SB 2784 (Tip Credit) is Deferred


Due to the overwhelming support, testimony, and participation of our HRA members and industry advocates, SB 2784 has been deferred! There were 128 total testimonies submitted on this measure, 96 were in support of the bill, 32 were opposed of which 15 were HRA members, and three of our members provided oral testimony.

This is a BIG WIN for HRA members and the entire food service industry.

Thank you to Tom Jones, Victor Lim and Russell Ryan for providing compelling oral testimony.

Thank you to HRA’s Government Relations Committee for diligently monitoring the progress of the bill.

Read HRA’s testimony on SB 2784 – Relating to Tipped Employees:

The Hawai’i Restaurant Association represents over 4,000 restaurant and food service establishments which employ over 79,000 workers (13% of the state-wide employment), a great many whose employees receive tips in addition to the wages paid by their employers.

The Minimum Wage in Hawai’i just increased by its largest amount in history at $2 per hour, $1.25 for tipped credit wage employees. Tipped employee are well protected by the current Minimum Wage law which ensures that employees paid the tip credit wage earn at least $7 per hour over the prevailing minimum wage, which results in at least $21/hr in combined wages and tips. Most tipped employees in restaurants earn well over $8.25 in tips per hour, many earn 2 to 4 times that amount.

Since servers’ tips are based on their sales, their tip income increases when menu prices increase, keeping pace with inflation.

Mandating Minimum Wage increases to Tipped Employees hinders the employers ability to pay non-tipped employees higher discretionary wages.

In the current economy, restaurants more than other businesses are disproportionately affected by the increase in wages, the cost of ingredients, supplies, take-out packaging, property taxes, property insurance, water & sewer service, employee health insurance, and unemployment insurance premiums.

Eliminating the Tip Credit will be a challenge that many of Hawai’i’s restaurants will not be able to bear. We strongly urge the committee to defer this bill.


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