STAND. COM. REP. NO. 562

Honolulu, Hawaii

, 2005

RE: H.B. No. 1134

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Labor & Public Employment, to which was referred H.B. No. 1134 entitled:

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

begs leave to report as follows:

The purpose of this bill is to assist Hawaii's workers by:

(1) Increasing the minimum wage from $6.25 per hour to $7.00 per hour beginning July 1, 2005;

(2) Providing for annual increases in the minimum wage by using the percent increase of the most recent gross state product deflator published by the Department of Business, Economic Development, and Tourism; and

(3) Eliminating the provision of a "tip credit" which allows an employer to reduce the wages of tipped employees if a tipped employee is not paid less than $.25 below the minimum wage, and the employee's tips and wages account for earnings of $.50 more than the minimum wage established by law.

 

The Hawaii State AFL-CIO, Hawaii State Teachers Association, Hawaii Government Employees Association, ILWU Local 142, and a concerned individual testified in support of this measure. The Hawaii Business League, National Federation of Independent Business/Hawaii, The Chamber of Commerce of Hawaii, Retail Merchants of Hawaii, Hawaii Restaurant Association, Tiki's Grill & Bar, LWD, Inc., Gyotaku Japanese Restaurant, and several concerned individuals opposed this measure. The Department of Labor and Industrial Relations commented on this measure.

The concept of the minimum wage was established to allow working Americans the benefits of earning decent wages and living comfortable lives. Over the years, however, inflation and increases in the cost of living have outpaced increases in the minimum wage. This has forced many people, especially those living in Hawaii, to work two or more jobs just to make ends meet. This, in turn, has had a detrimental effect on the family unit as more and more parents find it necessary to work, making it more difficult to spend time with their families.

However, your Committee understands the concerns raised by various businesses that an increase in the minimum wage impacts their ability to significantly increase their employment roles and that an uncapped escalator provision may result in large increases in the minimum wage during periods of economic uncertainty. Moreover, businesses expressed concerns that the time frame of the escalator provision established by this measure would hinder their ability to estimate their annual budgets.

Your Committee notes that in oral testimony, many testifiers stated that increases in minimum wage without increasing the tip credit would result in the inability of restaurant owners to increase the wages of individuals working in the "back" of restaurants, including cooks and dishwashers. Furthermore, concerns were raised that increases in the minimum wage would hamper the ability of various businesses providing employment to minors seeking their first job from hiring these individuals.

Taking all of these factors into consideration, your Committee has amended this measure by:

(1) Amending the timeframe from January 1 to April 1, in which the annual minimum wage increase will become effective;

(2) Providing for a cap of $.50 on the annual increase in the minimum wage and for no decrease of the minimum wage;

(3) Re-inserting language allowing for a "tip credit" and increasing the "tip credit" to $1.00;

(4) Inserting a provision that allows for an employer who employs an employee under the age of 18 to pay a minimum wage that is 85 percent of the established minimum wage provided that this wage is not below the federal minimum wage; and

(5) Making technical, nonsubstantive amendments for clarity, consistency, and style.

As affirmed by the record of votes of the members of your Committee on Labor & Public Employment that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1134, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1134, H.D. 1, and be referred to the Committee on Finance.

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

 

____________________________

KIRK CALDWELL, Chair