Hawaii Becomes the First State to Increase the Minimum Wage to $18 Per Hour

On June 22, 2022, Hawaii’s Governor, David Ige, signed a bill into law that will gradually increase the state’s minimum wage from the current rate of $10.10 to $18 per hour by January 1, 2028.  The bill, HB 2510, is the nation’s first minimum wage law that will provide workers with a minimum wage of $18 per hour.  Employers in Hawaii must pay all employee’s hourly rates according to the following schedule:

•    Through September 30, 2022 - $10.10 per hour;
•    Beginning October 1, 2022 - $12.00 per hour; 
•    Beginning January 1, 2024 - $14.00 per hour; 
•    Beginning January 1, 2026 - $16.00 per hour; and
•    Beginning January 1, 2028 - $18.00 per hour. 

Employees in the hospitality industry who earn tips may receive a reduced hourly wage provided they earn a tip credit that reaches the minimum wage threshold.  Currently, Hawaii’s tip credit is 75 cents, so employers in the state can pay hospitality industry workers a minimum wage of $9.35 per hour so long as they complement this with a 75-cent tip credit to reach the current minimum wage of $10.10 per hour.  The bill will incrementally increase Hawaii’s current tip credit of 75 cents to $1.50 by January 1, 2028. 

While Hawaii has become the first state to enact an $18 minimum wage, given the state’s six-year timeline for doing so, several other states may also increase their minimum wage to $18 per hour by 2028, if not sooner.  For example, California is expected to increase its minimum wage to $15.50 next year and the state intends to put an initiative on a proposed ballot for voters’ approval to increase the minimum wage to $18 per hour by 2025.

Other states, such as Washington state, automatically increase their minimum wage rates on an annual basis in concert with increases in inflation.  For example, Washington state’s minimum wage is predicted to surpass $15 per hour in 2023 and is on track to outpace $18 per hour by 2028 based on adjustments in inflation.  Lawmakers in New York have also contemplated increasing the state’s minimum wage (which varies by region, but currently sits at $15 per hour in New York City) based on adjustments in inflation, which could increase the state’s minimum wage to $20 per hour in a few years. 

Workers who believe their employer is improperly denying them minimum wages, or subjecting them to other workplace violations, should seek legal counsel to analyze their potential claims.