Relating To The Minimum Wage.
If enacted, HB28 will modify existing labor laws within the state, particularly sections pertaining to minimum wage calculations for tipped employees. One notable impact is the adjustment of the minimum wage requirements over the next few years, which includes an increase in the tip credit allowable by employers, transitioning from the current structure to a new one that affords more security to workers relying on tips.
House Bill 28 seeks to amend the minimum wage laws of Hawaii, specifically addressing the compensation structure for tipped employees. The bill introduces gradual changes to the hourly wages that employers can claim as part of the tip credit system, which allows employers to pay a lower base wage to tipped employees as long as their combined earnings from tips and that wage exceed a stipulated minimum. This amendment aims to ensure that tipped workers are fairly compensated while still considering the customary reliance on tips in service industries.
The proposal has brought about discussions on the implications for employers, especially in the hospitality industry, who argue that raising the minimum wage in this manner might lead to increased operational costs. Opponents of the bill highlight the risk of reduced employment opportunities as employers might opt to cut jobs or limit hiring due to heightened payroll expenses. Supporters counter that a fairer wage structure is necessary to combat poverty among low-wage workers, especially in sectors heavily reliant on tips, indicating that the benefits would outweigh the potential drawbacks.