Legislature(2003 - 2004)
05/12/2003 03:20 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
SB 210-WAGE AND HOUR OVERTIME COMPUTATION CHAIR ANDERSON announced that the first order of business would be SENATE BILL NO. 210, "An Act regarding the computation of overtime compensation by employers before June 2, 1999; and providing for an effective date." Number 0162 JANE ALBERTS, Staff to Senator Con Bunde, Alaska State Legislature, presented SB 210 on behalf of its sponsor, Senator Bunde. Ms. Alberts paraphrased from the sponsor statement, which reads as follows [original punctuation provided]: This legislation is designed to protect Alaska employers who properly calculated overtime wages for their employees prior to the effective date of Ch.43, SLA 99(HB201), and correct an erroneous judicial interpretation of Alaska's Wage and Hour Act. In 1999 the Alaska Legislature passed HB 201 dealing with the issue of wage "pyramiding" (paying overtime wages more than once for the same hour of overtime work). Unfortunately, a last minute amendment deleted the Act's retroactive effective date (April 1, 1997). Though future claims were clearly precluded, those claims existing on or before the effective date of HB 201 remained active. As a result several employers were sued for calculating overtime wages exactly how the Alaska Department of Labor had instructed them to do it. Every other business in the state used the same method. This measure, once and for all, brings certainty to the interpretation of computing overtime under Alaska's Wage & Hour Act. These changes are consistent with both concerns and policy goals expressed by the Legislature in the enactment of Chapter 43, SLA 99 and official State Department of Labor practice going back to pre-statehood. CHAIR ANDERSON informed the committee that per Mason's Manual, these court cases can't be spoken of directly. Therefore, he instructed the committee not to ask questions on those court cases. REPRESENTATIVE GATTO inquired as to how much money is involved in these pending cases. MS. ALBERTS answered that although she didn't believe it had been determined, it could potentially be a large sum of money. In fact, she believes that these could potentially become class action suits. Number 0383 GREG O'CLARAY, Commissioner, Department of Labor & Workforce Development (DLWD), testified in favor of SB 210. He related that in his nearly 40 years of representing workers, negotiating labor contracts, and interpreting the law with respect to employment, he has never seen a decision as odd as this. [The judicial interpretation] requires an employer to pay the employee twice for the same hour [when there are overtime hours]. He related his understanding that potential exposure to the companies in the pending cases could amount to several hundreds of thousands of dollars. He urged the committee to pass this legislation along. REPRESENTATIVE GATTO surmised that in some cases some of the overtime would be time and a half, but as the employee accumulated over 40 hours the pay would be double time. Therefore, if an employee was paid six hours of overtime on Monday, the employee would be pushed over the 40-hour limit and thus requiring one hour of double time rather than time and a half. He asked if the aforementioned has ever intervened in any of these cases. COMMISSIONER O'CLARAY remarked that it's worse. If an employee works six hours of overtime on Monday in a five-day workweek and the employee works eight hours a day for the remaining four days, the employee would be paid six hours of overtime on Monday and under this court ruling at the end of the week the employee would be time and a half again. Therefore, the six hours of overtime would be paid triple time, although the statute only requires time and a half after eight hours [in a day] and after 40 hours [in a week]. Through this judicial interpretation the employers were being hit twice for the same number of hours. In further response to Representative Gatto, Commissioner O'Claray said [this legislation] doesn't deal with double time. Number 0587 JOHN SHIVELY, Vice President, Government and Community Relations, Holland America, informed the committee that Holland America is one of the companies that was sued [as a result of this judicial interpretation]. Mr. Shively reviewed the long and tortured legal history of the case against Holland America. The original claim was $21 and Holland America paid it. However, the [Alaska] Supreme Court ruled that it could be turned into a class action suit, which is the case now. A class action suit could expose Holland America to millions. Mr. Shively related that Holland America doesn't believe there is any legal impediment to making the law passed in 1999 retroactive, which legislative legal counsel agrees. Therefore, Mr. Shively requested that SB 210 be passed on. CHAIR ANDERSON commented on the absurdity that this could happen. Number 0615 MR. SHIVELY noted that in the other case the judge came to the opposite conclusion. REPRESENTATIVE GATTO asked if the statute specifies that an employer "shall" pay time and a half overtime for hours in excess of eight hours a day and overtime in excess of over 40 hours a week. He asked if that was the difficulty. MR. SHIVELY said that it was a wording problem that was open to some judicial interpretation, but never any administrative determination. "It's the way wage and hour laws have been interpreted by the state since statehood, before statehood, and by every other state in the union," he said. REPRESENTATIVE GATTO said that is a very compelling argument if the language was such that it used "and". MR. SHIVELY reiterated that a different judge came to the opposite conclusion when reviewing the same language. Furthermore, when the legislature discovered this, the legislature went back and made the language very specific. He said that [this legislation] merely places the retroactive clause back in. REPRESENTATIVE GUTTENBERG surmised that other types of overtime problems are sunsetted out or not applicable to this [legislation]. Number 0830 DAVE OESTING, Attorney at Law, Davis, Wright and Tremaine, informed the committee that the separator in the statute was "or" not "and", which gave rise to the confused interpretation. Number 0875 DON ETHERIDGE, AFL-CIO - Alaska, announced that he is present to relate the AFL-CIO's support of SB 210 as it did of the original legislation in 1998. The AFL-CIO doesn't believe that employees should take advantage of loopholes any more than employers. Number 0988 REPRESENTATIVE ROKEBERG turned attention to the April 22, 2003, memorandum from Barbara Craver, Attorney, Legislative Legal and Research Services. He asked if there is Alaska case law regarding whether a retrospective activity could be undertaken if there wasn't a final judgment as it relates to the due process rights. MR. OESTING said there is only one such case, a land regulation property tax dispute in Homer, and it would be favorable to the position Ms. Craver takes. He related that Ms. Craver's position is that the legislature may retroactively legislate this matter because there is no absolute vested right until the final judgment occurs, which isn't the case in this situation. REPRESENTATIVE ROKEBERG inquired as to the equal protection arguments with regard to a compelling state interest. MR. OESTING opined that the equal protection arguments wouldn't be applicable in this situation because there is no irrational decision made by the state in an area in which the state is legally competent to regulate. In this situation, there was a derelict decision that came to a strange conclusion and retroactively was amplified into a potential class action. No one heretofore has sought or been granted the type of protection that this plaintiff was awarded by the trial court in its initial determination in the case. REPRESENTATIVE ROKEBERG asked if it could be determined that the judge had found that the legislature had made a mistake. MR. OESTING agreed that the above could be said, but other judges have come to the opposite conclusion on this case. Number 1069 REPRESENTATIVE ROKEBERG pointed out that the legislature drafts the statute and when the judges interpreted it there were conflicting interpretations. He inquired as to why HB 201 had to be introduced to correct language if the statute wasn't defective. MR. OESTING agreed that the fault would initially lie with the legislature which wrote the statute in an ambiguous manner [that resulted in] two courts arriving at different conclusions. REPRESENTATIVE ROKEBERG turned attention to the impairment of property rights for retroactivities. MR. OESTING said that the above is a due process concern. When a legal provision becomes, as a matter of law, a term of every contract, it brings with it the ability to be removed or altered to any contract in which it is included so long as the rights under that legal provision haven't been reduced to a final judgment. The aforementioned is the situation in this case and is one of the main thrusts of arguments with regard to defamation of property due process. It has been addressed in exactly the same context in three to four cases, including in the 9th Circuit by the Fair Labor & Standards Act, which is the federal counterpart to Alaska Wage & Hour Act. Consistently, the conclusion has been that absent a final nonappealable judgment that statutory formulation can be revoked even if expressly revoked because of an ambiguity in the original statute. CHAIR ANDERSON, upon determining no one else wished to testify, closed public testimony. Number 1205 REPRESENTATIVE DAHLSTROM moved to report SB 210 out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, it was so ordered.
| Document Name | Date/Time | Subjects |
|---|