What You Need to Know About Hawaii’s Minimum Wage

Nothing in this article constitutes legal advice. Please consult a tax attorney or tax professional if you have questions about minimum wage compliance.

The Hawaii minimum wage increased on October 1, 2022, and will incrementally rise to $18.00 by 2028. It’s important to make sure you’re up to date on regulations to stay compliant. As a business owner, you need to be aware of potential changes so you can plan for the future.

To make sure you’re on top of the latest, here’s a rundown on the minimum wage requirements in the Aloha State.

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What is the minimum wage in Hawaii?

The current minimum wage in Hawaii is $12.00 per hour, which is $4.75 higher than the federal minimum wage of $7.25.

Tipped employees may be paid below the minimum wage as long as the combined pay from wages and tips is at least $7 more than the minimum wage. Beginning Oct. 1, 2022, tipped employees can be paid $1 below the minimum wage. That changes to $1.25 below the minimum wage in 2024 and $1.50 below in 2028.

Keep in mind that some counties, cities, and towns may have their own minimum wage laws. Be sure to check what local wage laws may apply to you.

Are there plans to change the minimum wage beyond 2023?

The Hawaii minimum wage will increase to $14 per hour on Jan. 1, 2024, $16 per hour in 2026 and $18 per hour in 2028.

How should small business owners prepare for changes to the minimum wage?

While there’s not an immediate plan for a Hawaii minimum wage increase, it’s smart to proactively prepare for potential changes. To ensure you’re ready, we suggest taking the following steps:

  • Reevaluate your budget: Review your monthly sales and overhead costs to determine if you need to cut costs. Based on your monthly cash flow, decide if you need to make adjustments to your staffing plan. If you have a seasonal business, for example, it may be more cost-effective to hire contract employees instead of full-time staff.

  • Make smart hires (and keep them): There’s no question the hiring process is expensive. To make sure you find the right employees the first time around, use best hiring practices and ask smart interview questions. Once you hire employees, focus on retention and engagement. By doing this, you’re more likely to keep them around, which saves time and money.

  • Upgrade your technology: Take advantage of available technology to save time and money. If you automate time-consuming tasks like payroll, you have more time to focus on your customers and growing your business. Square helps you easily learn how to do payroll yourself and how to avoid common payroll mistakes.

While these are helpful guidelines to follow, to make sure your business is prepared and stays in compliance, you should discuss Hawaii minimum wage laws with your accountant and lawyer.