Hawai‘i’s minimum wage will rise to $12 per hour on Oct. 1, and then will go up by $2 every other year until it reaches $18 per hour on Jan. 1, 2028.

Meanwhile, the tip credit, or “tip penalty,” will increase by 25 cents from 75 cents to a dollar Oct. 1, and will continue to increase by 25 cents every other year until it reaches $1.50 on Jan. 1, 2028.

This allows employers to pay less than the full minimum wage to workers who make at least $20 in tips per month, as long as the worker makes at least $7 above the minimum wage in combined wages and tips per hour after the penalty is calculated.