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The minimum wage in Hawaii is among the highest in the nation, reflecting the state’s high cost of living. If you’re wondering what Hawaii’s current minimum wage rate is, whether there are exceptions for certain workers or businesses, and how it compares to other states, read on for a detailed breakdown.
If you’re short on time, here’s a quick answer: The current state minimum wage in Hawaii is $12 per hour as of January 1, 2022.
Current Minimum Wage in Hawaii
State Minimum Wage Rate
As of January 1, 2023, the minimum wage in Hawaii is set at $12.00 per hour. This applies to all employees, whether part-time, full-time, or temporary. Hawaii has one of the highest state minimum wages in the United States.
The current minimum wage is the result of gradual increases over the past few years. Back in 2018, Hawaii legislators passed a bill that incrementally raised the wage to its current rate. Supporters argued that the raises were necessary to keep up with Hawaii’s high cost of living.
According to the U.S. Bureau of Labor Statistics, Hawaii had approximately 650,000 workers as of 2022. This means the latest minimum wage hike impacted a significant number of low-wage employees across the state.
Exceptions to the Minimum Wage
While most hourly employees are subject to Hawaii’s minimum wage, there are a few exceptions:
- Tipped employees – Employers can pay tipped staff a lower base wage of $9.50 per hour, as long as employees earn enough in tips to make up the difference between the base and standard minimum wage. If not, employers must cover the difference.
- Disabled workers – The state allows certain employers, like sheltered workshops, to pay less than minimum wage to workers with disabilities. However, there are strict eligibility requirements monitored by the Department of Labor and Industrial Relations.
- Independent contractors and consultants – Independent contractors set their own rates and are not subject to Hawaii’s minimum wage laws. However, employers cannot misclassify employees as contractors specifically to avoid paying minimum wage.
Outside of these exceptions, all employees in Hawaii must earn at least $12 per hour for 2023. The Hawaii Department of Labor provides more details on minimum wage laws and regulations.
History of Minimum Wage Changes in Hawaii
Key Minimum Wage Increases
Hawaii’s minimum wage has seen several notable increases over the years. In 2007, the state legislature passed a bill raising the minimum wage from $6.75 per hour to $7.25 per hour, an increase of around 7%. This aligned Hawaii with the federal minimum wage at the time.
A more substantial increase came in 2014, when the minimum wage climbed from $7.25 per hour to $10.10 per hour by 2018. This represented a whopping 39% increase over 4 years! The bill was signed into law by then-Governor Neil Abercrombie, who said it would help many Hawaii residents “earn a decent living.”
Fast forward to 2022, and Governor David Ige signed legislation raising the minimum wage to $18 per hour by 2028, one of the highest statewide minimums in the country. The first phase began on October 1, 2022, with an increase from $10.10 to $12 per hour.
Future Planned Increases
Under the 2022 minimum wage bill, further gradual increases are scheduled annually through 2028:
- January 1, 2024: $14 per hour
- January 1, 2026: $16 per hour
- January 1, 2028: $18 per hour (ceiling reached)
These incremental increases aim to ease the transition for Hawaii businesses while improving resident’s economic stability. Once the $18 per hour rate takes full effect in 2028, a full-time minimum wage worker will earn around $37,440 per year, before taxes.
The bill faced some opposition from business groups like the Hawaii Chamber of Commerce and Hawaii Food Industry Association. They argued the rising labor costs could lead to reduced hours and job losses.
However, proponents said the boost helps offset Hawaii’s high cost of living, especially with inflation rising nationwide.
How Hawaii Compares to Other States
When it comes to minimum wage, Hawaii is ahead of the curve compared to most other states. As of 2023, Hawaii’s minimum wage is $12 per hour, which is among the highest in the nation.
Only a handful of other states currently have a minimum wage rate above $12 per hour. These include:
- California – $15.50 per hour
- Washington – $15.74 per hour
- Massachusetts – $15 per hour (for large employers)
Additionally, the District of Columbia has a $16.10 minimum wage, giving it the highest rate in the country. On the other end of the spectrum, 21 states still use the federal minimum wage of $7.25 per hour. Another 4 states have minimum wages below $10 per hour.
Future Increases
While Hawaii’s current minimum wage is already comparatively high, it is set to increase even further in coming years:
| Year | Hawaii Minimum Wage |
|---|---|
| 2024 | $13 per hour |
| 2026 | $14 per hour |
| 2028 | $15 per hour |
By 2028, Hawaii’s $15 per hour minimum wage will match rates in current leading states California and Massachusetts. This indicates Hawaii’s long-term commitment to supporting higher wages for low income workers.
Supporting Hawaii’s High Cost of Living
Hawaii’s higher minimum wage accounts for its exceptionally high cost of living, especially for housing. Hawaii has the highest median home prices in the nation, with costs over 3 times higher than the mainland US median.
With steep housing expenses, Hawaii residents need higher incomes just to get by. By gradually increasing the minimum wage, Hawaii aims to help lower wage workers afford the state’s high rents and home prices.
Ultimately, Hawaii strikes an admirable balance between supporting small businesses and helping workers manage the state’s high living costs. The phased wage increases give companies time to adjust while still lifting minimum wage salaries toward a living wage over time.
Conclusion
As one of the most expensive places to live in the U.S., Hawaii aims to provide a minimum wage that helps workers afford the high costs they face. Understanding the current minimum wage rate, historical changes, and how Hawaii compares nationally gives insight into efforts to ensure a decent standard of living in the state.
