With the new year comes a new minimum wage in Hawaiʻi.
It’s now $16 an hour — and many local restaurant owners are concerned about what that means for their industry.
But what didn’t increase was the tip credit, and that has restaurant owners worried.
The tip credit is what employers such as restaurants can deduct from hourly wages for tipped employees.
The tip credit increased to $1.25 in 2024 when the minimum wage went up to $14 an hour.
But it skips this year before going up to $1.50 in 2028, when the minimum wage goes up to $18 an hour.
That means restaurants must now pay their servers and other tipped employees at least $14.75 per hour — that’s in addition to their tips.
Kitchen staff and other back-of-the-house workers who don’t earn tips must now be paid at least $16 an hour. That includes managers.
And that adds to the monthly operational costs for every restaurant — on top of rising costs for food, utilities and rent.
Industry leaders say the upshot is that 2026 may see hours cut, workers laid off, or, worst case, more restaurants closing in Hawaiʻi.
