Hawaii · tip credit
Hawaii tip credit (MW+$7 sliding credit)
Under HRS §§ 387-2 / 387-3 and HAR § 12-20-11, Hawaii’s 2026 tip credit is small and tightly gated: basic MW $16.00, max tip credit $1.25 → cash floor $14.75, and credit only when cash + tips average at least MW+$7 ($23.00/h) with sliding credit min($1.25, tipAvg−$7). OT cash = RR×1½ − tip credit. Weekly 40 only. Not NY CR146. Not FLSA $2.13.
How HRS § 387-2 / HAR § 12-20-11 pays
HRS § 387-2 sets the basic minimum wage ($16.00 beginning 1 Jan 2026) and allows an employer to take a tip credit against that wage for an employee who customarily and regularly receives more than $20 a month in tips, provided the combined amount the employee receives from the employer and in tips is at least $7.00 more than the applicable minimum wage. For 1 Jan 2026 – 31 Dec 2027 the statute’s tip-credit schedule and the DLIR Tip Credit Notice peg the maximum tip credit at $1.25, so the adjusted cash wage is $14.75 and the combined wage+tips floor is $23.00 per hour.
DLIR Tip Credit Notice exhibits slide the allowable tip credit: allowable = min($1.25, max(0, tip average − $7)). A $7.50 tip average supports only a $0.50 credit (cash $15.50). At or under $7.00 average, tip credit is off and the employer pays the full $16.00 minimum wage.
HAR § 12-20-11(d): for overtime under HRS § 387-3, the regular rate is computed before subtracting the tip credit; tips in excess of the tip credit are not included in the regular rate. Overtime cash = regular rate × 1½ − tip credit — never (RR − credit) × 1½. At the tipped MW floor that is $22.75. Hawaii has no private-sector daily overtime; hours on this page follow weekly 40.
Five 10h days @ $16 · tips $412.50 (avg $8.25) → credit $1.25 → 40×$14.75 + 10×$22.75 = $817.50.
Same week · tips $300 on a 40h week (avg $7.50) → sliding credit $0.50 → cash $620 (40×$15.50).
Tips avg $5 → credit off → full MW cash 40×$16 = $640.
Same punches on /new-york-hospitality-tip-credit/ NYC food use a $5.65 tip credit against $17 MW — a different statute and band.
Sources
- HRS § 387-2 — Minimum wage; tip credit (official)
- HRS § 387-3 — Maximum hours; overtime
- DLIR Tip Credit Notice with Easy Reference Exhibits (June 2022 — 2026 $16 / $1.25 / $14.75 / $23 band)
- DLIR Wage Standards Division — Minimum Wage
- HAR § 12-20-11 — Tip credit; notice; overtime regular rate
FAQ
What is Hawaii’s 2026 tip credit?
Basic MW $16.00; max tip credit $1.25 → cash floor $14.75. Employee must customarily receive more than $20/month in tips, and cash + tips must average at least MW+$7 ($23.00/h).
How does the sliding tip credit work?
Allowable tip credit = min($1.25, tip average − $7). Tip average $7.50 → $0.50 credit (cash $15.50). Tip average ≤ $7 → no tip credit.
How is tipped overtime calculated?
OT cash = regular rate before tip credit × 1½ − tip credit (HAR § 12-20-11(d)). At the tipped MW floor that is $22.75. Weekly 40 only — no Hawaii private-sector daily OT.
Is this New York CR146 tip credit?
No. /new-york-hospitality-tip-credit/ uses region × occupation bands under 12 NYCRR §§ 146-1.3 / 146-1.4 without Hawaii’s MW+$7 floor or $1.25 cap.
Is this the federal FLSA $2.13 tip credit?
No. FLSA cash wage $2.13 against $7.25 MW is a different federal floor. Hawaii’s 2026 cash floor is $14.75 against $16.00 with the MW+$7 test.
Who is covered?
Customarily tipped employees (>$20/month) with written tip-credit notice. Missing notice, dual-occupation non-tipped hours, or employer election not to take tip credit turn the credit off.