STAND. COM. REP. NO.1101

Honolulu, Hawaii

, 2001

RE: S.B. No. 1144

S.D. 2

H.D. 1

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Labor and Public Employment, to which was referred S.B. No. 1144, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO MINIMUM WAGE,"

begs leave to report as follows:

The purpose of this bill is to:

(1) Increase Hawaii's $5.25 per hour minimum wage to $5.75 per hour beginning January 1, 2002, and $6.25 per hour beginning January 1, 2004; and

(2) Remove the tip credit provisions of the minimum wage law, which allow employers to pay tipped workers less than the minimum wage.

Testimony in support of this measure was received from the Department of Human Services, Department of Labor and Industrial Relations, Hawaii State AFL-CIO, ILWU Local 142, Hawaii State Teachers Association, Hawaii Catholic Conference, American Friends Service Committee, and several concerned individuals.

The Hawaii Restaurant Association provided comments.

Testimony in opposition to the bill was submitted by the National Federation of Independent Business and Chamber of Commerce of Hawaii.

Your Committee finds that it is time to raise Hawaii's minimum wage. The minimum wage was last increased in 1993 and its value has been eroded over the years due to inflation. Adjusted for inflation, the wage would be worth only $4.70 per hour in 2001. Federal welfare reform has given those on welfare incentive to work, and an increase in the minimum wage is needed to help these workers survive.

Your Committee understands that increases in the minimum wage burdens businesses, especially small businesses employing minimum wage workers. Your Committee finds that placing too great a burden on these businesses will defeat the purpose of this measure by eliminating the business and the minimum wage jobs that the business supports.

Upon further consideration, your Committee has amended this measure to provide a workable balance between the interests of business and workers. As amended, this bill increases the minimum wage to $5.50 per hour in 2002, and $6.00 per hour, beginning July 1, 2003.

Your Committee has also amended the bill to retain and amend the tip credit to 10 percent below the applicable minimum wage. This will provide flexibility in the law for entry level jobs that have the potential to provide income at levels higher than the minimum wage.

As affirmed by the record of votes of the members of your Committee on Labor and Public Employment that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1144, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1144, S.D. 2, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Labor and Public Employment,

____________________________

TERRY NUI YOSHINAGA, Chair