03/11/2009 03:15 PM House LABOR & COMMERCE

HB 29-ALASKA MINIMUM WAGE                                                                                                     
3:20:34 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON announced  that the first order of  business would be                                                               
HOUSE  BILL NO.  29, "An  Act  increasing the  minimum wage;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
CHAIR  OLSON  announced  that  public  testimony  was  previously                                                               
closed for HB 29.                                                                                                               
                                                                                                                                
3:20:49 PM                                                                                                                    
                                                                                                                                
JENNIFER SENETTE, Staff, Representative  Kurt Olson, Alaska State                                                               
Legislature  offered  to  answer  any  questions  that  committee                                                               
members may have.                                                                                                               
                                                                                                                                
3:21:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HOLMES recalled  the  federal  and state  minimum                                                               
wages.   She  inquired as  to  whether both  minimum wages  would                                                               
apply to  all employers in Alaska.   She also asked  if employers                                                               
are required  to pay the  higher of the  two rates or  if certain                                                               
employers within the state were exempted.                                                                                       
                                                                                                                                
MS. SENETTE responded that higher  of the two minimum wages would                                                               
apply.   She pointed out that  some states have a  higher minimum                                                               
wage than the federal level.   In those instances, if an employee                                                               
is covered by  both, the person is entitled to  the higher of the                                                               
two minimum  wages.  She stated  that even without passage  of HB
,  in  July the  employee  would  be  entitled to  the  federal                                                               
minimum  wage.   The federal  minimum  wage law,  the Fair  Labor                                                               
Standards Act  (FLSA), applies to  employees of  enterprises that                                                               
have an  annual gross  volume and sales  of higher  over $500,000                                                               
and to smaller  firms involved in interstate  commerce.  However,                                                               
there are  exceptions to  the federal minimum  wage law,  such as                                                               
broad exceptions for  farmers or fishermen, which  are similar to                                                               
Alaska's  exceptions, but  include narrow  exceptions for  people                                                               
who work  at home such  as wreath makers.   She related  that the                                                               
Department  of Labor  &  Workforce  Development (DLWD)  indicated                                                               
some  confusion  currently exists  with  the  U.S. Department  of                                                               
Labor  (USDOL) since  the department  is in  flux.   Thus, it  is                                                               
difficult  to tell  which  exemptions at  the  federal level  and                                                               
state level  will apply.   She further  related she  will monitor                                                               
the federal policies that apply.                                                                                                
                                                                                                                                
3:24:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HOLMES said,  "It's pretty safe to  say that would                                                               
be  a pretty  small  universe  and the  vast  majority of  people                                                               
working in the state would  be covered under, would basically ...                                                               
be whichever one is higher."                                                                                                    
                                                                                                                                
MS. SENETTE  agreed.  She  explained that the  federal exemptions                                                               
were  not  reflected  in Alaska's  minimum  wage  would  probably                                                               
affect smaller numbers.  She  recalled the wreath makers who have                                                               
an exemption.                                                                                                                   
                                                                                                                                
3:24:53 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 3:24 p.m. to 3:26 p.m.                                                                       
                                                                                                                                
3:26:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HOLMES  made  a  motion  to  adopt  Amendment  1,                                                               
labeled 26-LS0177\A.3, Wayne, 2/27/09, which read:                                                                              
                                                                                                                                
     Page 1, line 14:                                                                                                           
          Delete "July 1, 2009"                                                                                                 
          Insert "January 1, 2010"                                                                                              
                                                                                                                                
CHAIR OLSON objected for purposes of discussion.                                                                                
                                                                                                                                
3:26:52 PM                                                                                                                    
                                                                                                                                
MS.  SENETTE  related that  throughout  this  process the  bill's                                                               
sponsor  has  heard  from  people throughout  the  state.    This                                                               
amendment addresses  the concerns  expressed by businesses.   She                                                               
stated that  Amendment 1  will help  businesses by  allowing them                                                               
adequate time  to budget  for the increase  to the  minimum wage,                                                               
and by  delaying the date to  January 1, 2010, will  also prevent                                                               
business owners from  having to start the summer  season with one                                                               
wage and then increase employee's wages on July 1, 2009.                                                                        
                                                                                                                                
3:27:55 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON removed his objection.                                                                                              
                                                                                                                                
There being no further objection, Amendment 1 was adopted.                                                                      
                                                                                                                                
3:28:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  COGHILL stated  he did  not wish  to hold  up the                                                               
bill.   He said that  he agrees with the  phasing in of  the bill                                                               
due to  the timing of  federal law  and the summer  industries in                                                               
Alaska.   He opined while he  does not agree with  minimum wages,                                                               
if an increase is favored  that instead of increasing the minimum                                                               
wage by $.50 cents, the minimum  wage could be increased by $.25,                                                               
especially  given the  downturn of  the economy.   He  maintained                                                               
that he will not try to hold up HB 29.                                                                                          
                                                                                                                                
CHAIR  OLSON offered  that he  has  not received  any calls  from                                                               
anyone who  likes HB 29.   He indicated that people  have thought                                                               
the proposed increase  in the minimum wage was  either not enough                                                               
or too  much.  He reminded  the committee that Alaska  has a long                                                               
history of placing its minimum  wage $.50 higher than the federal                                                               
minimum  wage.     He  offered  his  belief  that   he  has  made                                                               
concessions  with   respect  to  inflation  proofing   and  other                                                               
provisions  previously considered.    He opined  that  he is  not                                                               
happy with the  bill either, but the increase in  minimum wage is                                                               
reasonable.                                                                                                                     
                                                                                                                                
3:30:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  COGHILL  moved  to  report  HB  29,  Version  26-                                                               
LS0177\A,   as  amended   out   of   committee  with   individual                                                               
recommendations and the accompanying fiscal note.                                                                               
                                                                                                                                
There being no objection, the  CSHB 29(L&C) was reported from the                                                               
House Labor and Commerce Standing Committee.                                                                                    
                                                                                                                                
3:30:53 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 3:30 p.m. to 3:32 p.m.