Legislature(2003 - 2004)

02/05/2004 02:34 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL 255                                                                                                                
Co-Chair  Williams provided  the Committee  with Work  Draft,                                                                   
23-LS0827, Version U, on behalf of Representative Rokeberg.                                                                     
REPRESENTATIVE  NORM  ROKEBERG  briefly  outlined  the  three                                                                   
provisions of Version U relating  to the Alaska Wage and Hour                                                                   
Section I  refers to definitions  and to current  regulations                                                                   
regarding the  "80-20 Rule" and  the provision  for executive                                                                   
salaries  at 2.5  times the  minimum  wage for  the first  40                                                                   
hours.   It  is  the  sponsor's  intention to  conform  these                                                                   
definitions  to   the  federal   law  and  the   new  federal                                                                   
regulations  that will  go into  effect  in March  2004.   He                                                                   
explained  that this  would repeal  the  "80-20" rule,  which                                                                   
currently means that  if an employee is working  as a manager                                                                   
and is not eligible  for overtime pay, the  employee can't do                                                                   
20% of  an hourly employee's  work.  Representative  Rokeberg                                                                   
asserted that  it is an  extremely restrictive  provision and                                                                   
damaging to state commerce.                                                                                                     
The  Department of  Labor regulations  enacted several  years                                                                   
ago set  a manager's  minimum compensation  at 2.5  times the                                                                   
minimum wage.   Representative Rokeberg explained  that since                                                                   
the minimum wage  law has risen substantially,  2.5 times the                                                                   
minimum wage would currently total $17.88 per hour.                                                                             
Vice-Chair  Meyer  MOVED  to  ADOPT  Work  Draft,  23-LS0827,                                                                   
Version U.  There being NO OBJECTION, it was so ordered.                                                                        
Representative Rokeberg discussed  Section 3, page 3, line 17                                                                   
of Version  U.  He explained  that the language  modifies the                                                                   
flexible  time provisions  currently restricted  to 10  hours                                                                   
per day in a 40-hour period.   The committee substitute would                                                                   
change the flexible schedule to  a two-week, 80-hour schedule                                                                   
to  provide more  flex-time for  working  mothers. He  stated                                                                   
that  it  would accommodate  the  changing  requirements  and                                                                   
patterns of the workforce.                                                                                                      
Representative  Rokeberg suggested  an  additional change  to                                                                   
the  bill that  would address  current law  that requires  an                                                                   
employee  and employer  to submit  flex-time  changes to  the                                                                   
Department  of Labor  for review.    He said  that often  the                                                                   
department does not approve these changes.                                                                                      
Section  4  of  Version  U would  create  a  new  section  in                                                                   
existing  law that  addresses  the training  wage  provision.                                                                   
Representative  Rokeberg clarified that  it would  change the                                                                   
period  to 30 days  from the  90-day period  in the  original                                                                   
KAREN  ROGINA,   ALASKA  HOSPITALITY   ALLIANCE  (AHA),   VIA                                                                   
TELECONFERENCE,  ANCHORAGE,  spoke  in  support  of  HB  255,                                                                   
stating that  the AHA believes  all three provisions  benefit                                                                   
both the employer and the employee.  The AHA is the principal                                                                   
employer of entry-level workers.                                                                                                
JON  FAULKNER, OWNER  and MANAGER  of LANDS  END RESORT,  VIA                                                                   
TELECONFERENCE,  HOMER, spoke  in  favor of  the bill,  which                                                                   
impacts  his small business.  He believes  that flex-time  is                                                                   
demanded  by  the  modern workforce.  He  asserted  that  the                                                                   
definition  of  "supervisor"  must  be  changed  because  the                                                                   
present   definition   lacks   clarity,  and   currently   in                                                                   
litigation  the burden  is on  the employer  to prove that  a                                                                   
supervisor doesn't  spend more than 20% of his  time on "line                                                                   
JOHN  BROWN,   PRESIDENT  of   the  CENTRAL  LABOR   COUNCIL,                                                                   
FAIRBANKS,  VIA  TELECONFERENCE,  FAIRBANKS stated  that  the                                                                   
Council is  opposed to  HB 255.   He explained that  although                                                                   
employers are  unhappy with current regulations,  the statute                                                                   
has been in place for years and  he could see no advantage to                                                                   
the  proposed   changes  which  would  lower   the  wages  of                                                                   
employees.  He  expressed  doubt   that  12-hour  days  would                                                                   
provide flex-time,  or that employees  would want to  work 12                                                                   
hours a day without receiving overtime pay.                                                                                     
MICHAEL  NOTAR,  ASSISTANT  BUSINESS MANAGER  TO  IBEW  Local                                                                   
1547, and PRESIDENT,  BUILDING TRADES COUNCIL,  JUNEAU, spoke                                                                   
on behalf of about 5,000 people  who are paid an hourly wage.                                                                   
He  stated  the  IBEW's strong  opposition  to  the  proposed                                                                   
changes to  the state  wage and hour  law "that would  return                                                                   
workers to  pre-20  Century standards  and would  undo nearly                                                                   
one hundred years  of progressive reform." He  explained that                                                                   
the  provision  exists  in  state law  to  allow  workers  to                                                                   
develop a bona  fide voluntary flex plan within  a collective                                                                   
bargaining agreement. The employee  is shielded from employer                                                                   
coercion  through  the  collective bargaining  process.    He                                                                   
stated  that  the  issue  in  this  legislation  is  employer                                                                   
ANDREW  HODNIK, VIA  TELECONFERENCE,  FAIRBANKS, referred  to                                                                   
Section 4,  stating that  he is a veteran  and should  not be                                                                   
penalized for serving  his country.  He believes  that anyone                                                                   
over the  age of 18  should be paid  a fair wage,  whether in                                                                   
training or not.                                                                                                                
CHIP  WAGONER,  ALASKA CATHOLIC  CONFERENCE,  JUNEAU,  voiced                                                                   
opposition  to  the training  wage,  which would  reduce  the                                                                   
minimum wage  by $2.00  for 30 days  for newly hired  workers                                                                   
under 20.  He stated  that this  represents a 28%  reduction,                                                                   
and it counters  the public policy of the  legislature, which                                                                   
set the  minimum wage at $7.15.  Many young people  have only                                                                   
90 days during the summer months  to earn money for the year,                                                                   
and  thirty days  are not  needed  to train  people in  entry                                                                   
level or  fast food  industry jobs.  The training wage  issue                                                                   
affects those who can least afford  it and cannot do anything                                                                   
about it, including minorities and those with disabilities.                                                                     
JAMES AKERS,  VIA TELECONFERENCE,  FAIRBANKS, stated  that he                                                                   
is a Viet Nam  combat veteran and he expressed  opposition to                                                                   
the proposed changes in the bill.                                                                                               
DAVID  FORD, BUSINESS  MANAGER, IRONWORKERS  UNION, and  VICE                                                                   
PRESIDENT,  ANCHORAGE BUILDING  TRADES  COUNCIL, stated  that                                                                   
the proposed changes  are detrimental to the  employee and to                                                                   
the Alaskan economy.  Flex-time work weeks are  not a benefit                                                                   
to  the employee.   Mr.  Ford referred  to page  4, line  18,                                                                   
stating  that voluntary  agreements between  an employer  and                                                                   
employee do  not occur. Time off  for family matters  is also                                                                   
not a  reality in  the building  industry. The provisions  of                                                                   
the bill  would allow  an employer  to coerce  a worker.   He                                                                   
concluded that  young people would  have to leave  during the                                                                   
summer to find work, because $5.15  per hour in Alaska is not                                                                   
a fair wage for kids, or for any worker.                                                                                        
JAY  QUAKENBUSH,   BUSINESS  REPRESENTATIVE  FOR   IBEW,  VIA                                                                   
TELECONFERENCE,  FAIRBANKS, discussed  young people  who want                                                                   
to  remain in  Alaska  to  earn a  living,  and  who come  up                                                                   
through  the ranks  before  they enter  a  career. He  voiced                                                                   
opposition  to employees aged  16- 20  working for  less than                                                                   
the minimum wage when being trained.  Mr. Quakenbush asserted                                                                   
that  this legislation  will  hurt Alaska's  economy  because                                                                   
workers will leave.                                                                                                             
GARY   NIESE,   REPRESENTING    SELF,   VIA   TELECONFERENCE,                                                                   
FAIRBANKS,  spoke as  an hourly  worker opposed  to the  bill                                                                   
because  it does not  benefit hourly  workers. He  questioned                                                                   
how a  single mother  could afford  daycare during  a 12-hour                                                                   
shift at straight-time pay.                                                                                                     
STEVE  JOSWIAK,  REPRESENTATIVE  FOR UNITED  FOOD  COMMERCIAL                                                                   
WORKERS UNION,  VIA TELECONFERENCE, FAIRBANKS stated  that he                                                                   
represents working  mothers and kids  aged 14-19. He  did not                                                                   
know of one  mother who would benefit from  the proposed flex                                                                   
work plan, and he voiced opposition to the training wage.                                                                       
TAPE HFC 04 - 21, Side B                                                                                                      
JOHN   BROWN,    EMPLOYEE   of   FRED   MEYER    NORTH,   VIA                                                                   
TELECONFERENCE,  FAIRBANKS stated  he's been  employed for  3                                                                   
weeks at Fred Meyer and the training  period was adequate for                                                                   
mastery  of the  tasks. He  feels  this bill  would not  help                                                                   
anyone but employers.                                                                                                           
DON ETHERIDGE,  AFL &  CIO, brought up  the "80-20  rule" and                                                                   
stated  that a  supervisor could  occasionally  cover for  an                                                                   
hourly  employee who  doesn't show  up for  a shift,  without                                                                   
being fined.   Mr.Etheridge expressed the AFL  & CIO's "total                                                                   
opposition" to the bill.                                                                                                        
Representative  Rokeberg asked  if the  Alaska Wage  and Hour                                                                   
Act,  including the  flexible  work plan  provisions,  affect                                                                   
organized labor,  which is  covered by collective  bargaining                                                                   
contracts  to  negotiate  work  conditions.    Mr.  Etheridge                                                                   
responded   "no,"  that   organized   labor  has   collective                                                                   
bargaining contracts.   He stated  that under  the Collective                                                                   
Bargaining  Act, the  employee  isn't threatened  with  being                                                                   
fired if he refuses a flex work week.                                                                                           
PAM LABOLLE, STATE CHAMBER OF  COMMERCE, stated that the bill                                                                   
is  very  important  to  the  employers  in  the  state.  The                                                                   
training wage is  a break for kids without  any previous work                                                                   
experience.    She  discussed   the  definition  of  salaried                                                                   
worker, and  the benefit of a  salaried worker being  able to                                                                   
negotiating a package. She discussed  her personal experience                                                                   
with  flex-time, which  was  positive. Ms.  LaBolle  believes                                                                   
that  the  legislation  would   be  beneficial  to  both  the                                                                   
employee and the employer.                                                                                                      
JACK AMON,  PART OWNER  of MARX  BROTHERS CAFÉ and  CATERING,                                                                   
PAST  CHAIR OF  ALASKA RESTAURANT  AND BEVERAGE  ASSOCIATION,                                                                   
VIA TELECONFERENCE,  ANCHORAGE  spoke in  support of  HB 255.                                                                   
He  stated  that  the  bill  would   correct  the  unintended                                                                   
consequences  of  the  minimum wage  increase.  Changing  the                                                                   
definition of  supervisor to fit  the rules of  the workplace                                                                   
would benefit  both the employee  and the employer.  Mr. Amon                                                                   
stated the flex  plan would benefit the employee,  and he was                                                                   
in favor of  the training wage because  apprenticeships would                                                                   
not be possible at a higher wage.   The high turnover rate of                                                                   
young  people makes  it difficult  for an  employer to  start                                                                   
them at a higher wage.                                                                                                          
BARBARA  HUFT-TUCKNES,   DIRECTOR  OF  LEGISLATIVE   AFFAIRS,                                                                   
TEAMSTERS LOCAL 959, stated that  the Federal Labor Standards                                                                   
Act directly  affects her  public employees under  collective                                                                   
bargaining agreements.  Those  employees will look at laws on                                                                   
the federal,  state, and local  levels with Teamsters  as the                                                                   
bargaining  unit.  Without  the  opportunity  to  assess  the                                                                   
impact on  employees, she  predicts a continuing  controversy                                                                   
over adoption of the federal regulations  on definitions. She                                                                   
asked that the  section on employees in  protected categories                                                                   
be removed.  She described a situation  where an employee was                                                                   
given  flex-time but  her total  hours were  reduced and  her                                                                   
days  off were  not  consecutive.  She voiced  opposition  to                                                                   
Section  2  because  the  flex  schedule  would  be  used  by                                                                   
employers on  unprotected, unrepresented employees  to reduce                                                                   
their overtime costs.                                                                                                           
Representative Hawker brought  up the current law of 40 hours                                                                   
per week  and not  more than  10 hours  per day.   He  asked,                                                                   
would not  a flex-time agreement  become invalid if  the work                                                                   
schedule was reduced  to fewer than 40 hours per  week.  Mrs.                                                                   
Huft-Tucknes replied yes, that  it would, but in the case she                                                                   
described above the employee did  not report the violation to                                                                   
the Department of Labor.                                                                                                        
Representative  Rokeberg interjected  that under the  current                                                                   
law  the  Department  of Labor  has  oversight,  which  would                                                                   
continue under his proposed change.                                                                                             
Ms.  Huft-Tucknes  concluded  by  voicing  concern  over  the                                                                   
potential inequities of the training wage.                                                                                      
KEVIN  BATTERS,   GENERAL  MANAGER,  ANCHORAGE   HILTON,  VIA                                                                   
TELECONFERENCE, ANCHORAGE spoke  in support of protecting the                                                                   
individual and the hourly employee.  He stated that the 80-20                                                                   
rule has  caused confusion for  hotels and food  and beverage                                                                   
outlets.   He  suggested eliminating  the exempt  supervisory                                                                   
management  position  and  creating the  hourly  position  in                                                                   
order to avoid litigation.                                                                                                      
JOHN   M.   JOHNSON,   RETIRED   CONSTRUCTION   WORKER,   VIA                                                                   
TELECONFERENCE, FAIRBANKS, stated  that an 8-10 hour work day                                                                   
without overtime  is a  step backwards  in the workplace.  He                                                                   
said that it is unfair.                                                                                                         
HB  255  was   heard  and  HELD  in  Committee   for  further                                                                   

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