While nearly all lawmakers wanted to increase Hawaii’s minimum wage this year, state House and Senate negotiators threw in the towel Friday afternoon.

The sticking point was “serious concerns,” as Rep. Aaron Johanson said, from the state Department of Labor and Industrial Relations.

The agency advised that allowing one rate increase from the current $10.10 an hour to $15 an hour by 2024 — but also allowing an increase to just $13 for employees that are provided health care — could invite legal challenges.

Rep. Aaron Johanson, second from left, and Sen. Brian Taniguchi, at right, meeting on the minimum wage bill Thursday at the Capitol. The measure died Friday.

Cory Lum/Civil Beat

A last-minute proposal from Johanson to his counterpart, Sen. Brian Taniguchi, called for an annual incremental increase to $15 in 2024.

Instead, the two sides deferred House Bill 1191 but promised to bring up an improved measure next January.

Taniguchi expressed disappointment while Johanson termed the turn of events “bittersweet.”

As HB 1191 went into conference committee two weeks ago, the bill called for raising the minimum wage to $15 by 2023. It would also provide an  income tax credit for small businesses to offset their higher overhead.

As well, any full-time worker employed by the state would see their wage grow to $17 an hour.

But that option also presented difficulties, because it created different standards for different workers.

And the tax credit could be seen as a subsidy which might, as Johanson said, bring “unintended consequences” to the state’s 1974 Hawaii Prepaid Health Care Act. It requires employers to provide health care to employee that work at least 20 hours a week.

“We do not want to compromise health care,” he said.

Top Priority

House and Senate leaders said at the beginning of session in January that there was broad agreement on raising the minimum wage. Gov. David Ige wanted the increase as well.

But early disagreement surfaced on the exact figure. Was $15 acceptable, or should it be $17 an hour — described as “a living wage” — given the high cost of living in Hawaii?

Ige and lawmakers also wanted to make sure that local small business, which in addition to having the health care mandate also face high taxes, were not overly burdened. The tax credit was seen as a way to ease their pain.

Supporters wearing Living Wage Hawaii shirts listening to a minimum hearing earlier this year.

Cory Lum/Civil Beat

Members of the Chamber of Commerce Hawaii and social justice groups like Faith Action for Community Equity and many others packed conference committee rooms as the bill moved through session.

By Friday, however, with a 6 p.m. deadline hovering for all bills to stay alive, Johanson and Taniguchi — the labor committee chairs — reluctantly agreed to try again next year.