Legislature(2003 - 2004)
04/14/2003 03:22 PM House L&C
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 255-WAGES:TRAINING/FLEX-TIME/DEFINITIONS Number 700 CHAIR ANDERSON announced that the final order of business would be HOUSE BILL NO. 255, "An Act amending the Alaska Wage and Hour Act as it relates to flexible work hour plans, the provision of training wages, and the definitions of certain terms; and repealing the exemption in the Act from the payment of minimum wages for learners." Number 0845 REPRESENTATIVE ROKEBERG, as sponsor of HB 255, testified that the bill covers three sections of the Alaska Wage and Hour Act [AS 23.10.050-150] and the related regulations. He said HB 255 adjusts the definitions of who is management, looks at flexible work hour provisions, and revises the provisions for training wages [for workers less than 20 years of age]. Number 0900 FRANK ROSE, President, Alaska Hotel and Lodging Association; Owner, Alaska Lodging Management, spoke in support of HB 255. He testified that Sections 1 and 2 of the bill realistically define executive, administrative, and professional positions as they relate to exempt employees and overtime status. He said the bill also makes the definitions consistent with federal law. He said that is a very important [factor] in his business operations. Section 3 of the bill provides for long-overdue changes to the voluntary flexible work hour plan, allowing flexible work hours [simply] upon agreement [after] filing [paperwork with the Department of Labor] for the flexible work hour [plan]; approval usually involves a rubber stamp [by the department]. The [law] assures that the employer and the employee agree on the terms of a 40-hour work week, [usually] with four 10-hour days. And lastly, he noted, the hospitality industry supports changes to the training wage legislation that give employers more opportunities to train young people in new work environments. He said that businesses need to be able to employ young people for full work weeks so that they can be given the training. [Current regulations limit youth on lower wages to 30 hours per week.] This provision provides an incentive to hire [young] people who don't have experience and who wouldn't otherwise be hired, he said. Number 1024 REPRESENTATIVE ROKEBERG asked Mr. Rose to explain what he meant by getting the voluntary flexible work hour plan rubber-stamped. MR. ROSE explained that two of his companies have needed flexible work hour plans. They filled out the forms and sent them to the Department of Labor; and two weeks later they came back approved. He confirmed that they were for 4-day, 10-hour work weeks. REPRESENTATIVE ROKEBERG commented that the Department of Labor will approve 4-day, 10-hour work weeks but nothing else. He noted that working parents are demanding more flexibility in their schedules so they can look after their children. He asked if that worked for his industry. MR. ROSE replied yes, and that it's a real incentive for an employee if they can [get these flexible hours]. He said it benefits the employer as well. Number 1085 CHAIR ANDERSON asked his thought about AS 23.10.055(11), which exempts from Alaska's minimum wage youth who are under the age of 18 and work less than 30 hours a week; they can be paid at the lower rate of $5.15 per hour. He asked Mr. Rose how he would respond to folks who protest being hired at the lower wage. Number 1140 MR. ROSE said that businesses are providing a service to young people; training that individual to do the job is pretty intensive. He said that many employers would prefer to hire an experienced person to do the job. The question is whether these hires are just to save money. He assured the committee that the [employer's] effort to train a 17-year-old to be a productive worker is a public service. Number 1169 JON FAULKNER, Owner/operator, Land's End Resort; Van Guilder Hotel, explained that he has run these hotels for 14 years. He said he employs 125 people in the summertime and roughly 75 in the winter. Land's End Resort is the largest private sector employer in Homer; Homer is perennially one of the areas of highest unemployment in the state. He said he knows what it means to put people to work and the effort it takes to stay open in the wintertime. MR. FAULKNER said he supports HB 255, Sections 1 and 2 in particular. He stressed that it is critical to clarify and define what is supervisory, professional, and executive. He said he has been sued [over the definition of supervisory] and lost and came close to filing bankruptcy [to pay the court- ordered damages] in the case, Land's End v. Chase. He stated that when these cases are settled, they cost the industry millions of dollars every year and are a lawyer's delight. The current Alaska law [AS 23.10.055. Exemptions] varies so far from the federal law that employers [are handicapped by] very ambiguous definitions of supervisory. His case involved his restaurant manager who operated a year-round restaurant with 65 employees, who hired and fired staff, and negotiated $200,000 purchase contracts with vendors. Yet in the wintertime, when the business fell down to 15 dinners a night, she managed the floor and kitchen from the hostess station. This manager proved that she spent more than 20 percent of her time standing in a hostess station, so the court determined that she did line level work and was not exempt from overtime pay. The result was treble damages and her lawyer's fees; he wrote a check for $100,000 that took him to the edge of bankruptcy. As a result, he placed every employee on hourly pay and refuses to hire anyone on salary. Mr. Faulkner said that this policy hurts employees because they don't qualify for certain benefits, and it restricts them in other ways. He said HB 255 affects independent, Alaskan-owned, and -operated businesses that are the backbone of rural economic development. REPRESENTATIVE ROKEBERG asked if he deals with the voluntary flex time issue. Number 1491 MR. FAULKNER replied that he uses flex time in his maintenance department, which has seasonal work. He said it helps people who have to work two jobs. He said the Department of Labor approval is very cumbersome. There is often a two-week delay in getting the paperwork back. He said he only uses the 4-10 work week, usually with maintenance, sometimes with security employees. CHAIR ANDERSON asked about the training wages as described in Section 4, page 5. MR. FAULKNER said he supported the concept, but pointed out troublesome language [lines 6-9] which read, An employer may not take an action to displace an employee, including partial displacements such as reduction in hours, wages, or employment benefits, for purposes of hiring individuals at the wage authorized in this subsection. MR. FAULKNER explained his point with the example of hiring a maintenance or server trainee. Two months later, he reduces hours, because [in the hospitality industry, the employer] is always changing the staff levels. A disgruntled employee will point out that his hours were reduced so that another employee could be hired at the training wages. He warned that this language will create exposure for the employer. Ninety days is not very long to have someone at a training wage. He suggested making certain positions eligible for training wages. Number 1609 REPRESENTATIVE GUTTENBERG asked two questions about the benefits Mr. Faulkner offers to his hourly and salaried employees. Number 1642 MR. FAULKNER said he used to expect more of a salaried employee. When he stopped paying salaries, he no longer paid the benefits associated with salary positions. He confirmed that paying benefits is discretionary; the law does not require the employer to pay benefits. He said he had offered his salaried employees health benefits of a reimbursable type. KAREN ROGINA, Alaska Hospitality Alliance, explained that her organization includes the Alaska Hotel and Lodging Association, the Alaska Restaurant and Beverage Association, and the Alaska Hospitality Alliance Education Foundation. She testified in favor of HB 255. She said her membership includes over 80 percent of the lodging rooms in the state and over 100 food and beverage operations in the state, employing over 20,000 Alaskans. She said that employees in the industry gain valuable work experience that readily transfers to other industries. According to the National Restaurant Association, over one third of the labor force today in the United States got its start in the hospitality industry. "We are the training ground of America's work force," she said. MS. ROGINA said she supports HB 255 because it encourages employment and the development of workers in the industry while protecting the slim profit margins of the members' operations. She testified that the current statute discourages employment growth and development while eroding bottom-line profits. Given the recent changes in the wage and hour law [mandating an annual cost of living adjustment in the minimum wage], the current economic downturn has also been very hard on the industry. She noted that the alliance recently commissioned a study to quantify the impacts of the economic downturn and the minimum wage law. She added that anecdotal information shows that employees are being laid off, employee benefits are being cut, vacation packages are being cut, and fewer workers under the age of 21 are being hired because of these factors. She stated that HB 255 encourages the development of employees, and she urged the committee to pass HB 255 out of committee. Number 1845 REPRESENTATIVE ROKEBERG asked her opinion of the current training wage provision that allows young people to work 30 hours a week. MS. ROGINA replied that the current statute allows young people [up to age 18] to be paid $5.15 an hour, up to 30 hours a week. She cautioned that if they work beyond 30 hours a week, there isn't a mechanism in place to track those hours and send up an alert. This [bill] changes that to 40 hours a week, and every employer has that mechanism in place to identify when an employee hits the 40-hour limit [for purposes of computing overtime]. So, administratively, this is a lot easier to put into place, she said. The increase [in the age limit from 18 to 20] years opens up a pool of young people who need that experience in the workforce and the opportunity to ascend [the job ladder]. CHAIR ANDERSON asked about a 17-year old working at Wendy's 20 hours a week. He asked her to explain how that works. Number 1915 MS. ROGINA said that currently they can be paid the training wage only if they work less than 30 hours ongoing. In the summertime, they might work more hours. It's so difficult to track [the 30 hours] that people just don't do it. CHAIR ANDERSON confirmed that if young person works one hour more than the 30 hour [limit], all 31 hours must be paid at the higher [minimum] wage. He asked what happens when the young worker turns 20 if this bill passes. MS. ROGINA explained that if a 19-year-old works at the training wage for a month, when she turns 20, she would have to be paid at the higher wage. She confirmed that HB 255 allows for 40 hours a week for the first 90 days. Number 1972 REPRESENTATIVE GUTTENBERG asked what percentage of employees fit into these definitions of summer or seasonal hires and would be eligible for the training wage. MS. ROGINA said that information is not currently available, but the Alaska Hotel and Lodging Association recently commissioned the McDowell Group to do a study that quantifies that kind of detail. REPRESENTATIVE GUTTENBERG asked how many of the young people hired in this industry are non-Alaskan, summer travelers. MS. ROGINA replied that she didn't know but would find that information and send it to him. Number 2024 REPRESENTATIVE ROKEBERG noted that he didn't want to be accused of running a child sweatshop. He asked Ms. Rogina if she thinks this wage can be used properly to train young people for a job. Is there anything in the bill that prevents paying a teenager at the higher wages, he asked. MS. ROGINA said HB 255 allows the market to [determine] what young people are paid. Within 90 days, the employer has a good sense of the value of that employee. She said there's high turnover in the beginning. Number 2079 REPRESENTATIVE ROKEBERG said that if an employer hires a young person at the lower wage who proves of value, the employer might raise the wage immediately to the $7.15 or above to hang on to a good employee. He also asked whether the flex-time provisions will help her member employers hire working parents who need schedule flexibility. MS. ROGINA said absolutely, especially on the hotel side, which is a [round the clock] industry as is the case in restaurants as well. The industry hires a lot of people that have unique scheduling requirements. Offering employees flexible schedules allows them to fit into the workforce more readily. REPRESENTATIVE ROKEBERG confirmed that some of her larger hotels and restaurants have union employees, and that some of the union contracts allow for split shifts. He asked if they are exempt from the Wage and Hour Act because they have collective bargaining. MS. ROGINA said that union contracts often negotiate this kind of flex time. But nonunion employers are also able to, so this levels the playing field. CHAIR ANDERSON noted that the rest of the people in the committee room were willing to wait until the next meeting to testify. He noted that HB 255 will be held over.
| Document Name | Date/Time | Subjects |
|---|