Lawmakers in the state House of Representatives have advanced a proposal to raise the minimum wage more slowly than what the state Senate had suggested.
The House Labor Committee approved the bill unanimously Tuesday. It advances next to the Finance Committee before facing a final House vote to be sent to the governor’s desk.
The minimum wage in Hawaii has stood at $7.25 per hour for the past seven years. But supporters of the hike say the cost of living has increased. The bill would raise the minimum wage gradually until it reaches $10.10 per hour in 2018, instead of reaching that level by 2017.
In the hearing, the Hawaii Restaurant Association asked the committee to take a more gradual approach to raising the minimum wage.
"The restaurant industry is a significant part of the Hawaii economy," said Roger Morey, representing the association. "Whatever actions you take here in the House are going to have a significant impact on small business."
Hawaii is among the most expensive states to live in the nation.
"You can’t understate the national significance of Hawaii going to $10.10 an hour," said Jack Temple, policy analyst for the National Employment Law Project, after the hearing. "This is what the president is calling for and what Congress has been dragging its feet on. This is good news for workers."
It would have been better for workers to have a faster phase-in, but compromise is always a part of the process, Temple said.
The committee also voted to change the tip credit, which under current law allows employers to pay workers $7 an hour instead of $7.25 if they earn at least 25 cents per hour in tips. The House Labor Committee voted to change the way the tip credit is calculated, following a suggestion from the state Department of Labor and Industrial Relations.
The tip credit would be eliminated for workers who earn less than 250 percent of the poverty line, following federal guidelines for the state of Hawaii.
For example, if a waitress earned less than $33,550, the employer would still have to pay the full amount of the minimum wage. The federal poverty level for a single person in the state of Hawaii is $13,420 per year in 2014, according to the U.S. Department of Health and Human Services.
For those earning more than 250 percent of the poverty level, the tip credit would increase by 25 cents per hour each year to reach $1 per hour in 2018.
It will be challenging for employers to calculate the tip credit fairly, said Janet Mason of the League of Women Voters.
"You can see they’re trying to balance the interest of low-wage workers and the employers," she said. "But our position is there shouldn’t be a tip credit at all."