Hawaii will raise its minimum wage to $10.10 per hour gradually over the next four years under a bill signed by Gov. Neil Abercrombie.
Abercrombie signed the bill at a ceremony Friday.
It's the first time Hawaii's minimum wage will be raised from $7.25 since 2007.
Supporters say higher wages will help working families with people who earn minimum pay.
Living costs are high in Hawaii because nearly everything from apples to air fresheners is shipped to the island chain.
Some had argued the change will hurt small businesses.
Employers with tipped employees could get a credit of 50 cents per hour starting in 2015 and 75 cents per hour in 2016. The tip credit is for employees that make $7 more than minimum wage in wages and tips.