HB684 would phase out Hawaii’s tip credit under section 387-2, Hawaii Revised Statutes, which currently allows certain tipped employees to be paid below the state minimum wage so long as tips make up the difference. The bill states its purpose is to increase the income of tipped workers by gradually eliminating that credit until employers must pay all employees at least the full minimum wage directly.
The measure revises the existing wage schedule for tipped employees by stepping the allowable tip credit down over time: from $1.25 per hour beginning January 1, 2024, to 75 cents beginning January 1, 2025, 50 cents beginning January 1, 2027, 25 cents beginning January 1, 2029, and zero cents beginning January 1, 2031. It also changes the combined wage-and-tips threshold language so that the employee’s total compensation must be at least $7.00 more than the applicable minimum wage during the phaseout period. The bill takes effect upon approval.
If enacted, HB684 would amend Hawaii’s minimum wage and tip-credit rules for employers of tipped workers, including restaurants and other service-sector businesses that rely on tipped labor. It would increase direct wage obligations for employers over time and reduce the extent to which tips can be counted toward meeting wage requirements, ultimately ending the tip credit entirely by 2031.
The available legislative record shows no committee transcript or recorded votes, so there is no documented floor or committee debate in the provided materials. The bill’s framing suggests support for higher earnings and wage stability for tipped workers, while the phased timeline indicates an attempt to soften the transition for employers. The main likely point of contention is the cost to employers and the hospitality industry versus the benefit of guaranteeing tipped employees the full minimum wage.
Impact
HB684 would amend section 387-2, Hawaii Revised Statutes, by reducing and ultimately eliminating the tip credit for tipped employees. Over time, employers would no longer be able to count tips toward satisfying the state minimum wage requirement, and by January 1, 2031, tipped workers would have to be paid the full minimum wage directly by their employer. The bill would affect wage obligations for employers in tipped-service industries and would change the statutory formula governing tipped employee compensation.
Sentiment
The bill appears generally worker-supportive in purpose, aiming to raise income for tipped employees and ensure they receive at least the minimum wage from their employer. Because the bill uses a gradual phaseout rather than an immediate repeal, it suggests an effort to balance labor concerns with employer adjustment. No votes or committee testimony were provided, so there is no recorded opposition or support in the supplied materials, but the policy direction is clearly toward stronger wage protections for tipped workers.
Contention
The likely point of contention is whether eliminating the tip credit will improve earnings for tipped workers or instead increase labor costs for employers, particularly in restaurants and other hospitality businesses. Supporters would likely emphasize wage fairness and income stability for workers who depend on tips, while opponents would likely argue that the change could raise operating costs, affect pricing, or alter staffing practices. The phased schedule suggests lawmakers anticipated some resistance and sought to reduce disruption by delaying full implementation until 2031.