Legislature(2009 - 2010)
04/16/2009 05:11 PM House FIN
| Audio | Topic |
|---|---|
| SB1 | |
| HB88 | |
| HB151 | |
| SB57 | |
| SB96 | |
| SB170 | |
| SB114 | |
| SB75 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 1(FIN)
"An Act increasing the minimum hourly wage; and
providing for an effective date."
Co-Chair Hawker announced that public testimony for SB 1
would commence. He felt that the proposed tip credit
amendment was appropriate for the legislation.
MARIE DARLIN, AMERICAN ASSOCIATION OF RETIRED PERSONS (AARP)
CAPITAL CITY TASK FORCE, testified in favor of SB 1. She
highlighted points from the letter submitted by AARP (copy
on file). She expressed concern for older Alaskans working
part-time at the minimum wage. She articulated the
importance of a living wage for elderly Alaskans. She
pointed out to the committee that the number of elderly
workers earning the minimum wage was growing in size, and
that policies should be implemented to insure that elderly
employees are earning enough to cover essential living
expenses.
5:18:27 PM
DALE FOX, PRESIDENT, ALASKA CABARET, HOTEL, RESTAURANT AND
RETAILERS ASSOCIATION (CHARR), ANCHORAGE testified via
teleconference. He stated that CHARR supports the minimum
wage increase, provided the legislation includes a
comprehensive tip credit proposal. He detailed several ways
in which the tip credit would help employers. He explained
that the proposed tip credit would provide incentives to
businesses that provide an environment for highly
compensated tipped employees. He stressed that the tip
credit proposal that CHARR suggests differs from similarly
titled laws in other states. For example, the tip credit
proposed by CHARR would not reduce the tipped employee's
wage of $7.25. The tipped employee would need to make at
least $14.50 per hour in order for the employer to qualify
for the credit.
Co-Chair Hawker commented that the legislature was not
prepared to move forward on the CHARR tip proposal
legislation.
5:21:49 PM
ROBERT MCCORMICK, FINANCIAL MANAGER, GLACIER BREW HOUSE/ORSO
RESTORANTE, ANCHORAGE, testified via teleconference. He
stated that the majority of his employees make the minimum
wage. In addition to paid wages, the employees also earn
tips. In 2008, tipped employees averaged as much as $13.99
per hour in tips. When added to the average hourly wage of
$7.83, the total hourly wage was 21.83. He stated that only
the highest paid restaurant workers would benefit from the
legislation. He explained that the tip credit proposed by
CHARR would affect only persons making $7.25 per hour or
more in tip income. He opined that the restaurant industry
has been burdened by challenges brought on by the current
economic crisis. He stressed that if the minimum wage
increase is to be considered it must include a tip credit
amendment.
5:24:57 PM
Representative Gara shared that he understood the
difficulties faced by the restaurant industry. He reasoned
that it made sense to adjust the minimum wage to reflect the
rising cost of living. He noted that the prices on
restaurant menus have risen while the wage paid to servers
has not.
Mr. McCormick contended that the average percentage tipped
employees receive for their service is based on sales, and
therefore, rises with inflation. He felt that because of
this, the raising of the hourly wage would be unnecessary.
Representative Gara asked if Mr. McCormick's employees were
currently making the same wage of $7.15 per hour now, as in
2006. Mr. McCormick said that was correct.
5:27:51 PM
BILL BUBBEL, OWNER, PUMP HOUSE RESTAURANT, FAIRBANKS
testified via teleconference. He inquired about the proposed
amount of the minimum wage increase. Co-Chair Hawker
replied that the legislation would raise the minimum wage by
$.50 after January 1, 2010. Mr. Bubbel felt that the amount
was acceptable. He stressed that Department of Labor and
Workforce Development (DOL) statistics, which state that 22
thousand Alaskans are currently earning minimum wage, do not
take into account tipped employees. He felt that the
statistics on restaurant employee earnings were flawed in
various ways. He explained that restaurant employers pay a
10 percent tax on employee tips. For example; when his
employees earn a total of $400,000 a year in tips, he is
responsible for paying $40,000 in taxes on those tips. This
is comparable to a yearly wage that he was unable to pay to
another employee. The tip credit is a way to mitigate the
extra expense to employers. He expressed concern for the
possibility of a financially unsuccessful tourist season. He
reiterated Mr. McCormick's rhetoric about the rise of tip
percentage with inflation.
5:32:40 PM
JACK AMON, OWNER, MARX BROTHERS CAFÉ, ANCHORAGE testified
via teleconference. He stressed that most restaurant
employees already make well over the minimum wage. He added
that for all financial purposes, tipped earnings are wages.
He shared that he average earnings for tipped employees in
the restaurant industry are $25,000 to $40,000 per year. He
stated that the structure of minimum wage laws in the state
unfairly restrict the restaurant industry from receiving
compensation for tipped employees. He felt that the intent
of the bill was unfair and contrary to law.
5:34:42 PM
Representative Gara pointed out that the minimum wage has
not gone up in six years. Mr. Amon questioned the logic of
forcing the restaurant industry to pay a higher minimum
wage. Representative Gara countered that only the tip
portion of the employee salary has risen with inflation.
5:36:07 PM
BRUCE BURNETT, OWNER, TGIFRIDAYS, ANCHORAGE, testified via
teleconference. He stated that none of his employees make
less than $9.00 per hour. He said that the bartenders and
waiters that work for him make $30.00 to $40.00 per hour,
including tips. He felt the tip credit was necessary to
balance a raise in the minimum wage.
5:39:24 PM
Representative Kelly summarized that Mr. Burnett didn't want
the government controlling employer ability to set pay
scales for their establishments. Mr. Burnett felt that he
amount employers would be asked to spend on the raises could
be excessive.
5:40:57 PM
FRED ROSENBERG, OWNER, RED ROBIN, ANCHORAGE testified via
teleconference. He echoed the previous testimony. He spoke
in support of raising the minimum wage, but emphasized the
need for a tip credit. He said that the federal government
recognizes all wages as income. Waiters in his restaurant
average $22 per hour in reported tip income, in addition to
the hourly wage. The tip credit is recognized in forty-three
states across the country as way to balance the wages of all
restaurant employees. It provides the employers with a way
to pay non tipped employees a comparable wage.
5:44:12 PM
BOB WINN, CHARR, ANCHORAGE testified via teleconference,
agreed with the previous testimony. He felt that the tip
credit was crucial to ensure the survival of small
businesses in the current economic climate.
Representative Gara commented that as a restaurant owner, he
is aware that restaurant profit margins are not large;
however, as a policy maker, he is advocating for the
employee.
5:47:45 PM
TRINA JOHNSON, OWNER, LAMEX, ANCHORAGE testified via
teleconference. She agreed with the previous testifiers.
She shared her experience in the restaurant industry. She
said that the minimum wage increase of five years ago forced
her to close one of her restaurants. She referred to a
letter she submitted to the committee (copy of file). She
related that she no longer is able to provide any benefits
to her employees. She testified strongly in support of the
addition of a tip credit to the legislation.
5:51:23 PM
Co-Chair Hawker solicited further public testimony. There
being none, public testimony was closed.
Representative Gara shared his decision not to offer
Amendment 2, which had been handed out to the committee for
discussion. He referred to the Legislative Research Report
on the deletion of the inflation proofing provision on the
minimum wage (copy on file). He explained that under the
Murkowski administration the inflation proofing provision
was deleted from the minimum wage, stalling the minimum wage
at $7.15 per hour. Had the provision remained and the
minimum wage kept up with inflation it would now be $8.50
per hour. He maintained that there would be no significant
employee impact if wages were raised a maximum of 10 per
cent a year. He spoke in favor of raising the minimum wage
to make up for the inflation losses that workers have
incurred since 2003. The amendment would have increased the
minimum wage by 70 cents per year for the next 2 years. He
pointed out that 10,000 people earn less than $8 per hour in
the state. He thought fair pay for hard work was important.
He related that the wage increase was necessary for
employees that might not be courageous enough to demand wage
increases, which are necessary to offset the rise in the
cost of living.
5:54:51 PM
Representative Fairclough voiced support for the minimum
wage increase. She requested an expansion of the
conversation to include global business issues. She informed
the committee that the United States is currently indebted
to China for $3 trillion. She asserted that people in
America can't afford to buy American made products. She
stressed that increasing labor costs would force companies
to raise prices on goods and services. She emphasized the
importance of supporting a tip credit in order to save
American jobs. She felt the minimum wage increase, without
the tip credit, was inappropriate given the current economic
climate.
5:58:24 PM
Vice-Chair Thomas spoke of his experience as a commercial
fisherman. He felt with the current price of fish being low,
an increase in the minimum wage could harm the commercial
fishing industry. He expressed alarm that 10,000 people in
the state were making less than minimum wage. He asserted
that DOL distributes a substantial amount of money to train
Alaskans for jobs that pay above the minimum wage and
wondered why there were so many low paid residents
throughout the state.
6:00:25 PM
Representative Crawford commented that the proposed $.50
rise of the minimum wage was inadequate. He felt that the
lack of benefits and low wages presented to the workforce
were appalling. He spoke against the tip credit and stressed
that the minimum wage should be higher. He also stressed the
need for employees to receive health care benefits from
their employers. He expressed frustration with the
legislation.
6:03:43 PM
Co-Chair Hawker referred to a document distributed to the
committee by Representative Gara's office entitled,
"Estimate Alaska 2007 Employment by Industry and Below
Certain Wages" (copy on file). The numbers, provided by DOL,
show that approximately 9,000 workers in the state earn
$7.75 per hour. About 22,000 earn less than $8.75 per hour.
Representative Gara commented that Alaska used to have the
highest minimum wage in the country, and now has the lowest
minimum wage on the West Coast.
Vice-Chair Thomas requested that DOL provide a report on how
many of Alaska's unemployed workers have been offered job
training.
6:05:23 PM
Co-Chair Hawker noted the zero fiscal note represented the
impact to the State of Alaska as an entity, but not to
private employers.
6:05:31 PM
Representative Kelly expressed disappointed that there had
not been more support for including the tip credit in the
legislation.
Vice-Chair Thomas MOVED to report CSSB 1 out of Committee
with individual recommendations and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
CSSB 1 (FIN) was REPORTED out of Committee with the attached
zero fiscal note and the recommendations of individual
members.
6:07:36 PM
| Document Name | Date/Time | Subjects |
|---|