Bill Text: HI SB2647 | 2010 | Regular Session | Introduced
Bill Title: Wage and Hour Law; Tip Credit
Spectrum: Partisan Bill (Democrat 5-0)
Status: (Introduced - Dead) 2010-01-27 - (S) Referred to LBR, WAM. [SB2647 Detail]
Download: Hawaii-2010-SB2647-Introduced.html
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THE SENATE |
S.B. NO. |
2647 |
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TWENTY-FIFTH LEGISLATURE, 2010 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO EMPLOYMENT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that divergent interests generally exist between employees and employers with regard to the treatment of tips received by tipped employees. Employees desire to retain all tips received, as employees provide the service from which tips are derived; employers seek to decrease wages provided to employees through a credit for tips received, as employers provide the employment through which tips are received. To achieve a balance between these two opposite interests, the legislature established a 25-cent tip credit amount (Act 36, Session Laws of Hawaii 1969, codified as section 378-2, Hawaii Revised Statutes). Act 36 also established a minimum wage amount of $1.60 per hour. However, since 1969, the tip credit amount has remained unchanged, while the minimum wage amount has increased many times over.
Under the current state tip credit law, an employer may reduce an employee's wages from the minimum wage of $7.25 per hour to $7 per hour, if the employee regularly receives more than $20 per month in tips and the combined amount the employee receives in tips and wages from the employer is at least 50 cents more than the minimum wage. This 25-cent tip credit amount is significantly less than the federal tip credit amount of $5.12 per hour, as well as the tip credit amount of all other states that allow tip credits. However, seven states and one United States territory do not allow tip credits at all.
The legislature further finds that the failure of Hawaii's tip credit amount to keep pace with the increased minimum wage amount hampers employers' ability to increase the wage rate of non-tipped employees who also contribute valuable services to the business. The balance between the competing interests of employers and employees must be adjusted to ensure that employers' interests and ability to do business are protected, employees are provided an appropriate living wage, and fundamental fairness exists among employees.
The purpose of this Act is to:
(1) Increase the tip credit amount; and
(2) Enable the tip credit amount to keep pace with future minimum wage increases by establishing a tip credit as a percentage of the minimum wage amount.
SECTION 2. Section 387-2, Hawaii Revised Statutes, is amended to read as follows:
"§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;
(2) $6.75 per hour beginning January 1, 2006; and
(3) $7.25 per hour beginning January 1, 2007.
[The] (b) Notwithstanding subsection
(a), the hourly wage of a tipped employee may be deemed to be increased on
account of tips if [the employee is paid not]:
(1) The
employee's employer pays the employees not less than [25 cents] per
cent below the applicable minimum wage [by the employee's employer];
and
(2) The
combined amount the employee receives [from the employee's employer]
under paragraph (1) and in tips is at least 50 cents more than the
applicable minimum wage."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act shall take effect upon its approval.
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INTRODUCED BY: |
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Report Title:
Wage and Hour Law; Tip Credit
Description:
Establishes a tip credit amount of not more than per cent below the applicable minimum wage amount.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
