 as a waiver of the employer's experience record. Both the seller and the buyer sign it, and it has to be filed within the time limits the Department sets.

A successor who takes over the business can ask to acquire the predecessor's record, and the rules also cover partial transfers. Ask the Department how they apply to your sale.

Timing

The FAQ describes different outcomes depending on when the form is filed. Filing after about 60 days from the transfer, but before March 1 of the next year, can combine the two records to set the rate. Until then the buyer may carry the new employer rate.

Do not wait. Put the form on the closing checklist.

Be Careful With Unusual Moves

The Department also watches for schemes that shift records to lower rates, often called SUTA dumping. A normal sale of a real business to a real buyer is not that, but keep documents that show the business changed hands.

Steps for Sellers

  1. Confirm with the Department that your unemployment accounts are current.
  2. Ask your attorney to add the form to the closing checklist.
  3. Sign Form UC-86 with the buyer and file it on time.
  4. Keep a copy and the filing date in your closing file.

What the Buyer Gets From It

A favorable record can lower the buyer's tax rate for years, so some buyers negotiate for it. A seller with many claims may prefer that the buyer start fresh, and the rules give the successor a choice.

Decide early, and put the decision in the agreement.

Questions to Ask the Department

Ask whether your sale counts as a full or partial transfer, which deadline applies to you and whether the filing can be made online. Write down the answers and the date, since your attorney may want them for the closing file.

If the buyer already has Hawaii employees, ask how that changes the picture.

Where This Fits in the Sale

Read the guides on tax clearance and the bulk sale report. Then ask what your business is worth.

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