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House pitches a delay for small business

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State House negotiators suggested Thursday that a minimum wage increase be delayed for workers at small businesses, a tactic that could put pressure on the state Senate to accept the existing House draft of the bill.

The House has approved a bill that would increase the minimum wage to $10 an hour by January 2018 and expand a tip credit to 75 cents. Businesses could claim the tip credit on workers who earn at least $7 more than the minimum wage. But the Senate opted to go to conference committee with the goal of boosting the minimum wage to $10.10 an hour by January 2017.

House negotiators floated a proposal in conference Thursday that would delay implementation of a minimum wage increase on businesses with 100 employees or fewer until January 2019.

"The rationale was that we did want to show that there was some concern about the implementation and its impact on small business," said Rep. Mark Nakashima (D, Kukuihaele-Laupahoehoe-North Hilo), the lead House negotiator. "This was something that the House leadership wanted us to float in conference to see whether or not there was interest in pursuing that."

Sen. Clayton Hee (D, Heeia-Laie-Waialua), the lead Senate negotiator, said the Senate would respond Monday. Hee had pressed for a conference committee over the objections of Senate leaders who had wanted to accept the House draft of the bill and send the legislation to Gov. Neil Abercrombie.

"My understanding is that it probably is a step in the opposite direction of what the Senate wishes to do with respect to the working poor," he said.

Hee said he suspects the House is sending a message.

"I’m not quite sure what the message is, but at least at first blush it doesn’t help the working poor," he said.

Some lawmakers had worried that forcing conference committee negotiations might jeopardize the bill’s passage or lead to a weaker bill for low-income workers. A minimum wage increase died last year in conference after a disagreement over the size of the tip credit.

The state’s $7.25-per-hour minimum wage has not been raised since 2007. The tip credit is 25 cents.

The Rev. Bob Nakata, a social-service advocate, has argued that the House draft already makes workers wait too long four years to receive the full wage increase. He and other activists have sided with Hee’s position but at the same time do not want to risk jeopardizing the bill.

"We have problems with the four years," he said. "We want three."

Lauren Zirbel, executive director of the Hawaii Food Industry Association, said it would be helpful for small businesses to delay implementation of a minimum wage increase.

"It would also aid in them planning their budgets in advance, which is a really big problem when you’re operating on small margins, as many small businesses do," she said. "I think it would go a long way toward helping our local businesses."

Zirbel and others who represent business interests have cautioned lawmakers that a steep increase in the minimum wage could lead businesses to cut worker hours and reduce benefits.

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