RELATING TO TRANSPARENCY.

SB3020

THE SENATE

S.B. NO.

3020

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO TRANSPARENCY
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

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SECTION 1.
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The
legislature finds that many employees at food, beverage, and service establishments
increasingly rely on tips paid by customers to earn a reasonable wage.

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The
legislature finds, however, that a 2022 United States Department of Labor
investigation discovered that employers in the State were illegally stealing
tips that their employees had earned, resulting in the employers being required
to pay $117,710 in back wages and liquidated damages for seventy workers.
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Another illegal tip theft investigation at a
local cafe resulted in fourteen workers recovering a combined $72,000 in back
wages and $79,000 in damages.

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The
Hawaii Worker Rights Center estimates that for each illegal case of tip theft
discovered, countless others are likely undetected, depriving local workers of
their earnings.
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Tip theft is often
difficult to identify because tips are frequently split by employers among
front and back of house employees without disclosing to customers or employees
how the tips are actually allocated.

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The
legislature also finds that a simple and effective solution to prevent tip
theft by employers is to inform tipping customers and workers receiving tips
that it is illegal for employers to retain tips and clarify who to contact
regarding suspected violations.

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Accordingly,
the purpose of this Act is to require a clear and accessible notice of tip
allocation in food, beverage, and service establishments.

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SECTION 2.
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Chapter 388, Hawaii Revised Statutes, is amended by adding a new section
to be appropriately designated and to read as follows:

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388-
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Tip
allocation transparency; disclosure.
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(a)
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In addition to the notification requirements
provided in section 388‑7, each food, beverage, and service establishment
that accepts tips and employs an employee subject to title 29 Code of Federal
Regulations section 531.50 et seq. or a tipped employee as defined in section
387-1, shall post:

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(1)
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A
reasonably noticeable and easily readable sign with a simple and understandable
explanation of how tips are allocated, which employee positions receive tips,
and the percentages or proportions of tips allocated to each position at
physical locations of the establishment's business, including brick and mortar
premises, mobile vehicle, or other temporary sites of business; at each point
of customer check-in, check‑out, and final transaction; or an otherwise
publicly visible location where customers are reasonably expected to pay for
their purchase or service received.
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The sign
posted pursuant to this paragraph shall include one of the following statements
or a substantially similar statement:

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(A)
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"Tips
are kept entirely by each employee to whom they are left or given";

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(B)
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"Tips
are aggregated and divided equally among all employees legally allowed to
receive tips from tip pools"; or

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(C)
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"Tips
are aggregated and allocated as follows:
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one third is divided among all drivers; one
third is divided among all servers; and one third is divided among all the
kitchen staff"; and

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(2)
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A
reasonably noticeable and easily readable sign with:

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(A)
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The
same text in the sign posted pursuant to paragraph (1); and

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(B)
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The
following statement or a substantially similar statement:

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"Federal
and State laws require ALL tips received by this establishment to be directly
distributed to employees.
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For questions
or to report violations, contact the Wage and Hour Division of the U.S.
Department of Labor at 1‑866-487-9243, or the Wage Standards Division of
the Hawaii Department of Labor and Industrial Relations at:

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(i)
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808-586-8777 for the city and county
of Honolulu;

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(ii)
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808-274-3351 for the county of
Kauai;

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(iii)
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808-984-2076 or 808-984-2075 for the
county of Maui; and

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(iv)
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808-974-6464 or 808-322-4808 for the
county of Hawaii.",

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in
each physical location where other legally required notices for employees are
posted.

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(b)
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The department of labor and industrial
relations may adopt rules pursuant to chapter 91 to establish fines for any
food, beverage, and service establishment in
violation of this section
.
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SECTION 3.
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This Act does not affect rights and duties that matured, penalties that
were incurred, and proceedings that were begun before its effective date.

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SECTION 4.
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New statutory material is underscored.

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SECTION 5.
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This Act shall take effect on July 1, 2026.

INTRODUCED BY:

_____________________________

Report Title:

DLIR;
Food, Beverage, and Service Establishments; Transparency; Tips; Allocation;
Disclosure; Penalties

Description:

Requires
food, beverage, and service establishments that accept tips and employ tipped
employees to post signs that include certain language explaining their tip
allocation practices and the contact information for the Wage Standards
Division of the Department of Labor and Industrial Relations and the Wage and
Hours Division of the United States Department of Labor.
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Allows DLIR to adopt rules to establish fines.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.