Legislature(1999 - 2000)
02/10/2000 01:40 PM Senate L&C
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
Number 001
SB 193-COLLECTION OF UNPAID WAGES
AID WAGES
CHAIRMAN MACKIE called the Senate Labor and Commerce Committee
meeting to order at 1:40 p.m. and announced SB 193 to be up for
consideration.
SENATOR PEARCE, sponsor of SB 193, said a constituent from
Anchorage called for help because her employer was illegally
withholding final wages from her. Working with the Department of
Labor, she found that the situation was not unique and because of
the way our statutes are written there is a problem in being able
to go to small claims court for the amounts in question.
The Department of Labor suggested changes to the statutes that
would help provide more accommodation for employees who are caught
in this situation.
MR. KRIS KNAUSS, Staff to Senator Pearce, explained SB 193
increased the amounts an individual can retain from the small
claims cases from $7,500 to $20,000. As of now is also keeps it in
small claims with the Department of Labor and Work Force
Development rather than take it into the District Court.
He further explained that attorneys are reluctant to take on cases
where they can't make a profit on a contingency fee basis, such as
$7,500.
Number 2300
MR. DWIGHT PERKINS, Deputy Commissioner, Department of Labor and
Work Force Development, said that this has been a problem in the
past. The Wage and Hour Administration handles about 1,100 - 1,200
valid wage claims per year. About 95 percent of those are settled
administratively without need of court action. The remaining five
percent are filed in small claims courts. About one half of those
are settled before trial.
AS 23.05.220(c) limits the size of the wage claim that can be filed
in small claims court to the maximum of $7,500. They are compelled
to turn away any wage claimants with legitimate claims in excess of
$7,500. They are told they must seek private attorneys to pursue
their case or file their own in court. $7,500 is a lot of money to
an individual. Some legal people are on line and concur with this.
Number 2471
CHAIRMAN MACKIE asked how the claims process works.
MR. RANDY CARR, Chief, Labor Standards and Safety, explained that
presently, if someone presents a wage claim that is within their
statutory limits, the claim is assigned to an investigator and is
handled administratively. Contact is made with an employer and
attempts are made through a series of processes to gather the
facts, investigate the claim, and seek administrative resolution
within the department.
If a claim is found to be valid and they are unable to affect a
resolution with the employer, their final steps of enforcement are
to either file them in small claims court, if they are under $7,500
or refer them to the Department of Law which has been loath to take
any of these cases. This restricts them to prosecuting cases in
small claims court. As the assignee they are authorized to take
those cases into court without benefit of Department of Law's
support.
CHAIRMAN MACKIE asked if they had a lot of inquiries from people
who were not aware of the $7,500 cap in the statute.
MR. CARR replied yes; they have found that they turn away around 10
percent or 100 cases per year. Some of those are in excess of
$20,000. They need to be handled by private counsel, anyhow.
CHAIRMAN MACKIE asked Mr. Perkins if he had any problems with the
proposed amendment.
MR. PERKINS replied that they have no problems with it.
CHAIRMAN MACKIE asked Mr. Knauss to explain the amendment.
MR. KNAUSS explained that it keeps the current language, but
deletes the "shall" and leaves it as "may," giving the penalty more
time. It's not mandatory.
SENATOR LEMAN noted that the amendment adds another paragraph.
Number 3255
MR. CARR said the amendment addresses concerns raised by private
counsel regarding the original proposed change in Section 3 which
would make all waiting time penalties mandatory by adding "shall."
The concern was that penalty could be abusive in certain kinds of
cases. They suggested removing the proposed amendment in Section
3 so the current language in (d) that leaves penalties in a
discretionary state with the court would be unchanged. A new
Section (e) would be added that states if the Department of Labor
and Work Force Development brings a case forward successfully, that
waiting time penalties "shall" be mandatory with those cases.
There was a brief explanation of how the penalties would be
calculated.
MR. JAY SEYMOUR, labor and employment attorney, he has represented
employers primarily. He is speaking for himself here, however. He
doesn't have any problem with raising the jurisdiction of the
Department of Labor to $20,000. It's been his experience that they
have been very professional and easy to deal with. The portion of
the bill that causes him concern is Section 3 which changes "may"
to "shall." There is no law on the books that cause employers more
aggravation and more consternation than the wage and hour clause.
They are very technical and sometimes applied very vague and can
sometimes result in very harsh penalties for technical violations.
Often they will see in a wage and hour case, that claimants will
win getting their overtime that they are due. They are awarded
damages and on top of that they will get full and reasonable
attorney's fees; and then plaintiffs lawyers always ask for waiting
time penalties under AS 23.05.140. If he had input into the bill,
he would request limiting that liquidated damages, if they are
awarded, take the place of the penalties under AS 23.05.140. In
other words, you wouldn't get them both, except if the Department
of Labor was hearing the case. He wouldn't have any difficulty
keeping the new Section 2 as it is proposed.
CHAIRMAN MACKIE asked if they adopted the proposed amendment, would
that alleviate his concerns.
MR. SEYMOUR answered that it would alleviate his major concern
about making the penalties "shall." He has concerns with current
law because they always see claims of overtime cases where the
penalties are added on top of damages for the claimant who
prevailed. Sometimes that is a harsh penalty which is unjust in
some cases.
SENATOR KELLY pointed out that "shall" is not being taken out; they
are just adding a modifier.
CHAIRMAN MACKIE explained that they are taking out the "shall" and
leaving the current section as it is in statute now. They are
adding a new subsection, subsection (e), dealing with how it's
calculated.
Number 3250
SENATOR LEMAN moved to adopt amendment Cramer a 1. SENATOR DONLEY
objected asking what affect this had on a private cause of action.
It refers to an action brought on by the Department.
MR. CARR explained that new section (e) will have no affect on
private causes of action. They would remain as they are now under
existing law where penalties are awarded at the discretion of the
court.
SENATOR DONLEY said it doesn't read that way. Existing law reads
"when an employer violates" which would seem to cover both actions
by the department and private causes of action.
MR. CARR said he didn't have a copy of the actual amendment so he
was at a disadvantage.
SENATOR DONLEY said it looked like a step backwards the way this
amendment was drafted.
SENATOR LEMAN attempted to explain that subparagraph (d) would
remain in the law, but it will remain as it is currently written
and it will be there for private causes of action and for
department actions. They only thing they will be doing is adding
subparagraph (e) which modifies it for actions brought by the
department.
MR. CARR said that was correct. The language is (e) is taken from
the liquidated damages penalties found in AS 23.10.110 where cases
brought by the Department of Labor would result in a mandatory
liquidated damage penalty while cases brought in the private sector
would result in a penalty that was awarded at the discretion of the
courts. This fairly well mirrors the intent and outcome of that
penalty statute, as well.
CHAIRMAN MACKIE asked Senator Donley if he maintained his
objection.
SENATOR DONLEY replied yes.
CHAIRMAN MACKIE called for the roll. SENATORS LEMAN, KELLY, and
MACKIE voted yea; and SENATOR DONLEY voted nay. The amendment was
adopted.
CHAIRMAN MACKIE asked if there was any further testimony and there
wasn't.
SENATOR LEMAN moved to pass CS SB193 (L&C)from committee with
individual recommendations. There were no objections and it was so
ordered.
| Document Name | Date/Time | Subjects |
|---|