Legislature(1995 - 1996)
02/28/1995 01:30 PM Senate 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
SL&C - 2/28/95
SB 94 WORKERS' COMP FOR WORK-STUDY STUDENTS
CHAIRMAN KELLY called the Senate Labor and Commerce Committee
meeting to order at 1:35 p.m. The first order of business was SB
94. SENATOR KELLY stated he introduced SB 94 at the request of
Representative Bettye Davis, and noted a similar measure passed the
Legislature last year but was vetoed by former Governor Hickel.
JOSH FINK, legislative aide to Senator Kelly, informed committee
members this same legislation passed the 18th Legislature as SB
141. He explained that under current law, a student enrolled for
credit at a public high school in a course which combines academic
instruction with work experience, outside of the school for a non-
profit agency, is an employee of the state for purposes of Workers'
Compensation. SB 94 broadens the coverage so that all students
participating in on-the-job training, as part of an academic
program, for no financial compensation, would be covered. This
would include students who participate in automotive maintenance,
welding, carpentry and various other work programs, in businesses
other than non-profits. SB 94 would cover uncompensated students
injured at the worksite for medical benefits only, and not for lost
wages. SB 94 also provides immunity from being sued, for the
school district in which the school is located, for the employer
providing the training, and the state. He stated without the
immunity provision, private employers will not participate in these
training programs.
SENATOR SALO inquired whether non-profit volunteers are covered
under the Workers' Compensation Act under a very recent change made
by the Legislature. MR. FINK replied yes, but clarified SB 94
differs in that it covers students in a work study program placed
with non-profit agencies.
LARRY WIGET, representing the Anchorage School Administration,
testified via teleconference. He noted they support the concept of
SB 94, but they are concerned that any claims expenses would be
charged back to the school districts who may not have the dedicated
funds for that purpose. He stated it should be the state's
responsibility to cover claims in the event of an injury to a
student. He restated that the Anchorage School Administration
supports the concept of SB 94, but it does not support charging
school districts for the claims.
Number 142
LARRY GORDON, Job Placement Coordinator at the King Career Center
in Anchorage, stated the relationship between student and employer
is a training and learning one, rather than an employee-employer
one. He noted there are many employers who want to assist students
but are afraid of liability problems, and he has lost excellent
training opportunities for students because of this concern. The
employers need to be protected as they can provide excellent
learning opportunities for students and often provide jobs after
the training is completed. He urged committee members to support
SB 94.
SENATOR KELLY questioned why work experience, rather than training
experience, has been emphasized in SB 94. MR. FINK replied those
terms should be synonymous. SENATOR KELLY questioned whether the
employers would be willing to pick up the Workers' Compensation
premiums. MR. FINK commented employers are not presently doing so,
as students are often limited in the number of hours they can work
during the semester.
Number 175
SENATOR KELLY asked Mr. Gordon if he thought any of the employers
would be willing to pay the Workers' Compensation payments for the
students. MR. GORDON replied the students are only on the premises
for a limited number of hours per week, and essentially the
employer is providing a learning opportunity for the student.
Employers want to be covered while they are teaching the student,
but do not feel the activity is sufficient enough for them to pay
Workers' Compensation premiums.
SENATOR KELLY asked what a Workers' Compensation premium would cost
for a typical work-study student.
Don Koch, Marketing Surveillance Officer of the Division of
Insurance, stated the costs vary depending on the occupation of the
employer, but the range is from 50 cents per $100 to $75 per $100.
SENATOR KELLY asked if the rates would be lower since only medical
benefits would be paid. MR. KOCH replied that currently there is
no structure for not including the indemnity portion of the
payment. Approximately 50 percent of the rate is attributed to
medical costs.
Number 224
SENATOR MILLER stated, in his experience as an employer, the
company usually bases the amount on the overall salary earned,
therefore if the student is not compensated, there is nothing to
base the premium on. MR. KOCH stated that is correct, and
something would have to be structured in. He noted an equivalent
is usually negotiated for volunteers.
SENATOR KELLY asked if the premium is normally based on an hourly
wage. MR. KOCH answered it is based on each $100 of wages earned;
the only state that uses an hourly wage approach is Washington. He
added it would not be difficult for an actuary to determine those
amounts.
CLIFF STOCKTON, an aviation maintenance technology instructor at
the King Center, testified. He spoke in support of SB 94, as he is
aware of many opportunities for industry-related hands-on
experiences not being used. The proprietors and owners willing to
provide this training are not willing to take any money out of
their pockets to enhance training of students. They feel it is the
state's and school districts' responsibility to provide the
training.
Number 269
BRAD THOMPSON, Director of the Division of Risk Management,
prepared the fiscal note in committee packets. He advised it is an
estimate of future costs based on the average cost per employee the
state sees in its employee group applied after reducing medical
costs and discounting it further. It is a nominal cost of $24,000
carried annually, but that cost could easily vary as claims per
employee can average $8,000 per claim.
SENATOR KELLY asked if $24,000 would pay for student work study
programs statewide. MR. THOMPSON replied affirmatively, but for
uncompensated students receiving medical benefits only. SENATOR
KELLY asked how many students that number would include. MR.
THOMPSON answered that number is unknown, but a modest estimate of
250 students was used, which was included in SB 141, passed last
session. He noted the Division's costs are charged to each agency
on an interagency allocation system based on their actual claims
experience.
SENATOR SALO questioned whether this type of approach might
discourage apprenticeships, in which the employer pays the worker
a low level of pay. A speaker from the Career Center answered that
usually apprenticeships occur after the student has graduated from
high school. SB 94 addresses students who attend on-the-job
training instead of attending a high school class.
Number 330
SENATOR KELLY stated he would like to do further work on SB 94 and
would bring it before the committee at a later date.
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