Legislature(1995 - 1996)
02/28/1995 01:30 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SL&C - 2/28/95 SB 94 WORKERS' COMP FOR WORK-STUDY STUDENTS CHAIRMAN KELLY called the Senate Labor and Commerce Committee meeting to order at 1:35 p.m. The first order of business was SB 94. SENATOR KELLY stated he introduced SB 94 at the request of Representative Bettye Davis, and noted a similar measure passed the Legislature last year but was vetoed by former Governor Hickel. JOSH FINK, legislative aide to Senator Kelly, informed committee members this same legislation passed the 18th Legislature as SB 141. He explained that under current law, a student enrolled for credit at a public high school in a course which combines academic instruction with work experience, outside of the school for a non- profit agency, is an employee of the state for purposes of Workers' Compensation. SB 94 broadens the coverage so that all students participating in on-the-job training, as part of an academic program, for no financial compensation, would be covered. This would include students who participate in automotive maintenance, welding, carpentry and various other work programs, in businesses other than non-profits. SB 94 would cover uncompensated students injured at the worksite for medical benefits only, and not for lost wages. SB 94 also provides immunity from being sued, for the school district in which the school is located, for the employer providing the training, and the state. He stated without the immunity provision, private employers will not participate in these training programs. SENATOR SALO inquired whether non-profit volunteers are covered under the Workers' Compensation Act under a very recent change made by the Legislature. MR. FINK replied yes, but clarified SB 94 differs in that it covers students in a work study program placed with non-profit agencies. LARRY WIGET, representing the Anchorage School Administration, testified via teleconference. He noted they support the concept of SB 94, but they are concerned that any claims expenses would be charged back to the school districts who may not have the dedicated funds for that purpose. He stated it should be the state's responsibility to cover claims in the event of an injury to a student. He restated that the Anchorage School Administration supports the concept of SB 94, but it does not support charging school districts for the claims. Number 142 LARRY GORDON, Job Placement Coordinator at the King Career Center in Anchorage, stated the relationship between student and employer is a training and learning one, rather than an employee-employer one. He noted there are many employers who want to assist students but are afraid of liability problems, and he has lost excellent training opportunities for students because of this concern. The employers need to be protected as they can provide excellent learning opportunities for students and often provide jobs after the training is completed. He urged committee members to support SB 94. SENATOR KELLY questioned why work experience, rather than training experience, has been emphasized in SB 94. MR. FINK replied those terms should be synonymous. SENATOR KELLY questioned whether the employers would be willing to pick up the Workers' Compensation premiums. MR. FINK commented employers are not presently doing so, as students are often limited in the number of hours they can work during the semester. Number 175 SENATOR KELLY asked Mr. Gordon if he thought any of the employers would be willing to pay the Workers' Compensation payments for the students. MR. GORDON replied the students are only on the premises for a limited number of hours per week, and essentially the employer is providing a learning opportunity for the student. Employers want to be covered while they are teaching the student, but do not feel the activity is sufficient enough for them to pay Workers' Compensation premiums. SENATOR KELLY asked what a Workers' Compensation premium would cost for a typical work-study student. Don Koch, Marketing Surveillance Officer of the Division of Insurance, stated the costs vary depending on the occupation of the employer, but the range is from 50 cents per $100 to $75 per $100. SENATOR KELLY asked if the rates would be lower since only medical benefits would be paid. MR. KOCH replied that currently there is no structure for not including the indemnity portion of the payment. Approximately 50 percent of the rate is attributed to medical costs. Number 224 SENATOR MILLER stated, in his experience as an employer, the company usually bases the amount on the overall salary earned, therefore if the student is not compensated, there is nothing to base the premium on. MR. KOCH stated that is correct, and something would have to be structured in. He noted an equivalent is usually negotiated for volunteers. SENATOR KELLY asked if the premium is normally based on an hourly wage. MR. KOCH answered it is based on each $100 of wages earned; the only state that uses an hourly wage approach is Washington. He added it would not be difficult for an actuary to determine those amounts. CLIFF STOCKTON, an aviation maintenance technology instructor at the King Center, testified. He spoke in support of SB 94, as he is aware of many opportunities for industry-related hands-on experiences not being used. The proprietors and owners willing to provide this training are not willing to take any money out of their pockets to enhance training of students. They feel it is the state's and school districts' responsibility to provide the training. Number 269 BRAD THOMPSON, Director of the Division of Risk Management, prepared the fiscal note in committee packets. He advised it is an estimate of future costs based on the average cost per employee the state sees in its employee group applied after reducing medical costs and discounting it further. It is a nominal cost of $24,000 carried annually, but that cost could easily vary as claims per employee can average $8,000 per claim. SENATOR KELLY asked if $24,000 would pay for student work study programs statewide. MR. THOMPSON replied affirmatively, but for uncompensated students receiving medical benefits only. SENATOR KELLY asked how many students that number would include. MR. THOMPSON answered that number is unknown, but a modest estimate of 250 students was used, which was included in SB 141, passed last session. He noted the Division's costs are charged to each agency on an interagency allocation system based on their actual claims experience. SENATOR SALO questioned whether this type of approach might discourage apprenticeships, in which the employer pays the worker a low level of pay. A speaker from the Career Center answered that usually apprenticeships occur after the student has graduated from high school. SB 94 addresses students who attend on-the-job training instead of attending a high school class. Number 330 SENATOR KELLY stated he would like to do further work on SB 94 and would bring it before the committee at a later date.