HB4 - Minimum Wage Bill Summary

• Establishes a temporary small business income tax credit for qualified employers with 25 or fewer employees and gross income under $1,000,000 to offset 50% of health care costs for employees earning under $25,000 annually and 25% for employees earning under $50,000 annually, with a maximum credit of $50,000 per year.

• Increases Hawaii's minimum wage from $10.10 per hour to $11.50 (January 1, 2022), $13.50 (January 1, 2023), $14.50 (January 1, 2024), $16.00 (January 1, 2025), and $17.00 (January 1, 2026).

• Implements an automatic minimum wage adjustment mechanism beginning September 30, 2026, with annual adjustments rounded to the nearest 25 cents based on the Urban Hawaii Consumer Price Index, with no decreases allowed in subsequent years.

• Eliminates the tip credit that previously allowed employers to pay tipped employees less than the minimum wage when combined with tips.

• Tax credit expires June 30, 2027; minimum wage increases take effect July 1, 2021; tax credit applies to taxable years beginning after December 31, 2022.