Legislation to eliminate Hawaii’s tip credits deferred for vote again

Senate Bill 2784 has divided employees and employers over whether to pay tipped employees at least Hawaii’s minimum wage and has been deferred for a second time.

According to SB 2784, allowing tipped employees to earn Hawaii’s minimum wage — which is currently $14 an hour — in addition to tips would “strengthen the financial security of service industry employees.”


Thomas Jones, spokesperson for the Hawaii Restaurant Association, testified in opposition to SB 2784 on Wednesday before it was deferred to a vote by the joint session of the Senate Labor and Technology and Ways and Means committees, which voted Friday to defer another vote to today.

“Of all employees, I think the servers that are tipped probably need the least amount of protection, not the most amount of protection,” Jones said.

Servers in the restaurant industry earn the highest incomes, he said.

SB 2784 would repeal Hawaii’s so-called tip credit that allows restaurants to pay tipped employees less than the state’s minimum wage.

“I can understand philosophically why people might feel that the tip credit isn’t appropriate, ” he said. “However, when you look at the practical reality of who gets paid and how much money they make, servers are in a really good situation.”

Russell Ryan, chief financial officer for the Highway Inn restaurant in Kakaako, testified in opposition that the “Tip Credit must be the most misunderstood concept in Labor Law.”

According to Ryan, the tip credit allows restaurants to pay all staff “equitably,” Ryan said.

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