Hawaii Ready to Raise the Bar With $18 Minimum Wage

Author: Michael Cardman, XpertHR Legal Editor

May 5, 2022

Hawaii's legislature has passed, and Gov. David Ige is expected to sign, a bill that would gradually raise the state's minimum wage to $18.00 per hour over the next six years.

The $18.00 mark would represent a new high-water mark for state minimum wage rates. So far, only two states - California ($15.00 for large employers) and New York ($15.00 for employers in New York City and nearby counties) - and the District of Columbia ($15.20) have hit the $15.00 mark targeted by the "Fight for 15" campaign 10 years ago.

Other states may well catch up to Hawaii by the time 2028 rolls around. For example, in California, labor advocates are gathering signatures for a ballot initiative that would raise the state's minimum wage to $18.00 by 2025. Should that fail, annual inflation adjustments could bring California's minimum wage as high as $18.40 by 2028.

Of course, there is plenty of action below the $18.00 level as well. Although President Joe Biden's push for a $15.00 federal minimum wage has fizzled out, legislators in 35 states have introduced more than 100 bills to increase the minimum wage this year, according to the National Conference of State Legislatures - spurred on in no small part by record-high inflation levels.

Hawaii is "leading a renewed push for more robust wages," said Rebecca Dixon, executive director of the employee-advocate National Employment Law Project.

Details of the Bill

Under the bill, Hawaii's minimum wage would increase from its current level of $10.10 per hour to:

  • $12.00 per hour, effective October 1, 2022;
  • $14.00 per hour, effective January 1, 2024;
  • $16.00 per hour, effective January 1, 2026; and
  • $18.00 per hour, effective January 1, 2028.

Once it hits $18.00 per hour, the minimum wage would not increase unless the state legislature acts. Unlike many other states, Hawaii has no annual inflation adjustments.

In addition to increasing the minimum wage, the bill also would increase the maximum tip credit from its current level of $0.75 per hour to:

  • $1.00 per hour, effective October 1, 2022;
  • $1.25 per hour, effective January 1, 2024; and
  • $1.50 per hour, effective January 1, 2028.

The law also makes permanent the state earned income tax credit as of January 1, 2023 (it was set to expire on December 31, 2022).