RELATING TO THE MINIMUM WAGE.

SB3235

THE SENATE

S.B. NO.

3235

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to the minimum wage
.

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

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SECTION
1.
�
The legislature finds that one job
should be enough to meet a person's basic needs.
�
According to the department of business,
economic development, and tourism, a single adult requires an income of $62,234
to achieve self-sufficiency in Hawaii, while a single parent with one child
requires an income of $107,682.
�
Yet, at
the current statewide minimum wage rate of $16.00 per hour, a full-time minimum
wage employee earns only $33,280 annually.
�
Moreover, as of 2025, the National Low Income
Housing Coalition estimates that a minimum wage worker would have to work one
hundred seven hours per week to afford a one-bedroom rental home at local fair
market rent.

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The legislature further finds that
increasing the State's minimum wage will help Hawaii's economy by giving
low-wage workers greater purchasing power.
�
According to the department of labor and
industrial relations, in 2018, following four consecutive years of minimum wage
increases, the state unemployment level reached an all-time low of two per
cent, demonstrating that increasing the minimum wage rate does not adversely
impact statewide employment.

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The legislature additionally finds that
research shows minimum wage increases have not harmed small businesses.
�
A 2023 University of California, Berkely study
found that small businesses generally do not cut jobs after minimum wage hikes,
but instead benefit from lower worker turnover and easier hiring.
�
Economists have also found that the employment
effects of raising the minimum wage were outpaced by wage gains, indicating that
higher minimum wages strengthen workers' incomes without broadly undermining small
business viability.

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Accordingly, the purpose of this Act is to
uplift the financial well-being of working families in Hawaii by:

����
(1)
�
Amending the minimum monthly guaranteed compensation an
individual must earn to be exempt from certain wage and hour requirements
;

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(2)
�
Requiring
the minimum wage to increase to $18.00 per hour beginning January 1, 2027,
instead of January 1, 2028;

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(3)
�
Increasing
the minimum wage on January 1 of 2028, 2029, and 2030;

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(4)
�
Prohibiting
tipped employees from being paid less than the minimum wage; and

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(5)
�
Beginning on September 30, 2030, and on September 30 of
each year thereafter, requiring the department of labor and industrial
relations to calculate an adjusted minimum wage rate
.

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SECTION
2
.
�
Section 387-1, Hawaii Revised Statutes, is
amended by amending the definition of "employee" to read as follows:

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"
"Employee"
includes any individual employed by an employer, but shall not include any
individual employed:

����
(1)
�
At a guaranteed compensation totaling [
$4,000
]

$
or more a
month, whether paid weekly, biweekly, or monthly;

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(2)
�
In agriculture for any workweek in which the
employer of the individual employs less than twenty employees or in agriculture
for any workweek in which the individual is engaged in coffee harvesting;

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(3)
�
In or about the home of the individual's
employer:

���������
(A)
�
In domestic service on a casual basis; or

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(B)
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Providing companionship services for the aged
or infirm;

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(4)
�
As a house parent in or about any home or
shelter maintained for child welfare purposes by a charitable organization
exempt from income tax under section 501 of the federal Internal Revenue Code;

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(5)
�
By the individual's sibling, sibling-in-law,
child, spouse, parent, or parent-in-law;

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(6)
�
In a bona fide executive, administrative,
supervisory, or professional capacity or in the capacity of outside salesperson
or as an outside collector;

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(7)
�
In the propagating, catching, taking,
harvesting, cultivating, or farming of any kind of fish, shellfish, crustacean,
sponge, seaweed, or other aquatic forms of animal or vegetable life, including
the going to and returning from work and the loading and unloading of those
products before first processing;

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(8)
�
On a ship or vessel and who has a Merchant
Mariners Document issued by the United States Coast Guard;

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(9)
�
As a driver of a vehicle carrying passengers
for hire operated solely on call from a fixed stand;

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(10)
�
As a golf caddy;

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(11)
�
By
a nonprofit school during the time that the individual is a student attending
the school;

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(12)
�
In any capacity if by reason of the employee's
employment, in that capacity and during the term thereof, the minimum wage that
may be paid to the employee or maximum hours that the employee may work during
any workweek without the payment of overtime, are prescribed by the federal
Fair Labor Standards Act of 1938, as amended, or as the same may be further
amended from time to time; provided that if the minimum wage that may be paid
to the employee under the Fair Labor Standards Act for any workweek is less
than the minimum wage prescribed by section 387-2, then section 387-2 shall
apply in respect to the employee for that workweek; provided further that if
the maximum workweek established for the employee under the Fair Labor
Standards Act for the purposes of overtime compensation is higher than the
maximum workweek established under section 387-3, then section 387-3 shall
apply in respect to the employee for that workweek; except that the employee's
regular rate in that event shall be the employee's regular rate as determined
under the Fair Labor Standards Act;

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(13)
�
As a seasonal youth camp staff member in a
resident situation in a youth camp sponsored by charitable, religious, or
nonprofit organizations exempt from income tax under section 501 of the federal
Internal Revenue Code or in a youth camp accredited by the American Camping
Association; or

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(14)
�
As an automobile salesperson primarily engaged
in the selling of automobiles or trucks if employed by an automobile or truck
dealer licensed under chapter 437."

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SECTION
3
.
�
Section 387-2, Hawaii Revised Statutes, is
amended to read as follows:

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"
�387-2
�

Minimum wages.
�
(a)
�
Except as provided in section 387-9 and this
section, every employer shall pay to each employee employed by the employer,
wages at the rate of not less than:

����
(1)
�
$6.25 per hour
beginning January 1, 2003;

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(2)
�
$6.75 per hour
beginning January 1, 2006;

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(3)
�
$7.25 per hour
beginning January 1, 2007;

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(4)
�
$7.75 per hour
beginning January 1, 2015;

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(5)
�
$8.50 per hour
beginning January 1, 2016;

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(6)
�
$9.25 per hour beginning
January 1, 2017;

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(7)
�
$10.10
per hour beginning January 1, 2018;

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(8)
�
$12.00 per hour
beginning October 1, 2022;

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(9)
�
$14.00 per hour
beginning January 1, 2024;

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(10)
�
$16.00 per hour
beginning January 1, 2026; [
and
]

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(11)
�
$18.00 per hour
beginning January 1, [
2028.
]
2027;

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(12)
�
$20.00 per hour beginning January 1, 2028;

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(13)
�
$22.00 per hour beginning January 1, 2029;
and

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(14)
�
$24.00 per hour beginning January 1, 2030.

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(b)
�
[
The
hourly wage of a tipped employee may be deemed to be increased on account of
tips if the employee is paid no less than:

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(1)
�
25 cents;

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(2)
�
50 cents per
hour beginning January 1, 2015;

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(3)
�
75 cents per
hour beginning January 1, 2016;

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(4)
�
$1.00 per hour
beginning October 1, 2022;

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(5)
�
$1.25 per hour
beginning January 1, 2024; and

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(6)
�
$1.50 per hour
beginning January 1, 2028,

below the applicable minimum wage by the
employee's employer and the combined amount the employee receives from the
employee's employer and in tips is at least 50 cents more than the applicable
minimum wage; provided that beginning January 1, 2015, the combined amount the
employee receives from the employee's employer and in tips is at least $7.00
more than the applicable minimum wage.
]
On September 30, 2030, and on
September 30 of each year thereafter, the department shall calculate an
adjusted minimum wage rate to replace the minimum wage rate established under
subsection (a).
�
The adjusted minimum
wage rate shall be calculated to the nearest twenty-five cents using the
highest calculation produced by adjusting the minimum wage rate according to an
annual gross domestic product per capita calculation for the State to be
determined by the department of business, economic development, and tourism, or
using the United States Bureau of Labor Statistics' consumer price index for
urban Hawaii, or a successor index, for the twelve months prior to September 1
of each year as calculated by the United States Department of Labor; provided
that if in any year the adjustments based on the gross domestic product per
capita calculation would result in a lower minimum wage rate, the adjusted
minimum wage rate shall remain the same as the minimum wage rate in effect for
the year in which it is calculated.
"

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SECTION 4.
�
Statutory material to be repealed is
bracketed and stricken.
�
New statutory
material is underscored.

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SECTION 5.
�
This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

Report Title:

Minimum
Wage; Increase; Tipped Employees; Department of Labor and Industrial Relations

Description:

Amends the
minimum monthly guaranteed compensation an individual must earn to be exempt
from certain wage and hour requirements.
�

Requires the minimum wage to increase to $18.00 per hour beginning 1/1/2027,
instead of 1/1/2028.
�
Increases the
minimum wage on 1/1/2028, 1/1/2029, and 1/1/2030.
�
Prohibits tipped employees from being paid
less than the minimum wage.
�

Beginning on 9/30/2030,
and on September 30 of each year thereafter, requires the Department of Labor
and Industrial Relations to calculate an adjusted minimum wage rate.

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