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Wednesday, April 25, 2001



Hawaii State Seal


House and
Senate wrangle
over tips, wages

Both houses agree on
increasing minimum
wage, differ on size


By Lisa Asato
Star-Bulletin

While there appears to be broad support for increasing the minimum wage from both houses of the Legislature, the deal breaker may come in the form of a 30-year-old provision called the "tip credit."

Legislature Hawaii's 20-cent tip credit lets employers pay employees 20 cents less than the $5.25 minimum wage as long as their tips make up the difference by 50 cents or more. The credit has been unchanged since its inception in 1970 when the minimum wage was $1.60. Since then, legislators have increased the minimum wage nine times, most recently in 1993.

This week, as House and Senate conferees try to move a bill out of committee, they are mulling new minimum-wage numbers from the Labor Department to $6.05 an hour from $5.25 in January and to $6.30 in 2004 with increases over the next two years.

But the tip credit is another issue. The Senate abolished the tip credit altogether, while the House not only increased the credit but changed it to a percentage to keep it proportionate to future minimum-wage increases.

Meanwhile, the state Labor Department last week jumped in with its own proposal, suggesting a 30-cent tip credit (or increasing the 20-cent credit by half). However, in separate interviews yesterday, both House and Senate conference committee chairs said they wouldn't go for it for different reasons.

"Thirty cents is on the high end of what would be acceptable," said Senate Labor Chairman Bob Nakata (D, Kaneohe). Meanwhile, his counterpart in the House, Labor Chairwoman Terry Nui Yoshinaga, deemed it "too low." That's because it falls below the House's proposed tip credit of 8 percent, or 44 cents, said Yoshinaga (D, McCully).

Nakata said he'll be looking seriously at the Labor Department's minimum-wage numbers and try to "convince (members) that's the way to go." But he refused to commit to increases in the tip credit, and instead hinted at support in the Senate, saying, "The Senate passed a version that had no tip credit so that tells you something."

The bill approved by the Senate would raise the minimum wage to $5.75 on Jan. 1 and to $6.25 on Jan. 1 2004. The House bill would increase the minimum wage to $5.50 on July 1, 2002, and to $6.00 on July 1, 2003.



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