STAND. COM. REP. NO. 1080-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 2893
                                     S.D. 1
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committees on Labor and Public Employment and Economic
Development and Business Concerns, to which was referred S.B. No.
2893, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO MINIMUM WAGE,"

beg leave to report as follows:

     The purpose of this bill is to:

     (1)  Require that any hotel or restaurant applying a service
          charge for the sale of food or beverage services
          distribute the service charge to its employees or else
          clearly disclose to the purchaser that the charge will
          not go to the employees;

     (2)  Raise the minimum wage to $5.50 per hour beginning
          January 1, 2001, and to $5.75 per hour beginning
          January 1, 2002; and 

     (3)  Raise the tip credit to forty cents below the
          applicable minimum wage beginning January 1, 2001.

     Thirty-two government agencies, companies, individuals, and
interest groups submitted testimony on this bill.  The testimony
received was both in support and in opposition to this measure.

     Your Committees find that there is a need to give business
more time to prepare for the additional labor costs that this

 
 
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measure will create upon passage. As such, your Committees
believe that the effective date of the minimum wage increase
should be deferred to provide that additional time.  Further,
your Committees understand that the increase to the tip credit
proposed by this measure will impact some, but not all
businesses.  Your Committees further find that the tip credit has
not been increased in a number of years and that only a small
number of workers would be affected by a change in the tip
credit. 

     Your Committees received testimony indicating that an
increase in the tip credit will assist businesses in offsetting
the resulting additional labor costs.  At the same time, your
Committees are concerned that raising the minimum wage while also
increasing the tip credit may result in a negligible gain for
affected workers.

     Due to the number and complexity of the factors involved,
your Committees, therefore, reserve the right to discuss further
an increase in the tip credit in relation to a minimum wage
increase and the ramifications of both on Hawaii's businesses and
workforce.

     After careful consideration, your Committees have amended
this bill by deleting its substance and inserting language
reflected in a similar bill, H.B. No. 2984, H.D. 2, which
increased the minimum wage to $5.75 per hour beginning January 1,
2003, and increased the tip credit to 22 cents beginning January
1, 2003.    H.B. No. 2984, H.D. 2, passed the House earlier this
session after a public hearing before your Committees on Labor
and Public Employment, Economic Development and Business
Concerns, and Finance.

     Your Committees made additional amendments to:

     (1)  Facilitate discussion on the tip credit by leaving the
          amount blank; and

     (2)  Make technical, nonsubstantive changes for clarity,
          consistency, and style.

     As affirmed by the records of votes of the members of your
Committees on Labor and Public Employment and Economic
Development and Business Concerns that are attached to this
report, your Committees are in accord with the intent and purpose
of S.B. No. 2893, S.D. 1, as amended herein, and recommend that
it pass Second Reading in the form attached hereto as S.B. No.
2893, S.D. 1, H.D. 1, and be referred to the Committee on
Finance.

 
                                 STAND. COM. REP. NO. 1080-00
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                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Labor and Public
                                   Employment and Economic
                                   Development and Business
                                   Concerns,

                                   
                                   
                                   
                                   
______________________________     ______________________________
ROBERT N. HERKES, Chair            TERRY NUI YOSHINAGA, Chair