Legislature(1995 - 1996)

02/28/1995 01:30 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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             
 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                   
 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              
 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.                          

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