Legislature(2019 - 2020)BARNES 124

03/27/2019 03:15 PM LABOR & COMMERCE

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* first hearing in first committee of referral
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Heard & Held
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Heard & Held
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+ Bills Previously Heard/Scheduled TELECONFERENCED
         HB 68-LABOR STDRS/SAFETY; WORKER COMPENSATION                                                                      
3:41:17 PM                                                                                                                    
CO-CHAIR LEDOUX announced  that the next order  of business would                                                               
be HOUSE BILL  NO. 68, "An Act relating to  the division of labor                                                               
standards  and  safety;  relating  to the  division  of  workers'                                                               
compensation; establishing  the division  of workers'  safety and                                                               
compensation; and providing for an effective date."                                                                             
3:42:11 PM                                                                                                                    
CATHY  MUNOZ,   Deputy  Commissioner,   Department  of   Labor  &                                                               
Workforce Development,  presented HB  68.   She stated  that this                                                               
bill  combines two  divisions within  the Department  of Labor  &                                                               
Workforce   Development   (DLWD),   the   Division   of   Workers                                                               
Compensation  (DWC)  and  the Division  of  Labor  Standards  and                                                               
Safety  (DLSS).   The  DLSS  is  primarily focused  on  workplace                                                               
accidents and enforcing  laws related to workplace  safety.  They                                                               
oversee  wage and  hour issues,  mechanical inspections,  and the                                                               
Alaska Occupational Safety  and Health (AKOSH) program.   The DWC                                                               
is  focused  on  the  efficient  administration  of  benefits  to                                                               
injured  workers  and  enforcing   laws  related  to  the  Alaska                                                               
Workers'  Compensation Act  [AS  23.30].   The  missions of  both                                                               
divisions  are  complementary,  they have  even  worked  together                                                               
historically.   She  reported that  HB 68  will further  increase                                                               
their   opportunities  to   remove   silos   and  capitalize   on                                                               
efficiencies  through  a  unified   management  structure.    She                                                               
further noted that when Dr.  Tamika Ledbetter was first appointed                                                               
as  the  department's commissioner  her  first  directive was  to                                                               
increase collaboration between divisions.                                                                                       
3:44:20 PM                                                                                                                    
CO-CHAIR LEDOUX asked for the meaning of "removing silos."                                                                      
3:44:32 PM                                                                                                                    
MS.   MUNOZ    indicated   that   "removing    silos"   signifies                                                               
collaborating across  divisions to enhance the  services provided                                                               
to  the   Alaska  public.     An  example,  she  said,   is  when                                                               
[Commissioner Ledbetter] directed the  Job Center network to work                                                               
closely  with Alaska  Vocational Technical  Center (AVTEC).   She                                                               
stated that  the department is cognizant  of the responsibilities                                                               
of each  division and there  is no  intent on changing  either of                                                               
their missions.                                                                                                                 
3:47:02 PM                                                                                                                    
GRAY  MITCHELL,  Director,  Division  of  Workers'  Compensation,                                                               
Department of Labor & Workforce  Development, began the sectional                                                               
analysis of HB  68.  He addressed sections 1  through 6, which he                                                               
explained are  name changes from  the DLSS to the  new division's                                                               
name, the Division of Workers'  Safety and Compensation.  Section                                                               
7  would  repeal  and  reenact AS  23.05.067,  service  fees  for                                                               
administration of  workers' safety and compensation  programs, to                                                               
reflect that  the new division  would receive reports  of certain                                                               
workers'  compensation  payments.    Section  8  would  amend  AS                                                               
23.10.080,  powers  and  duties  of the  division,  by  adding  a                                                               
paragraph to  incorporate the  workers' compensation  duties that                                                               
would be administered by the new  division.  Section 9 through 14                                                               
are  name  changes from  the  DWC  to  the new  division's  name.                                                               
Section   15  repeals   AS   23.30.002,   Division  of   Workers'                                                               
Compensation; director.   Section 16 is  a transitional provision                                                               
to account  for pending matters.   Section 17 establishes  a July                                                               
1, 2019 effective date.                                                                                                         
3:53:35 PM                                                                                                                    
CO-CHAIR LEDOUX inquired as to the purpose of the current bill.                                                                 
3:53:53 PM                                                                                                                    
MS. MUNOZ  replied that  the fiscal note  speaks to  the specific                                                               
3:54:02 PM                                                                                                                    
MR. MITCHELL explained that the  main purpose of the current bill                                                               
is to  combine two  divisions that  are currently  under separate                                                               
administrations and integrating them  so that enforcement actions                                                               
are   better  coordinated.     He   expressed  hope   that  their                                                               
integration would  produce a more  efficient delivery  of service                                                               
to the public.                                                                                                                  
3:55:20 PM                                                                                                                    
REPRESENTATIVE  HANNAN directed  attention to  section 15,  which                                                               
dissolved the director of the  division of workers' compensation.                                                               
She asked  if that position  is currently  filled and if  that is                                                               
the only position that would be terminated.                                                                                     
3:56:24 PM                                                                                                                    
MR. MITCHELL stated  section 15 repeals the  authority to appoint                                                               
a  director and  moves those  provisions under  section 7  in the                                                               
current  bill.   He  added  that  there  is  no current  plan  to                                                               
eliminate either director.                                                                                                      
3:57:48 PM                                                                                                                    
MS. MUNOZ noted the director of  labor standards and safety is an                                                               
unfilled  position and  the  deputy director  is  the manager  of                                                               
labor  standards and  safety  and  does all  of  the  day to  day                                                               
authority decision  making that happens in  that division, adding                                                               
that it is not their intent to change that.                                                                                     
3:59:10 PM                                                                                                                    
MR. MITCHELL  explained the fiscal  notes; Fiscal note  1; fiscal                                                               
note 2  is the labor  standards and safety division  fiscal note;                                                               
not laying any positions off but deleting 2                                                                                     
4:00:31 PM                                                                                                                    
CO-CHAIR LEDOUX asked where the savings  come from if no one will                                                               
be laid off.                                                                                                                    
4:00:43 PM                                                                                                                    
MS. MUNOZ  explained that it would  result as a reduction  to the                                                               
general fund support to the department.                                                                                         
4:00:54 PM                                                                                                                    
MR. MITCHELL said that the  positions that would be eliminated by                                                               
the current bill would be the  AKOSH program chief as well as the                                                               
assistant  chiefs  for  both  the  Enforcement  Section  and  the                                                               
Consultation and Training  Section.  He noted that  this would be                                                               
an effort  to flatten the  management structure by  eliminating a                                                               
position  in middle  management  and having  the deputy  director                                                               
take a greater role in managing the AKOSH program overall.                                                                      
4:01:51 PM                                                                                                                    
REPRESENTATIVE  FIELDS  asked  if  the AKOSH  chief  position  is                                                               
partially exempt or fully exempt.                                                                                               
4:02:00 PM                                                                                                                    
MR. MITCHELL stated that it's a classified position.                                                                            
4:02:12 PM                                                                                                                    
MR.  MITCHELL  stated  that  the other  position  that  would  be                                                               
affected is  a vacant office assistant  2 position.  The  idea is                                                               
that an office assistant would be  used to assist and assume that                                                               
position.   He noted that  there are two other  efficiencies that                                                               
are  planned.  One  is  to   reclassify  the  division  of  labor                                                               
standards  and safety  director position  to the  deputy director                                                               
position. The director  is at a range 27 and  the deputy director                                                               
is a range 25.                                                                                                                  
4:05:12 PM                                                                                                                    
REPRESENTATIVE FIELDS asked about  the possibility of effectively                                                               
cross training the two positions to allow for flexibility.                                                                      
4:05:28 PM                                                                                                                    
MR. MITCHELL  replied there's no  legal restriction  against that                                                               
possibility; however,  it's the silo  issue "that crops up."   He                                                               
offered his belief when there's  two separate divisions operating                                                               
under separate leadership there is an automatic resistance.                                                                     
4:06:36 PM                                                                                                                    
REPRESENTATIVE FIELDS sought to clarify  the relative size of the                                                               
different  divisions.   He  asked  for the  number  of staff  per                                                               
4:07:01 PM                                                                                                                    
MS. MUNOZ answered approximately  700 positions in the Department                                                               
of Labor & Workforce Development.                                                                                               
4:07:18 PM                                                                                                                    
MR. MITCHELL,  in response to  Representative Fields,  said there                                                               
is  51  positions  in  the   Workers  Compensation  Division  and                                                               
approximately 89 in the Labor Standards and Safety Division.                                                                    
4:07:32 PM                                                                                                                    
REPRESENTATIVE  FIELDS  asked for  the  number  of staff  in  the                                                               
Department of Labor & Workforce Development's other divisions.                                                                  
4:07:47 PM                                                                                                                    
MS.  MUNOZ replied  she did  not have  those specific  numbers at                                                               
this time and would follow up with the answer.                                                                                  
4:08:36 PM                                                                                                                    
REPRESENTATIVE  FIELDS  inquired  as  to the  current  number  of                                                               
subdivisions within  the Labor Standards and  Safety Division and                                                               
4:08:57 PM                                                                                                                    
MS. MUNOZ stated  within the Labor Standards  and Safety Division                                                               
there  is  the  Alaska  Occupational Safety  and  Health  (AKOSH)                                                               
program,  the Mechanical  Inspection  Section, and  the Wage  and                                                               
Hour Administration.                                                                                                            
4:09:35 PM                                                                                                                    
MR. MITCHELL  shared his understanding  that the  sections within                                                               
Workers'  Compensation  include  the Adjudications  Section,  The                                                               
Fishermen's  Fund, the  Workers'  Compensation Benefits  Guaranty                                                               
Fund, the  Second Injury Fund,  the Special  Investigations Unit,                                                               
the administrative unit, and the Reemployment Benefits Section.                                                                 
4:10:37 PM                                                                                                                    
REPRESENTATIVE  FIELDS  restated  his question,  asking  for  the                                                               
number of  staff within each  section of the Labor  Standards and                                                               
Safety Division.                                                                                                                
4:10:54 PM                                                                                                                    
TERRE GALES,  Director, Division  of Labor Standards  and Safety,                                                               
Department of  Labor & Workforce  Development, replied  there are                                                               
20 in the  Wage and Hour Administration, approximately  20 in the                                                               
Mechanical  Inspection  Section,  and   about  40  in  the  AKOSH                                                               
4:11:12 PM                                                                                                                    
REPRESENTATIVE  FIELDS asked,  of the  40 in  AKOSH, if  they are                                                               
somewhat evenly divided between consultation and enforcement.                                                                   
4:11:18 PM                                                                                                                    
MR.  GALES offered  his understanding  that it's  not exactly  an                                                               
even  split.    He  said  there are  "a  couple  more"  staff  in                                                               
enforcement than there are in consultation.                                                                                     
4:12:00 PM                                                                                                                    
REPRESENTATIVE FIELDS asked Mr. Mitchell  how many hours per week                                                               
he's worked in general as the division director over the years.                                                                 
4:12:19 PM                                                                                                                    
MR. MITCHELL  said it  varies.   He estimated  during legislative                                                               
session he  works approximately 60-70  hours per week  and during                                                               
the interim approximately 50 hours per week.                                                                                    
4:12:42 PM                                                                                                                    
REPRESENTATIVE FIELDS asked if there  has been a similar workload                                                               
for the Labor Standards and Safety Division director.                                                                           
4:12:55 PM                                                                                                                    
MR. MITCHELL answered yes.                                                                                                      
4:13:00 PM                                                                                                                    
REPRESENTATIVE FIELDS  validated that Mr. Mitchell  and the other                                                               
directors of the effective divisions  work "beyond normal" office                                                               
4:13:23 PM                                                                                                                    
CO-CHAIR LEDOUX opened public testimony on HB 68.                                                                               
4:13:53 PM                                                                                                                    
DON ETHERIDGE,  Alaska American Federation of  Labor and Congress                                                               
of  Industrial Organizations,  on behalf  of the  Alaska AFL-CIO,                                                               
expressed  concern that  when two  departments are  combined, one                                                               
gets  left  behind.   He  opined  that  both divisions  are  very                                                               
important to Alaskans.                                                                                                          
4:14:45 PM                                                                                                                    
REPRESENTATIVE  HANNAN asked  Mr. Etherdige  to elaborate  on his                                                               
4:15:38 PM                                                                                                                    
MR.  ETHERIDGE explained  the concern  is that  either department                                                               
could get left behind.  He  said there is concern about the Labor                                                               
Standards  and  Safety  Division   not  being  able  to  complete                                                               
inspections because  they are already "short-handed."   He stated                                                               
that Workers' Compensation  is also an important  division to the                                                               
4:16:38 PM                                                                                                                    
REPRESENTATIVE  TALERICO reflected  on  his personal  (previous?)                                                               
experience in the private sector.   He said there is probably and                                                               
opportunity to make incredible improvements  to any type of state                                                               
safety  program   by  having  a   closer  merger   with  Workers'                                                               
Compensation and  the safety department.   He offered  his belief                                                               
that having safety  people directly connected to  the details and                                                               
analysis of  compensated injuries  is the best  way to  develop a                                                               
far better safety  culture and develop programs  that improve the                                                               
safety of  all the workers on  site.  He opined  that combination                                                               
could make  incredible improvements to an  entire safety culture,                                                               
even statewide.                                                                                                                 
4:19:02 PM                                                                                                                    
REPRESENTATIVE  FIELDS acknowledged  he agrees  with the  premise                                                               
that the two  divisions are complementary.   He expressed concern                                                               
with the  loss of  the AKOSH  chief, adding that  it's more  of a                                                               
technical  professional position  than  the deputy  commissioner,                                                               
which is more  managerial and policy.  He  expressed concern with                                                               
the  idea of  permanently  losing that  ability  to insure  those                                                               
AKOSH functions are united.                                                                                                     
4:20:42 PM                                                                                                                    
CO-CHAIR  WOOL  said he  hopes  that  the projected  savings  and                                                               
efficiencies  will  be there.    He  suggested reevaluating  this                                                               
after some  time to see if  it will be more  streamlined and more                                                               
efficient or more work.                                                                                                         
4:22:25 PM                                                                                                                    
REPRESENTATIVE  HANNAN  expressed  curiosity as  to  whether  the                                                               
Alaska  DLWD have  parallels in  the  federal government,  adding                                                               
that  state   agency  structures  are  frequently   developed  in                                                               
response to  federal bureaucracy.   She further noted that  if it                                                               
is known  where the injuries  are happening then  preventing them                                                               
is a cheaper  and more efficient outcome; however,  if it results                                                               
in  a position  going from  70 hours  per week  to 100  hours, it                                                               
probably isn't more efficient.                                                                                                  
4:24:27 PM                                                                                                                    
CO-CHAIR  LEDOUX sought  clarification  on the  structure of  the                                                               
division.   She asked if,  previously, there was both  a director                                                               
and a  deputy director position,  and how long  director position                                                               
had been vacant.                                                                                                                
4:25:07 PM                                                                                                                    
MR. MITCHELL answered no, the  deputy director position that's on                                                               
the books now is the same  position that the director held in the                                                               
past -  there was no  deputy director  position.  He  offered his                                                               
belief that in anticipation for  this proposed merger, the person                                                               
appointed to head the DLSS was  appointed as a deputy director to                                                               
avoid having to make adjustments in the future.                                                                                 
4:26:04 PM                                                                                                                    
CO-CHAIR LEDOUX inquired  as to whether there would  still be the                                                               
deputy director of  Labor Standards and Safety who  is now acting                                                               
as the director doing that work.                                                                                                
4:26:51 PM                                                                                                                    
MR. MITCHELL answered that's exactly  right.  He offered a "sneak                                                               
peak"  into their  plan,  which is  to  establish an  operational                                                               
managerial control over all the  enforcement functions within the                                                               
combined  divisions;  primarily  that's  currently  within  Labor                                                               
Standards  and  Safety  (wage and  hour,  mechanical  inspection,                                                               
occupational  safety and  health).   Added to  that would  be the                                                               
special   investigations  unit   that's  currently   in  Workers'                                                               
Compensation.   He said  the deputy director  would focus  on the                                                               
operational  management  of  those  enforcement  inspection  type                                                               
related functions, while the director  would focus on the overall                                                               
administrative   issues,  the   adjudication  functions   in  the                                                               
division  of  Workers'  compensation,  as  well  as  the  benefit                                                               
programs and providing support to  the deputy director. He opined                                                               
that the workload wouldn't necessarily  change because there will                                                               
still  be two  leaders in  place, adding  that producing  a joint                                                               
leadership team  creates unification  that could  overall provide                                                               
better service with the combined divisions.                                                                                     
4:29:17 PM                                                                                                                    
CO-CHAIR LEDOUX expressed  uncertainty that this would  be a good                                                               
idea.   She stated that it  looks like there would  be savings of                                                               
283,000 dollars; however, if there  used to be a director instead                                                               
of the deputy director and  the deputy director is functioning as                                                               
the  director does  it really  save anything  by taking  away the                                                               
director position.                                                                                                              
4:30:05 PM                                                                                                                    
MR. MITCHELL  said the savings associated  with reclassifying the                                                               
director position to  a deputy position are  minimal, adding that                                                               
makes up approximately 10,000 of  the 283,000 dollars.  He stated                                                               
the big  savings comes from  flattening the  management structure                                                               
in  Occupational Safety  and Health,  noting that  almost 200,000                                                               
dollars of the total comes from  that position alone.  He said it                                                               
depends on the  thought process; whether there needs to  be a lot                                                               
of people  overseeing a program  for efficiency or  to streamline                                                               
things from a  management perspective.  He noted  that there will                                                               
still  be leadership  in both  main programs  within Occupational                                                               
Safety and Health  and if things start to go  awry with either of                                                               
those positions then adjustments can be made.                                                                                   
4:32:27 PM                                                                                                                    
CO-CHAIR LEDOUX announced HB 68 was held over.                                                                                  

Document Name Date/Time Subjects
HB 45.Sponsor Statement.pdf HL&C 3/27/2019 3:15:00 PM
HL&C 4/1/2019 3:15:00 PM
HB 45
HB 45.Bill Version A.PDF HL&C 3/27/2019 3:15:00 PM
HL&C 4/1/2019 3:15:00 PM
HB 45
HB 45.Fiscal Note DCCED.pdf HL&C 3/27/2019 3:15:00 PM
HL&C 4/1/2019 3:15:00 PM
HB 45
HB 45.Backup Sunset Review.pdf HL&C 3/27/2019 3:15:00 PM
HL&C 4/1/2019 3:15:00 PM
HB 45
HB 68.Bill Version A.PDF HL&C 3/27/2019 3:15:00 PM
HB 68
HB 68.Transmittal Letter.pdf HL&C 3/27/2019 3:15:00 PM
HB 68
HB 68.Sectional.pdf HL&C 3/27/2019 3:15:00 PM
HB 68
HB 68.Fiscal Note.PDF HL&C 3/27/2019 3:15:00 PM
HB 68
HB 68.Fiscal Note 2.PDF HL&C 3/27/2019 3:15:00 PM
HB 68
HB 68.Backup Merger Request.pdf HL&C 3/27/2019 3:15:00 PM
HB 68