The Hawaii minimum wage increased on January 1, 2024, and will progressively increase to $18.00 by 2028. Merchants must keep updated with these changes to maintain legal compliance. Understanding and preparing for these future wage adjustments is crucial for strategic planning and financial forecasting as a business owner.
Here is a detailed overview of Hawaii’s projected minimum wage adjustments to help you stay informed.
What Is the Minimum Wage in Hawaii?
As of 2024, the minimum wage in Hawaii is $14 per hour. This exceeds the federal minimum wage of $7.25 per hour, meaning employees in Hawaii must receive the higher state minimum wage. Previously, the minimum wage was $12 per hour, and it is scheduled to rise to $16 per hour on January 1, 2026, and then to $18 per hour on January 1, 2028.
Hawaii’s minimum wage law includes different exceptions. For instance, tipped employees can earn a lower base wage if their tips ensure their pay meets or exceeds the minimum wage. Furthermore, certain workers, like those under 18, may receive a different minimum wage, which will be covered later in this article.
If you’re working in Hawaii and suspect you’re not being paid the minimum wage, you can complain to the Hawaii Department of Labor and Industrial Relations.
Minimum Wage Rate Change Throughout the History
Hawaii introduced its first minimum wage law in 1942, establishing the rate at $0.30 per hour. Over the years, the state has adjusted the minimum wage more than 50 times, reaching the current rate of $14 per hour. Notably, recent legislative actions have aimed to incrementally increase the minimum wage to $18 per hour by 2028.
Below is a summary of significant increases in Hawaii’s minimum wage:
| Year | Minimum Wage |
| 1942 | $0.30 per hour |
| 1950 | $0.75 per hour |
| 1964 | $1.25 per hour (Oahu), $1 per hour (other islands) |
| 1970 | $1.60 per hour (statewide) |
| 1990 | $3.80 per hour |
| 2003 | $6.25 per hour |
| 2007 | $7.25 per hour (statewide) |
| 2015 | $7.75 per hour |
| 2016 | $8.50 per hour |
| 2017 | $9.25 per hour |
| 2018 | $10.10 per hour |
| 2022 | $12 per hour |
| 2023 | $12 per hour |
| 2024 | $14 per hour |
Several factors have driven these wage increases. The high cost of living in Hawaii, one of the most expensive states in the U.S., has been a significant influence, as residents face steep expenses for housing, food, and other basic needs.
Economic research also supports the benefits of a higher minimum wage, suggesting it can stimulate consumer spending and reduce poverty rates. These wage increases have received varying responses. While some businesses express concerns about potential job losses, many workers support the rise, seeing it as essential for meeting their financial needs.
What Are the Overtime Minimum Wage Requirements?
Employers must pay non-exempt workers overtime at 1.5 times their usual hourly wage for hours worked beyond 40 in a single workweek.
According to the Fair Labor Standards Act, the minimum salary for exemptions related to administrative, professional, and executive roles is $684 per week or $35,568 annually. Employees earning at least this amount may qualify for overtime depending on their specific job responsibilities.
Understanding the Tipped Minimum Wage Requirements
In Hawaii, the minimum wage for tipped employees is $12.75. Employers are allowed to use a tip credit of $1.25 per hour. However, this credit only applies if the employee’s combined income from wages and tips is at least $7 higher per hour than the standard minimum wage.
This arrangement requires a tipped employee’s total earnings, including tips and direct wages, to be at least $19.75 per hour.
Exceptions and Specific Circumstances in Hawaii Minimum Wage Regulations
In Hawaii, the general minimum wage is $14 per hour. However, employers must consider certain exceptions and specific circumstances.
- Federal Exclusions:
Due to federal laws, certain positions are exempt from Hawaii’s minimum wage. These typically include executive, administrative, or professional responsibilities, such as managers, computer professionals, and outside sales representatives.
- State Exclusions:
Hawaii also exempts certain groups from its minimum wage standards, including:
- Full-time students working part-time for on-campus employers.
- Volunteers at non-profit organizations.
- State government employees are subject to separate wage standards.
- Individuals with disabilities participate in designated sheltered workshops or vocational programs.
- Sector-Specific Rules:
Different regulations may apply to workers in certain industries. For instance, agricultural workers are subject to a minimum wage of $10.50 per hour. Wages for apprentices and trainees in recognized programs may also be reduced during training.
- Computer-related Positions:
Certain computer-related roles, such as programmers and systems analysts, are exempt from minimum wage regulations if their responsibilities and pay satisfy specific criteria.
- Additional Exemptions:
Other workers exempt from the minimum wage include those in fishing, seasonal youth camps, golf caddies, and car salespersons, depending on specific job-related conditions.
Tips for Businesses to Comply with Changing Minimum Wage Requirements
As minimum wage requirements evolve, it is essential to plan effectively. Here are some practical steps to help manage these changes:
- Update Employee Salaries: Identify employees earning less than the new minimum wage and adjust their salaries to meet or surpass this new rate. This adjustment is crucial for compliance and to ensure fair pay.
- Address Wage Compression: Analyze the pay rates for various positions within your company. Adjust salaries strategically to maintain pay differentials and recognize employees’ contributions based on their experience, tenure, and performance. Consider using this opportunity to offer greater salary increases to high-performing employees and those in key positions that are difficult to fill, which can help with retention.
- Inform Your Employees: Clear communication is essential during transitions. Inform your employees about the new pay rates well before they take effect, ideally one pay period ahead. Use written notices or public announcements to ensure everyone is informed, helping to build trust and maintain transparency.
- Promote Professional Development: Beyond salary adjustments, enhance your employees’ career development opportunities. Offer training that allows employees to take on more responsibilities aligned with their career goals. For example, if an employee takes on 25% more responsibilities in a role that suits their aspirations and receives a 10% pay increase, it benefits both the employee and your organization.
By implementing these steps, you can smoothly adapt to minimum wage changes and position your business for continued success. Planning ahead is vital for managing such changes effectively. This is also an opportunity to invest in your workforce and support your company’s growth.
Conclusion
As Hawaii’s minimum wage rises, reaching $18 per hour by 2028, businesses and employees must stay informed and prepared. The incremental increases from $14 in 2024 to $16 in 2026 and eventually to $18 reflect the state’s effort to address the high cost of living and support workers’ financial needs. For employers, this means careful planning and adjustments to ensure compliance with the new rates.
This includes revising pay scales, communicating changes clearly to employees, and addressing wage compression issues. By proactively managing these adjustments, businesses can maintain compliance, support their workforce, and contribute to long-term success. Staying ahead of these changes will help avoid legal issues and foster a more motivated and satisfied workforce.
Recommended: Minimum Wage in Different States
Frequently Asked Questions
What will the minimum wage be in Hawaii from 2024 onwards, and how does it compare to the federal minimum wage?
Starting January 1, 2024, Hawaii’s minimum is $14.00 per hour, much higher than the federal minimum wage of $7.25 per hour. Planned increases will raise the wage to $16.00 in 2026 and $18.00 in 2028.
How does the tipped minimum wage work in Hawaii starting in 2024?
In 2024, tipped employees in Hawaii can be paid $1.25 less than the standard minimum wage as long as their tips bring total earnings to at least $7.00 more per hour than the minimum wage. This tip credit will increase to $1.50 in 2028.
Are there any exemptions to the minimum wage laws in Hawaii?
Certain employees, such as those in computer-related jobs and outside salespeople, may be exempt if they meet specific criteria. Hawaii does not permit subminimum wages for trainees, apprentices, or workers with disabilities.
What are employers’ obligations regarding the implementation of these wage increases?
Employers must adjust their payroll systems to the new wage rates and update labor law posters to inform employees of their rights. This ensures compliance and transparency in the workplace.
