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At a crucial point in the legislative session, efforts to raise the minimum wage hang on two bills. Both resemble the governor's proposal of incremental increases reaching $6.20 an hour in 2003. Minimum-wage bills
ready for floor voteBy Lisa Asato
Star-BulletinOther proposals to increase the tip credit, which benefits employers of tipped employees, have been halted. But Pat McCain, president of the Hawaii Restaurant Association, said: "The game's not over yet."
The Senate Ways and Means Committee has approved a public-contracts bill that would mandate a minimum wage of $9.43 an hour for contract workers.
The minimum-wage and contract-workers measures are up for floor votes tomorrow. Thursday is the last day for the House and Senate to swap bills.
The House Finance Committee proposal would hike the minimum wage to $5.50 from $5.25 on July 1, 2002, and to $6 next year.
The Senate Ways and Means Committee proposal would set up two 50-cent hikes, the first on Jan. 1, 2002 -- to $5.75 -- and the second on Jan. 1, 2004 -- to $6.25.
Ways and Means Chairman Brian Taniguchi (D, Manoa-McCully) said the committee removed a provision tying adjustments to the consumer price index because "(small business) felt the CPI was really hard because they didn't know when it was going to go up."
Businesses say raising the minimum wage eliminates jobs and causes inflation. Labor unions and social service groups say it benefits the neediest workers.
Senate Labor Chairman Bob Nakata (D, Kaneohe-Kahuku) said lobbying by both sides has been less vocal than last year because the economy is better and there's not as strong a push against it.
Efforts to raise the minimum wage last year died in conference committee. At the time, Gov. Ben Cayetano called it the "biggest disappointment" of the session.
Last week he stressed the need for a minimum-wage increase to take care of families who will lose welfare benefits in December.
The governor said all he can do is urge lawmakers to pass the bill, "and I'm confident they will."
The first half of the session has seen various proposals to increase the tip credit rejected. But McCain of the restaurant association said he will continue arguing for balancing a minimum-wage hike with a larger tip credit.
Hawaii's 20-cent tip credit lets employers pay workers 20 cents less than the minimum wage as long as they earn $20 a month in tips and their wages and tips exceed the minimum by 50 cents.
By comparison, the federal tip credit allows employers to pay $2.58 -- half the minimum wage of $5.15 -- as long as tips make up the difference.
Even though the governor's bill had proposed increasing the credit to 30 cents, or 5.7 percent of the minimum wage, it is still a good sign, said Thomas Jones, who manages two Kyotaru Hawaii Inc. restaurants that employ about 125 workers. The association had requested a 25-percent tip credit.
A 50-cent increase in the minimum wage -- without a corresponding increase in the tip credit -- would result in "one of my restaurants (having) to pay $14,000 a year in wages to servers. That would significantly reduce my ability to give pay increases to all my other staff," he said.
Nakata said the credit penalizes people who work hard for tips. "The tip credit as it stands now is one set of employees subsidizing another set of employees."
A bill approved by the Senate money committee would require government contractors to pay employees a minimum wage of $9.43.
House Labor Chairwoman Terry Nui Yoshinaga (D, McCully-Moiliili) had earlier killed a similar bill, which described the $9.43 as a "living wage" needed to support a family of four above the federal poverty level. But she said she would consider the Senate-passed bill, although she questions whether the cost would be passed on to the government.
Cayetano said he was "very concerned" about the lack of flexibility under such a law. He said he has the power now to issue executive orders requiring a minimum wage for contractors' workers.
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