Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 1144, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to increase the minimum wage from $5.25 per hour to $5.95 per hour beginning on July 1, 2001, and to tie future minimum wage increases to increases in the consumer price index.

Furthermore, this measure repeals the twenty-cent tip credit for tipped employees.

Your Committee finds that the last minimum wage increase occurred in 1993. Due to the effects of inflation, workers currently do not have the same purchasing power that they had in 1993. In this era of time-limited benefits and the national focus on self-sufficiency, it is essential that individuals who work be able to earn an adequate wage.

Furthermore, your Committee finds that the tip credit is a special interest anachronism that was passed to allow the hotel industry a concession during a period where that industry and the visitor industry generally suffered from poor financial returns. Today, with hotel occupancy at or near record rates and the visitor industry thriving, such a tip credit has lost any and all justification.

Your Committee has amended this measure by increasing the minimum wage to $5.75 per hour beginning January 1, 2002 and to $6.25 per hour beginning January 1, 2004. Furthermore, your Committee has amended this measure by deleting references to the consumer price index.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1144, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1144, S.D. 2.