Hawai‘i’s minimum wage is set to increase to $16 per hour on Jan. 1, up from $14, a 14.3% increase. This is the third step in a series of planned increases that will ultimately bring the minimum wage to $18 in two years.
“We’re definitely hearing from businesses that the increase will have an impact,” Sherry Menor, president and CEO of Chamber of Commerce Hawai‘i, a statewide nonprofit that advocates for business in Hawai‘i, told Aloha State Daily. “This year has been challenging [for the] overall business climate here in Hawai‘i, with … uncertainty from the tariff situation, as well as the temporary government shutdown, increased cost of goods and services. Cumulatively, it adds to the already challenging business climate, and with the minimum wage increase, even more so.”
Menor says she’s seen many restaurants close their doors or decide to cut back hours because for some of them, “it’s come to a tipping point where they had no choice.”
In 2015, the minimum wage in Hawai‘i was $7.75 and went up to $8.50 in 2016, $9.25 in 2017 and $10.10 in 2018.
Act 114, which went into effect in 2022, raised the minimum wage to $12 per hour beginning Oct. 1 of that year and set three additional increases to go into effect over the subsequent six years. The minimum wage went to $14 per hour on Jan. 1, 2024, is set to become $16 per hour at the start of the new year and will hit $18 per hour on Jan. 1, 2028.
The federal minimum wage has been $7.25 since 2009.
Menor says the chamber supported a minimum wage increase when it passed but advocated for an increase that was “much more spread out,” knowing that a $2 jump nearly every year would have an impact on the state’s businesses.
While many employers already pay above minimum wage, Menor says wage compression is an issue. That means if the minimum wage goes up, other wages increase too, she explains.
Other costs that are tied to wages, such as temporary disability insurance, workers’ compensation and unemployment insurance, also increase with a higher minimum wage, she says. And prepaid health care, which is required for employees working 20 hours or more per week, also add to an employer’s cost.
“Of course, we all want to ensure that we can address the cost of living and that our employees do make a livable wage,” she says. “In addition to that, hoping that we can also reduce the regulatory burden on employers so that overall expenses do not continue to increase at an unsustainable level.”
The 2025 Legislature also enacted Act 115, which establishes a minimum $500 civil penalty for employers who violate the Wage and Hour Law.
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Stephanie Salmons can be reached at stephanie@alohastatedaily.com.
