Legislature(2003 - 2004)
04/16/2003 03:20 PM House L&C
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* 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 2063 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." The committee took a brief at-ease from 4:18 to 4:20 p.m. Number 1992 REPRESENTATIVE ROKEBERG moved to adopt Amendment 1 which read: Page 2, Line 4: Delete: "solely" Page 3, Line 16 and 17: Keep in statute: "and the written agreement has been filed with the department" REPRESENTATIVE LYNN objected for purposes of discussion. Number 1963 REPRESENTATIVE ROKEBERG explained that removing the word "solely" on page 2, line 4, helped clarify the definition of supervisory capacity. He addressed the other change, on page 3, lines 16-17. The amendment restores the current statutory language, "and the written agreement has been filed with the department", which was mistakenly removed, he said. He reviewed the affect of the amendment: after an employer and employee agree to a voluntary flexible work hour plan, a copy must be filed with the department [of Labor & Workforce Development] so [department staff] can audit it. CHAIR ANDERSON reminded committee members that this is a technical amendment. REPRESENTATIVE ROKEBERG explained that the flex-time plan needs to be filed with the department; [removing it from the bill] was an oversight on his part. REPRESENTATIVE GUTTENBERG asked about the impact of deleting "solely" from the language [about supervisory capacity] on page 2. Number 1904 HEATHER NOBREGA, Staff to Representative Norman Rokeberg, Alaska State Legislature, explained that there was a request to delete "solely" so that the work of supervisory employees would not be limited to assigning and directing the activities of subordinates. She said that removing the word "solely" gives the [employer] more flexibility in the duties the supervisor can perform. CHAIR ANDERSON explained that the assigning and directing duties would no longer be all-inclusive, whereas solely makes them all- inclusive. REPRESENTATIVE ROKEBERG said that the amendment speaks to the allocation of a supervisor's time between supervisory and other duties. The word solely implies only supervisory duties. He said as written, the current statutory wording is too tight. REPRESENTATIVE GATTO suggested [substituting] the word "primarily" for "solely." Number 1835 REPRESENTATIVE LYNN removed his objection to Amendment 1. CHAIR ANDERSON confirmed that Representative Guttenberg did not object to the amendment. There being no other objections, Amendment 1 was adopted. Number 1777 DON ETHERIDGE, Lobbyist for Alaska State AFL-CIO, testified that his group opposes the entire bill, even with Amendment 1. He spoke against removing the department's [approval] of the voluntary flexible-hour work plan. He said [simply] filing a piece of paper with the department doesn't give an employee the backbone to stand up against an employer who might say, "Here, sign this if you want the job," or, "If you don't want this to be your last day, here, sign this piece of paper." He stated that there are unscrupulous employers who would do such a thing. MR. ETHERIDGE also opposed the training wage portion of the bill. He said this provision fleeces working kids who are trying to make money for school or to buy their own cars. The 30 hours a week allowed by the current statute is already too much. "To push [those 30 hours] to a full-time job -- we don't believe in it," he said. Union apprentices start at $13 or $14 an hour; he said that they need to make a decent living. He predicted that a young person with a 90-day summer job at training wages would wind up working the next year for another employer at $5.15 for another 90 days. If young workers don't go back to the same employer, they could end up working forever at $5.15 an hour, he cautioned. He concluded that his organization is totally opposed to HB 255. Number 1648 CHAIR ANDERSON asked what happens when a young person works for a new employer after receiving training wages at a previous job. REPRESENTATIVE ROKEBERG said that once a young person has some experience, the person doesn't need to be trained [again]. He said there is so much demand for experienced, hard-working young people, that the [teenager] would [easily] find work at a higher wage. He said he doesn't think kids are going to be fleeced in the current labor market. This bill provides an opportunity for more jobs for young people. He said that the 30-hour rule doesn't change [under HB 255]. There has been testimony that it's difficult for employers to use [the 30-hour per week maximum for training wages] because of paperwork and accounting problems. This [bill] provides for a longer [work] period of [40 hours per week]. Number 1540 MR. ETHERIDGE stated that grocery stores hire lots of kids at training wages for 30-hour weeks. They box [groceries] and stock [the shelves]. He disagreed that it's that difficult to track a young person's time for the 30-hour [limit]. REPRESENTATIVE ROKEBERG said he's not repealing the 30-hour provision in [regulations]; it's still there. MR. ETHERIDGE countered that the 30-hour [work week] is being expanded to 40 hours, which he opposes. Number 1502 REPRESENTATIVE GUTTENBERG asked how the 90 consecutive calendar days, on page 5, [line 5,] is calculated. MR. ETHERIDGE agreed that calculation of the 90 consecutive days is another concern. He asked if a young worker misses some time or gets laid off, does the 90 consecutive day [clock] start over. REPRESENTATIVE GATTO said he interprets the language to mean that 90 days after the young person starts work, the worker no longer qualifies for the [training wage]. He asked what other interpretation of this provision is possible. MR. ETHERIDGE gave the example of problems currently experienced by some of the state [workers]. They have to work 195 consecutive days to get bumped up. He said that if they miss a day at work, their supervisors [reset the 195-day clock]. That practice is going on right now, he said, and that's why he's concerned. REPRESENTATIVE ROKEBERG asked if people covered by collective bargaining are exempt from the Alaska Wage and Hour Act and these provisions. MR. ETHERIDGE said that collective bargaining can exempt some of the [provisions of state law]. But collective bargaining agreements can't exempt the payment of minimum wage and can't exempt working over 10-hour days, he said. Number 1364 REPRESENTATIVE ROKEBERG stated that collective bargaining workers are exempt under the current Alaska Wage and Hour Act. He said they are governed by their collective bargaining agreement, not the statute. Number 1354 REPRESENTATIVE CRAWFORD pointed to subparagraph (14)(B), page 3, lines 18-25, and said that this language limits ironworkers to the "four-tens" workweek under their collective bargaining agreements. He said the "four-tens" [represents the maximum] flexibility before overtime [provisions take effect]. REPRESENTATIVE ROKEBERG explained that it's part of the bargaining agreement. REPRESENTATIVE CRAWFORD replied that no, [this requirement] is not part of the bargaining agreement; it is in statute. The "four-ten" workweek is the only flexible schedule ironworkers can use, other than the five-day, 8-hour week. [Union employees] are not exempt from the statute. He said, for example, that ironworkers can't work [a week consisting of] three 12-hour days and a 4-hour day. REPRESENTATIVE ROKEBERG said, "You make my case." Number 1295 REPRESENTATIVE CRAWFORD asked Representative Rokeberg if he intends to delete this part of the law so that jobs outside of collective bargaining can have any work schedule agreed to by the employer and the employee. He said he can support "four- tens" but not just any schedule that an employer wants. Number 1274 REPRESENTATIVE GUTTENBERG asked Mr. Etheridge if subparagraph (14)(B) [were removed from state law], could [an employer] work someone two twenty-hour ("two-twenties") days. MR. ETHERIDGE agreed. [An employer] could work the employee back-to-back weeks and get 40 hours in four days, if it was timed just right. REPRESENTATIVE GUTTENBERG described a theoretical situation at a cannery, in which the employer worked the staff "two-twenties," charged them room and board, resulting in pay lower than the minimum wage. He said the employee could owe the employer at the end of the week. Number 1229 REPRESENTATIVE ROKEBERG asked about organized labor's position on working parents and their need for flexible work time. MR. ETHERIDGE stated that his group supports every working person and does what they think is best for all of those folks. If several people need a specific [schedule] change, it doesn't mean that the whole contract is changed to accommodate them. One of the main rules in negotiations is looking at the good of the [whole group], not just the good of the few. Number 1167 CHIP WAGONER, Lobbyist for Alaska Catholic Conference, explained that the conference is the voice of the three Roman Catholic Bishops of Alaska, who represent 55,000 Alaskans, and 100 parishes and missions. He noted that the Catholic Church nationally has been an advocate for the minimum wage since 1919, fully two decades before the federal law was passed. Mr. Wagoner explained that Catholic social teaching flows from the Bible and the Gospels, and he quoted Jesus as saying, "The Spirit ... has sent me to bring glad tidings to the poor." He emphasized that work has dignity and is a way for people to meet their community obligations and their material needs. He said in order for a person to have a dignity of life, they must have a living wage sufficient to provide adequate housing, shelter, healthcare, and food. That's why, in 2001, the Alaska Catholic Conference endorsed the increase to the minimum wage and the indexing provision. MR. WAGONER spoke to Section 4, of HB 255, Training Wages. In considering any legislation, he reported that the church evaluates the affect of the bill on the poor and what it does to help the poor to help themselves. According to the Department of Labor & Workforce Development, about 14,000 to 15,000 Alaskans earn minimum wage. At the national level, 72 percent of those on the minimum wage are 22 years or older. [Therefore], he concluded that HB 255 would affect approximately 3,300 people in Alaska. Number 0960 MR. WAGONER stated that HB 255 takes $2 out of the pockets of these 3,300 people, who are at the bottom of the economic ladder, and puts it into the pockets of people who are not at the bottom of the economic ladder. There's a difference between a job with training sessions and on-the-job training. He said he has been a cook, a janitor, a highway worker, and a seafood processor, and in all of those jobs, he worked hard. He said that even though he was a new employee, he deserved to be paid the same amount as the person standing next to him because it was on-the-job training. He observed that generally, the new worker is being trained by fellow workers. He said there hasn't been any testimony that describes the so-called training that requires the employer to pay the new worker $2 less an hour, which is a substantial amount. MR. WAGONER also raised issues of equity. He used the example of two new employees hired at McDonalds -- one is 19 years old and the other is 20. One earns $7.15 a hour and the other gets paid $5.15. There's no equity there, he said. He also described the situation of a 32-year-old woman, a single mom who doesn't have a lot of job skills but needs the work. He asked whom the employer would hire in the summertime, someone for $7.15 an hour, or someone for $5.15 a hour. It creates an imbalance, he claimed. Young people will benefit but the people over age 20 won't be able to get the jobs. These unintended consequences are not good, he said. MR. WAGONER recommended that Section 4 [Training wages] be dropped from the bill. He said the conference has no problem with the rest of the bill and is not taking a position on it. He said his wife uses the flexible schedule. He applied to the department for those wages. Number 0807 REPRESENTATIVE LYNN identified himself as a member of the same church, but disagreed with Mr. Wagoner, saying that the bishops are expressing a political position rather than a moral position. He said he didn't remember seeing anything in scripture about minimum wage. He agrees with Mr. Wagoner's point about the dignity of work and the right to work for a living, decent wage. MR. WAGONER noted that preference for the poor and vulnerable is a tenet of Catholic social teaching. The most often cited subject in the New Testament is service to the poor, he said. He recounted the story of the field manager who hired workers throughout the day and paid each one a full day's wage. He explained that each worker was paid the amount necessary to survive to the next day. CHAIR ANDERSON commented that the turnover rate is very high at fast food restaurants. There needs to be a balance for the business owner, too, he said. Number 0562 MR. WAGONER described a local business in town that pays its workers more than minimum wage; this business doesn't have high turnover. If an employer treats the workers with respect, there is less turnover. There are some jobs that don't require a lot of training and people move [through the business rapidly]. People who have good key employees don't want to lose them. Some of these small-thinking businesses would rather have a revolving mill because they don't care. He reiterated that this bill is an attempt to take $2 out of the pockets of those people who need it the most. There's not a lot of training in these jobs, he said. Number 0470 REPRESENTATIVE ROKEBERG agreed with Mr. Wagoner's tenets about the dignity of work but took exception to his analysis. He said he believes that he is accomplishing Mr. Wagoner's [goals]. He said he intends to open opportunities for young people and give them an opportunity to become employed, to learn, and to progress. He said he believes in the marketplace; when employees prove their worth, they will be rewarded. He stated that he agrees with the enlightened self-interest style of management that treats employees well. He contended that people who had the training will be hired at a higher wage in a better position. REPRESENTATIVE ROKEBERG asked if the Catholic Church is against the current training wage for 16 and 17 year olds for 30 hours a week. This bill expands the current law to 18- and 19- year olds and allows them to work 10 hours more a week. He also said he was distressed that the Catholic Church was not supporting flexible schedules for working parents. He asked Mr. Wagoner to consider this provision and give it his support. He said of all the major employment issues in the country right now, single parents need to have flexibility in their workday. MR. WAGONER said he would take the flex-time issue back to the Alaska Catholic Conference. REPRESENTATIVE LYNN agreed with Representative Rokeberg's comments. Number 0204 REPRESENTATIVE GUTTENBERG thanked Mr. Wagoner for representing the church's position on HB 255. He said they agree that the best thing to give a person is a good job with good benefits. He said that undercutting the minimum wage by $2 an hour for 90 days because it's called training is bizarre. An employer learns a worker's worth in an afternoon, he opined. He asked Mr. Wagoner whether filing the flex-time request for his wife was difficult. Number 0128 MR. WAGONER replied that it was "a pain," a regulations hoop. This occurred seven years ago, for "four-tens", which the staff [at his wife's office] loves. If there was more flexibility [in the program], it would have been good to have a different set of hours, he said. REPRESENTATIVE GUTTENBERG commented that removing language on page 3, lines 18-25, [that requires department approval of any flex plan] opens the program to complete abuse [by the employer]. There are no restrictions regarding [what schedule an employer could demand], he said. An employer could work somebody two twenty-hour shifts in a row. Number 0027 MR. WAGONER said the goal of flex time is important, regardless of a person's side of the bargaining table. One reason he is a real estate agent is the flexibility of his schedule, [allowing him to drive his children to various events]. TAPE 03-37, SIDE A Number 0009 MR. WAGONER reiterated his opposition to training wages. Number 0033 REPRESENTATIVE GATTO used the example of his daughter who is a college sophomore and scans groceries at a large store in Wasilla. He said that she learned how to push groceries through a scanner in the first 45 seconds of her job. If she had been hired at a training wage, it would have been a way to pay her a lot less. He said he would favor paying $1 an hour less than the prevailing minimum wage for a maximum of 10 consecutive work hours. He asked Mr. Wagoner if he favored this approach. Number 0170 MR. WAGONER said he would go back to the Alaska Catholic Conference to ask the members' opinion. REPRESENTATIVE GATTO said he is considering offering an amendment that would modify the training wages. MR. WAGONER said $1 less for 10 hours is a total of $10 [saved]. The working college student is a good example, he recalled using the money he earned in the summer to pay for his next year of college. Number 0254 BARBARA HUFF TUCKNESS, Director of Legislative and Governmental Affairs, General Teamsters, Local 959, Alaska, testified against HB 255. She asked about the public outcry [for this change in the law]. With respect to the proposed definition changes [in Section 1], she noted that the federal government is considering changing its definitions and cautioned against Alaska incorporate [a changing federal definition]. She advocated state control -- rather than federal [dictates] -- over those decisions that affect working people. MS. HUFF TUCKNESS testified that she was very concerned about [changes in HB 255 in] flexible schedules. The Teamsters do not oppose flexible schedules, she said, but the bill in its current form allows an employer to direct an employee to work according to the particular needs of that employer. She said the Teamsters support [flexible schedules] with sideboards that protect the employees. She described dealing with employers, under collective bargaining agreements, who attempted to misuse the flexible schedule for the employers' convenience, not at the employee's request. She suggested the need for language that addressed that particular issue. The language [in HB 255] gives full power and control to any employer to implement a flexible schedule, [which could] negatively impact an employee's overtime hours. Number 0505 MS. HUFF TUCKNESS addressed the training wage issue. She discussed the bill with her 19-year-old son who told her, "Mom, at $5.15 an hour, I can't afford to put gas in my truck or pay for my insurance." She explained that at age 18, he was training the new, older workers at a parts store where he was employed. She said this is called a training wage, but it's not about training. These are workers coming in at minimum wage. The people get trained, and they move through the system; that's the purpose of the minimum wage. She said she doesn't know of any business that pays less than minimum wage that is able to keep children let alone adults in these positions. Number 0638 CHAIR ANDERSON said that a big group [of fast food restaurants] support this bill. He said that there's the issue of fairness for the business owner who must make cuts in order to pay that minimum wage. The intent [of HB 255] is not to be punitive; he said that Representative Rokeberg is trying to work with businesses and assist in the spirit of employment. He asked how she would respond to a restaurant owner who wants to expand the [training wage work week by] 10 hours because [most] kids leave before three months. Number 0727 MS. HUFF TUCKNESS replied that if this bill is a jobs creation bill, [accomplished by] reducing an employee's wage by $2 an hour, she doesn't agree with it. She said she doesn't believe that there will be kids who will work for $5.15 an hour. CHAIR ANDERSON restated Ms. Huff Tuckness's point that [HB 255] would hurt the business because kids would not work at that wage. Number 0809 REPRESENTATIVE GATTO mentioned the proposed $100 head tax as another [impediment] that would [discourage young people] from taking a job [at training wages]. REPRESENTATIVE ROKEBERG asked Ms. Huff Tuckness what wage her son was earning. MS. HUFF TUCKNESS said he was earning $9.25 an hour at the parts store. REPRESENTATIVE ROKEBERG read an [exemption] from the current overtime statute on page 3, line 11: "(13) work performed by an employee under a flexible work hour plan if the plan is included as part of a collective bargaining agreement;". He concluded that employees [covered by] collective bargaining are exempt from the provisions of the flexible work hour plan for overtime payment under Alaska statutes. He asked Ms. Huff Tuckness if that is correct. MS. HUFF TUCKNESS replied yes. She added that unions negotiate overtime that is applicable to any of these schedules. REPRESENTATIVE ROKEBERG asked Representative Crawford to comment on this provision. REPRESENTATIVE CRAWFORD replied that under his union's contract, employees can work "four-tens" under state law but they can't work [a week consisting of three twelve hour days and one four hour day] "three twelves and a four". Number 0951 REPRESENTATIVE ROKEBERG disagreed. He said union employees can work whatever [flexible schedule] they bargain; they are exempt under collective bargaining agreements. That's the whole point here, he said; all organized labor is exempt from these provisions. MS. HUFF TUCKNESS responded that whether the union represents 30 people or thousands, those workers are protected under the collective bargaining agreement with overtime rules and regulations as restrictive or as flexible as they need to be to accommodate the particular employer. That is those workers protection. She stated that there are still grievances, even with a contract in writing, over wages and schedules. She advised against [removing] the sideboards from the statutes. She [mischievously] suggested that organized labor should support the bill, creating the best possible organizing opportunity. She reiterated that the Teamsters are not here testifying against flexible schedules. She said that this exact issue was debated several years ago in Washington, D.C., and went down for the same reasons. When an employer looks at a flexible schedule, it's for totally different reasons than those of an employee. An employer's perspective is managing the workforce and getting the work product out in the most timely, efficient manner. Unfortunately, it is the workers who ultimately end up [paying the price]. Number 1100 JOHN ZULEGER, explained that he represented himself and other hard working, voting Alaskans who oppose HB 255. He put himself through college at age 18 and 19 by working these same jobs that the committee is discussing. He said at $5.15 an hour, he could not have done it without [taking out] loans and drawing on everybody else. He said it doesn't take 90 days to learn how flip a hamburger, make a bed, or mop a floor. It took him five minutes. Ninety days is the working season for the majority of people; it's the time they make their money. If they had to work for $2 an hour less, they couldn't survive. He said he now works in the road construction industry, which has a very short season. If he had to work for less than time and a half after eight hours, he said he couldn't survive either. He said the workers get the job done, and that's what it takes. He said that employers can't throw in other people and do the flex schedule; it's not productive. He said that the only support for this bill is from the business people who are going to benefit. He quoted average blue collar working persons who told him, "This is nothing but a bad deal for me," especially younger people working in the fast food restaurants and grocery stores. Number 1269 KAREN PLESS, Apprentice, International Union of Operating Engineers, Local 302, testified against HB 255. Taking money from the pockets of Alaskans hurts all Alaskans, including the businesspeople [whose interests] are represented in this bill, she said. She said that legislators, of all people, should be aware of the short working season; this is when a large segment of Alaskans make their yearly wages. She decried as unconscionable the idea that people under age 20 do not deserve a decent wage. Many of these individuals support families and pay child support, [difficult to do on] $5.15 an hour. She predicted that most of the committee will receive Social Security, but a lot of these people won't have Social Security by the time they retire. This bill will effectively take jobs away from Alaskans who cannot insist on [the minimum] wage. In her industry, she's protected. But employers can "pink slip" a worker [to avoid paying] overtime; they wouldn't have to give any reason to let the employee go. She encouraged committee members to think of all the people out there who don't have the protection that [Operating Engineers] Local 302 offers its members. Number 1348 JOHN BROWN, President, Fairbanks Central Labor Council; International Union of Operating Engineers, Local 302, explained that he represents almost 10,000 members. He testified against HB 255. The working families of Alaska do not need a pay cut. Alaska has gone from having the highest per capita income in the nation to the middle of the pack in the last 15 years; this bill will continue the erosion of wages for workers in Alaska, he cautioned. He said the testimony from the [hospitality] industry at the earlier hearing [indicated that] they want their employees to work more hours for less money. Currently all employers pay overtime and minimum wages on a level basis. This bill will allow some employers to pay less in overtime and less than the minimum wage. Many industries in Alaska are seasonal in nature and the employees in those industries depend on the overtime to make up for the lack of work. The reduced wage for 90 days in many cases would [pay] young workers at a substandard rate for their entire employment period. He quoted an earlier witness who testified that this legislation is needed for people who work two jobs. Mr. Brown commented that it's a very sad commentary on our state and our society that a person must work two jobs just to survive. This bill will push more workers in that direction. He said that collective bargaining agreements are not exempted [from state law]. He invited Representative Rokeberg to talk to specific attorneys and union officials. He said [employers with union contracts] must pay overtime on the same basis as everyone else. That right cannot be bargained away under state law. Number 1492 JOHN DAVID RAGAN, Laborers International Union of North America, Local 942; Ester Community Association; Volunteer fire fighter, Ester Volunteer Fire Department, opposed HB 255. He quoted Henry Ford who said that he wanted every worker in his factory to earn enough money to buy his or her own automobile. American workers making a decent wage, buying automobiles, houses, consumer goods, patronizing local businesses, sending their children to college, and raising families, has been the motor creating America's prosperity in the 20th century. That decent wage, as Franklin D. Roosevelt called it, was guaranteed by the great labor victories in the nineteenth and twentieth centuries. That decent wage is what makes the economy so different from third world countries like Mexico, where money is concentrated in the hands of a few people and the mass of people barely make enough to buy the basic necessities of life. Because the majority of people in many third world countries have no buying power, their economies have stagnated and are unable to develop. Because American workers were paid a decent wage, the U.S. became the economic powerhouse of the world. This legislation, HB 255, is a direct attack on the minimum wage and the 8-hour day, which the American labor movement fought for and died to make the law of the land in 20th century America. MR. RAGAN complained that he and many others came to the legislative [information] office on Monday to testify. Instead, the committee heard the testimony of paid industry lobbyists who spoke at length without any time limits, while [ignoring] normal working people in Fairbanks who could not travel to Juneau. Number 1585 CHAIR ANDERSON explained the time constraints on committee hearings and invited Mr. Ragan to submit written testimony which would be included in all legislators' bill packets when the bill goes to the House floor. MR. RAGAN replied that there were 15-20 people waiting to testify on Monday. CHAIR ANDERSON apologized for the delays. Number 1638 MATTHEW SAMPSON disagreed that HB 255 makes improvements to the Alaska Wage and Hour Act and argued that it is user-friendly for employers but not employees. He said this bill enables employers to make money off of the little guy. He said Section 3 undermines current overtime laws. The people voted to raise the Alaska minimum wage, which is different from the federal minimum wage for a reason. Mr. Sampson said that the written agreement between a newly hired employee and employer is all that's needed to reduce the [worker's] current overtime pay requirements. Nothing in this bill allows for oversight or that holds employers to a standard that prevents abuse. Number 1766 MR. SAMPSON said that the 8-hour day, 40-hour workweek came about in the 1930's for the benefit of the working man and the employer. He said it has worked for the last 70 years and is going to work for the next 70 years. [The 90-day training period in] Section 4 covers seasonal workers, and it's about the length of the summertime season in Fairbanks. It [appears that the bill is written] for the food processing and service industry employers who make most of their money in the summer off of cheap labor. He said he heard testimony from employers who stand to make money off this bill. He has yet to hear testimony from any employee who will make better wages as the result of this bill. He has yet to hear from any single parents who support the bill. He said it doesn't take too long to learn how to cut the head off a fish or how to make a bed. He understands training and learning, and that's why he's part of a union; he gets paid to get that training. The bill discriminates against people under the age of 20. Number 1915 CARL WEED opposed HB 255, which he described as regressive in helping workers, who are consumers, and also for the businessman who is selling products. He anticipated that the [results would ultimately harm the families of] the person working two jobs and the parent who owes child support. He said he could train any young person to put a pickle on a hamburger. CHAIR ANDERSON, upon hearing no one else wished to testify, closed the public hearing. Number 2030 REPRESENTATIVE ROKEBERG moved to adopt Conceptual Amendment 2. In Section 3 [page 3, line 17, after "department" from Amendment 1] add: and the plan provides that the work is for 80 hours in a two-week period and not more than 12 hours a day; REPRESENTATIVE ROKEBERG explained that now, the current rule is 40 hours in a week, but any employee can't make up any time missed. He said he used 12 hours because the current maximum is 10 hours, and it would be the maximum [allowed] in a flex-time provision. He said this provides additional sideboards so that when the [flex-time] contract is filed with the department, it would have a way to enforce the contract if there was a complaint. This [provision] avoids the "two twenties" [example cited earlier] which is absurd but makes a point. Number 2115 CHAIR ANDERSON, hearing no objections, said that Conceptual Amendment 2 was adopted. REPRESENTATIVE ROKEBERG said he would like to consult with people directly affected by the training wage, including some workers. State law has an existing 30-hour [per week] rule for 16- and 17- year olds. This bill relates to 18- and 19- year olds who could work [at training wages] for 40 hours [a week]. He said that because of the testimony and [his desire to avoid this becoming] a ploy for [employers of] summer or seasonal workers, he is considering lowering [the 90-day training period] to 30 days. He disagreed that a person could be trained in 10 hours, unless it [involves] scanning [groceries]. He said the intention is to hire people, to avoid the revolving door [of short-term employees], to get kids up to speed [in work skills]. The bill's purpose is not to relieve the employer of paying the [minimum] wage. He said he is not going to offer the amendment today, but he'll consider it for the next committee. CHAIR ANDERSON said he agrees with this [potential amendment]; it helps with one of the issues he has been trying to balance. Number 2221 REPRESENTATIVE ROKEBERG said that Section 1, with the definitions of supervisors and executives, defaults to the new federal regulations that are part of the bill packet. He pointed out the unintended consequence of a regulation [8 AAC 15.910. Definitions] by the Department of Labor & Workforce Development is that it requires anyone in an administrative category to be paid 2.5 times the minimum wage, that is, $17.88 an hour or $37,000 a year. This is a crushing blow to small businesses, he said, and needs to be corrected. He explained that the department offered to change the regulation, but this bill uses the language and the standards of federal law, which raise the wages [of administrative staff to a minimum of] $425 a week. He said he wanted to put this issue on the record. CHAIR ANDERSON said that he particularly agrees with the change [in Section 1]. No one has spoken in opposition to it, he said. Number 2280 REPRESENTATIVE ROKEBERG said that regulation forced the wage up to a very high level. If someone is building a resume, working into a managerial position, the person would only be making $10, $12, or $14 an hour, which is all a small business can afford to pay. He used the example of his own small business, in which he hired people out of the correctional institutions to give them a break and give them some managerial responsibility. But he can't afford to pay $17.88 an hour. It looks good on their resume, gives them good experience, helps put their lives together, and [allows them to] make a decent income. Representative Rokeberg said he shouldn't be forced by the law to have to pay somebody overtime if they work an extra 15 minutes, if they have a certain amount of responsibility over the other folks. It's just not fair, he said. CHAIR ANDERSON invited committee members to make closing statements. Number 2346 REPRESENTATIVE LYNN said the bill will help small business and help employees because [the businesses] will be able to afford to hire more employees. He advised caution so that it doesn't have unintended consequences. TAPE 03-37, SIDE A Number 2371 REPRESENTATIVE GUTTENBERG said he disagrees regarding the flex- time portion of the bill. The committee heard the bill; we heard arguments from the [hospitality] industry that it wanted a level playing field, which he called a bizarre statement. He said the bill leaves considerable difference between people who are covered by collective bargaining agreement and those who aren't. If an employee is covered by a collective bargaining agreement, the person has a contract and a representative who can come in and have a discussion with the employer. However, the [nonunion] employee may be given a form to sign agreeing to a flex-time schedule, and therefore in the end the person has no options. REPRESENTATIVE GUTTENBERG expressed concern with the training wage. In a minimum wage job, it doesn't take [a new employee] more than an hour to figure out how to bus dishes, cut fish heads, mop floors, or grind coffee. Employees make the business. If a business doesn't pay its employees what they're worth, if it hides behind a training excuse to reduce the minimum wage, he said he can't imagine that the business will be successful anyway. Tourism and food service are service industries. He recalled Mr. Wagoner's comments on the basic human dignity [of work]. Representative Guttenberg said that the best social service program is a decent job with a decent salary, with health and welfare benefits to take care of the worker and the family. He said this bill erodes that basic [role] of society. Number 2276 REPRESENTATIVE DAHLSTROM said for the record that this bill does not affect the basic minimum wage of $7.15 an hour. Number 2267 REPRESENTATIVE CRAWFORD apologized that he missed some of the testimony today and earlier that might have answered his questions. He focused on moving the training wage age from under 18 years to under 20 years. He said there was some [justification] for workers under age 18 because they had not reached the age of majority yet. But 18- and 19-year olds have reached the age of majority, and he said there might be grounds for an age discrimination suit, which he would prefer to avoid. He said he's still not certain whether changing the definition of managers affects their rights to overtime. If they give up their rights to overtime, do they still have minimum wage protection under this bill, he asked. He said he believes that a flexible work schedule is up to 10 hours a day. He would hate to see not having those sideboards [protecting workers] in the law. Number 2164 CHAIR ANDERSON said that Representative Rokeberg's staff just provided him with an analysis from Legislative Legal and Research Services to answer one of the questions. The federal law on minimum wage, 29 U.S.C. 026, already allows for training wages for newly hired employees less than 20 years old. REPRESENTATIVE ROKEBERG confirmed that [these items are contained] in the federal law. [Provisions in HB 255] clearly default to federal law. He reviewed for Representative Crawford the affect of Amendments 1 and 2 on the bill and his interest in a potential amendment to cut the training period back to 30 days. He commented that to make flex-time work, the employee needs longer than a one-week work period to make up time; most small businesses pay over a two-week work period. [This bill] provides more flexibility to make up time. Number 2103 REPRESENTATIVE CRAWFORD said he has worked many a 12-hour day and he knows that after 10 hours people get a lot more fatigued. [The number of hours in a work day] becomes a safety issue. He said that a 10-hour workday is flexible enough. A 12-hour workday is above and beyond a normal person's capacity to work except in an emergency situation. He said he still favors four 10-hour days in a 7-day period. Number 2062 REPRESENTATIVE DAHLSTROM moved to report HB 255, as amended, out of committee with individual recommendations and the accompanying fiscal note. Number 2038 REPRESENTATIVE GUTTENBERG objected. A roll call vote was taken. Representatives Dahlstrom, Rokeberg, Lynn, and Anderson voted in favor of HB 255, as amended. Representatives Guttenberg and Crawford voted against it. Therefore, CSHB 255 was reported out of the House Labor and Commerce Standing Committee by a vote of 4-2. CHAIR ANDERSON invited all witnesses who testified to submit written testimony to the next committee of referral, the House Finance Standing Committee.
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