RELATING TO THE DEPARTMENT OF BUSINESS, ECONOMIC DEVELOPMENT, AND TOURISM.
Summary
SB981 directs the Research and Economic Analysis Division within the Department of Business, Economic Development, and Tourism (DBEDT) to study the effects of Hawaii’s minimum wage increases enacted under Act 114, Session Laws of Hawaii 2022. The study must examine how many businesses and other employers subject to the wage law were affected, how many closed or shut down because of higher labor costs, and what other factors may have contributed to those closures. It must also compare Hawaii’s experience with other states that have adopted higher minimum wages and assess the business impacts in those states.
The bill requires DBEDT to submit a report with findings, recommendations, and any proposed legislation to the Legislature before the 2026 regular session. It also includes an unspecified general fund appropriation for fiscal year 2025-2026 to carry out the study. Although the bill text sets an effective date of July 1, 2050, its practical purpose is to authorize and fund a near-term policy study rather than immediately change wage law.
Impact
SB981 does not directly alter minimum wage rates or amend the wage statutes themselves; instead, it creates a legislative study mandate for DBEDT and appropriates state funds for that work. Its main legal effect is to require the department to collect data, analyze business impacts, and report back to the Legislature, potentially informing future amendments to Hawaii’s wage laws or related economic policy. The bill specifically focuses on employers subject to section 387-2, Hawaii Revised Statutes, and on the broader business consequences of Act 114’s incremental wage increases.
Sentiment
The available voting history suggests generally favorable sentiment toward the bill, with the Senate Economic Development and Technology Committee passing it unanimously, 3-0, with amendments. The bill then advanced on second reading and was referred to Ways and Means, indicating continued legislative interest in evaluating the economic effects of the minimum wage increases. No committee transcript is available, so the discussion record does not show detailed debate, but the action history points to broad support for studying the issue rather than immediate policy reversal.
Contention
The main point of contention implied by the bill is the economic impact of higher minimum wages on employers, especially whether increased labor costs have contributed to business closures. The bill’s required analysis of closures and comparison with other states suggests concern among some lawmakers or stakeholders that wage increases may burden small businesses or other employers. At the same time, the bill’s advancement with amendments and unanimous committee vote indicate that the Legislature was comfortable pursuing a fact-finding approach rather than taking a definitive position for or against the wage increases themselves.
Requesting The Department Of Business, Economic Development, And Tourism To Review And Evaluate The Cost-benefit And Return On Investment Of A Possible Sponsorship Of A Michelin Guide For Restaurants Across The State.