Even as a Senate bill that would raise the state’s minimum wage to $18 an hour, state officials are throwing their support behind a competing but similar bill in the House.
Like Senate Bill 2018, which passed third reading in the Senate last week, Bill 2510 would gradually increase the minimum hourly wage until it eventually reaches $18 an hour.
The two bills differ, however, in their time scale. SB 2018 would raise the minimum wage in three increments, from the current $10.10 to $12 an hour on October 1, $15 an hour on January 1, 2024, and $18 on January 1, 2026.
By comparison, HB 2510 would start by raising the minimum wage to $11 an hour starting Jan. 1, 2023, and then by $1 each year until it reaches $18 an hour in 2030.
“I have contacted some of our small businesses in Puna, and they are in favor of increasing the minimum wage to $12, $13 an hour,” said Puna representative Greggor Ilagan, co-introducer Bill. “But I’m concerned about rural businesses that may not be able to handle a large increase like what’s in the Senate bill.”
The house measure also addresses the state tip credit. Today, a tipped employee can be paid by their employer $0.75 less than minimum wage if and only if the employee receives at least $7 more than minimum wage from wages and tips combined . Under HB 2510, employers could pay workers $2.75 less than minimum wage in 2030, as long as the worker still earns $7 more than minimum wage in total.
But beyond minimum wage, HB 2510 also has a host of additional clauses that would benefit low-income families statewide by providing tax credits and other resources.
“This bill is part of the House majority package,” said Hilo Rep. Richard Onishi, co-introducer of the bill. “The Senate bill only deals with the minimum wage issue, but ours is about low-wage families, what we call ALICE families.”
ALICE families — an acronym standing for Asset Limited, Income Constrained, Employed — made up nearly half of all Hawaiian households before the pandemic, but made up 60% or more of households in 2022, Onishi said.
Additional assistance provided by HB 2510 includes new or increased tax credits for residents. Under the bill, the earned income tax credit would become refundable, instead of simply being used as a credit against future taxes payable.
“If you owe $100 in taxes and you have a $1,000 non-refundable tax credit, you don’t get anything back,” Ilagan explained. “But if it’s a refundable credit, then the credit covers your tax liability and you get the rest of the $900.”
The measure also includes a clause offering a refundable “food/excise tax credit” to people earning less than $30,000 a year or couples earning less than $50,000 a year. The credit would equal $150 multiplied by the number of eligible exemptions the taxpayer has.
The measure would also remove the age limit for the state household and dependent tax credit, allowing taxpayers to claim people of any age as a dependent as long as that person is eligible for social security disability insurance.
The final provision of the bill would allow for the creation of an awareness campaign by the state Department of Taxation to ensure that low-wage earners are informed of their tax withholding options.
“There are things in this bill that we needed explained,” Ilagan said. “So there’s definitely some education needed for people to become familiar with these credits.”
“We don’t want people to pay too much,” Onishi said. “As a rule, we prefer that they keep more money in their pockets.”
Onishi said HB 2510 would make it through the House one way or another, but couldn’t speak to how he would fare in the Senate. However, he added that he hopes and expects a minimum wage increase to become law this year one way or another.
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