Governor signs minimum wage increase into law

Today, Governor Neil Abercrombie signed Senate Bill 2609 into law. Act 82 will incrementally increases the state’s minimum wage rate over the next four years, as well as the tip credit (the amount employers can deduct from certain tip-earning employees’ hourly wage) over the next two years.

“A hardworking sector of our community has gone seven years without a raise,” said the governor at the bill signing. “This legislation will raise Hawaii’s minimum wage from $7.25 to $10.10 an hour, providing our lowest paid workers with the economic stability and security they deserve.”

President Barack Obama also commented on today’s signing saying, “I applaud Governor Abercrombie and the Hawaii Legislature for increasing their state’s minimum wage. Their actions will help to ensure that hardworking people of Hawaii receive the raise all Americans deserve.”

“Too many Americans, despite working full time, are falling behind and living in poverty,” said Secretary of Labor Thomas E. Perez. “Hawaii has taken a step in the right direction to change that by giving workers at the bottom of the income ladder a much-needed boost so that they can better afford the basics like rent and food for their families. And businesses will benefit, too, as that extra income is spent locally on goods and services, ultimately strengthening the bottom line.”

“The last four times the minimum wage was increased, the number of businesses went up by an average of 2.4 percent and the number of jobs increased an average of 2.1 percent 12 months later,” state Department of Labor and Industrial Relations Director Dwight Takamine said. “Minimum wage increases boost consumer demand and generate economic activity as workers spend more.”

Act 82 increases the state’s minimum wage rate to $7.75 per hour beginning Jan. 1, 2015, $8.50 per hour beginning Jan. 1, 2016, $9.25 per hour beginning Jan. 1, 2017 and $10.10 per hour beginning Jan. 1, 2018.

It also raises the tip credit to 50 cents per hour beginning Jan. 1, 2015 and 75 cents per hour beginning Jan. 1, 2016, as long as the combined amount the employee receives in wages and tips is at least $7 more than the applicable minimum wage beginning Jan. 1, 2015.