04/08/1998 03:15 PM House L&C

SB 268 - WAGE CLAIM ASSIGNMENTS TO DEPT. OF LABOR                              
                                                                               
Number 0489                                                                    
                                                                               
CHAIRMAN ROKEBERG announced the committee's next order of business             
was SB 268, "An Act relating to the assignment to the Department of            
Labor of certain wage claims; and providing for an effective date."            
                                                                               
Number 0505                                                                    
                                                                               
ANNETTE KREITZER, Legislative Assistant to Senator Loren Leman,                
came forward to testify.  She stated that currently under AS                   
23.05.220(c), the Department of Labor (DOL) is authorized to accept            
claims of unpaid wages in amounts up to $5,000.  These are claims              
for unpaid last paychecks, failures to pay entirely, or failure to             
pay amounts due by contract.  Such claims are often settled                    
administratively, but when that is not possible the department                 
files the matter in small claims court.  She stated it is just                 
$5,000 the way the current statute is written, noting legislation              
last year increased the small claims limit to $7,500 (chapter 33,              
SLA 1997).  In the Senate Labor and Commerce Standing Committee she            
stated there was a question about the DOL being essentially a                  
collection agency for the state.  She referred to a letter in the              
committee members' packets from the DOL commissioner's office                  
speaking to that issue to satisfy the concerns of the Senate Labor             
and Commerce Standing Committee.  She stated the DOL does not, and             
is not statutorily authorized, to collect a fee, and no one from               
the Senate committee addressed any further concerns after receipt              
of the DOL's letter.  The March 2, 1998, letter from Dwight                    
Perkins, Special Assistant, DOL, reads:                                        
                                                                               
     During the Department of Labor's February 24th testimony                  
     on SB 268, Senator Kelly asked if the department charged                  
     a fee for collection wages owed to employees.  The answer                 
     is "no."                                                                  
                                                                               
     AS 23.05.060(4) specifically prohibits the Department of                  
     Labor from charging employees for instituting court                       
     proceeding against an employer, and there is no authority                 
     in Chapter 23 statutes to charge a fee to the employer.                   
                                                                               
     Under AS 23.05.190, the Department is required to                         
     investigate possible violations and institute actions for                 
     penalties.  In addition to the actual wages collected,                    
     all civil penalties are paid to the employee.                             
                                                                               
     AS 23.05.210 states, "The attorney general may prosecute                  
     a civil case arising under this chapter that is referred                  
     to the attorney general by the department for that                        
     purpose."  Both the Department of Labor and the                           
     Department of Law agree that rather than tie up the                       
     Attorney General's office, Small Claims Court should be                   
     utilized whenever possible.  However, AS 23.05.220(c)                     
     limits acceptable claims to $5,000 or less.  The Small                    
     Claims Court's maximum is now $7,500; hence this bill                     
     would allow the Department of Labor to gain the maximum,                  
     and most-cost efficient use of Small Claims Court.                        
                                                                               
Number 0595                                                                    
                                                                               
REPRESENTATIVE JOE RYAN asked how much this was in excess of the               
maximum amount and how much the DOL was going to collect.                      
                                                                               
MS. KREITZER indicated the amount in excess would be $2,500, up to             
the small claims limit of $7,500.                                              
                                                                               
Number 0609                                                                    
                                                                               
CHAIRMAN ROKEBERG added that he would suspect that is because the              
legislature adopted (indisc.) to move that limit up, and so if                 
there is any further adjustments in that rate, this remedial                   
legislation would not be necessary.  He asked Ms. Kreitzer if that             
was correct.                                                                   
                                                                               
MS. KREITZER answered in the affirmative.                                      
                                                                               
CHAIRMAN ROKEBERG asked if Mr. Dwyer had anything to add.                      
                                                                               
Number 0623                                                                    
                                                                               
AL DWYER, Director, Division of Labor Standards and Safety,                    
Department of Labor, replied he could not add anything to what had             
been said.                                                                     
                                                                               
Number 0648                                                                    
                                                                               
REPRESENTATIVE BRICE made a motion to move SB 268 out of committee             
with individual recommendations and zero fiscal note.  There being             
no objection, it was so ordered.