Legislature(1997 - 1998)
04/15/1997 01:38 PM Senate L&C
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 169 VOLUNTARY FLEX TIME FOR MINES
CHAIRMAN LEMAN announced SB 169 to be up for consideration. He
announced an at ease from 2:33 p.m. - 2:35 p.m. He said although
it is not his intention to move the bill today, those who are
interested can provide written testimony to the committee and he
said that the five hours of testimony from the House would become
part of the committee's record, also.
MS. KREITZER, Staff to Senate Labor and Commerce Committee, said SB
169 changes the current employee, voluntary, flexible work hour
provisions in AS28.10. Under current law an employer must pay an
employee one and one half times the regular rate of pay for any
hours worked in excess of 40 hours a week or 8 hours a day.
However, the law also provides that the Department of Labor may
approve a written agreement between an employer and employee,
increasing the regular pay hours to 10 hours per day, a long as no
more than 40 hours per week are worked when the employee has
entered into a voluntary flexible work hour plan.
SB 169 permits the Department of Labor to approve a written plan
between the employer and employee increasing the regular pay hours
to 12 per day, but not more than 40 per week.
MR. TOM IRWIN, Operations Manager, Fort Knox, supported SB 169. He
said he was here really at the request of the employees who are
working eight hour shifts and want to change it to 12 hour shifts.
He said they sent out petitions and received a 98% approval rating.
This bill would give their employees significant benefits allowing
them to work 168 hours every four weeks, but they would have 14
days off in that time period instead of seven giving them a total
of 91 more days off per year. He stressed that they still intend
to pay overtime over 40 hours. Their overtime pay with this bill
will increase by 2.3% which is $250,000 per year. With current
law, they would pay $1.5 million per year or $18 million over the
life of the mine.
He said the mine makes between $200 - $230 per ounce, but they have
$180 million in acquisition and predevelopment costs. They have
$375 million in capital costs and estimate $30 million more of
sustaining capital. The bills need to be paid and Fort Knox is a
low grade project, but with correct operations and management it is
now, and will continue, to be a viable mine Alaska can be proud of.
MR. IRWIN said that they had looked into using the 10 hour flex
plan except to work the two hours overtime which was originally
suggested by Commissioner Cashen. Later the Deputy Commissioner
testified that was illegal. Proposals have been made to drop the
pay for employees by Mr. Frye, AFL-CIO, and there were 13 areas
where their employees would get hurt by doing that. They would
lose in their short and long term disability, they would have
reductions in life insurance and accidental death and dismemberment
insurance, reductions in military pay leaves, and reductions in
workers compensation benefits (all which are set by State law). It
has been suggested that they form their own union and a legal
opinion they got on the matter said it would be a clear violation
of National Labor Relations and employees could lose their rights.
The legal opinion said it also bordered on fraud.
MR. IRWIN said that Alaska is the only state where miners of this
wage cannot work with this 12 hour exemption. It is being fought
for in Nevada and California. He said they want fairness and for
their employees to be able to make their own choices especially
since this schedule is a factor that affects their families and
children. He said this would allow the employees to have one of
the best work schedules he's seen allowing them time to go home and
have quality time with their families.
MS. MICHELLE STEEL, Human Resource Technician, Fort Knox Mine,
supported SB 169. She said she has worked a 10 hour day four days
a week under a flexible work hour plan under the current law. It's
very nice and it's good to be able to choose her schedule. It
reduces the number of times she has to commute to the mine, about
25 miles each way (45 minutes). She said most importantly it
allows her to have an additional day with her family. She said her
position at the mine allows her to know every employee and all of
their dependents and the request for the 12 hour flexible work hour
plan is supported by the employees and their families. She is aware
that local hire is a major concern and assured them that this is
not designed to help employees to commute from out-of-state. In
fact, all 248 employees are Alaska residents and she said that
nearly all of them were hired within the State of Alaska.
MS. STEEL said they are proud to work for a company whose
management addresses concerns and issues that are pertinent to her
family. She said this would allow her 91 more days per year to
spend together with her family.
SENATOR KELLY asked if she currently works four 10s. MS. STEEL
replied that she started out working that schedule, but now she is
working eight hour days, five days per week, but she will return to
the other schedule as soon as she can.
SENATOR KELLY asked how many of the 248 employees at Fort Knox want
to move to a 12 hour shift. MS. STEEL said that 98% of the
employees are in favor of that.
Number 364
MS. CAROL DESNOYERS, Alaskan Workers, opposed SB 169. She said
they should remember that Fort Knox is trying to change a State
labor law that was enacted to protect the workers from an abuse of
excess work hours each day by penalizing the employer while
compensating the worker when they do.
Despite the narrowed down version of this bill, it will still have
repercussions in other industries and other mining areas. For
instance, Usibelli Coal Mine just asked its workers to give up
their overtime. Carlisle Trucking also is asking for exemptions as
well. She said Alaska is beginning to see a new era in the mining
industries. She named three mines that were opening up and said
hundreds of thousand of acres were just recently opened to mining
exploration bringing jobs that would be directly affected by this
law.
AMAX has a legacy of backing legislation in other states that erode
workers wages as well as their rights - all under the guise of
making their employees' schedules more liveable and family
friendly. Anyone who has lived in Alaska for any length of time
has had to endure hardships to make a living. The bottom line on
hardships is the cost of living, much of which is offset by the
overtime pay. SB 169 and HB 68 threaten to erode the wages and
rights of workers and the majority of Alaskan workers are really
appalled that such a bill would be considered.
MS. DESNOYERS said that AMAX says the only feasible way they can
give their workers the schedule they are requesting is through an
overtime exemption caused by the fluctuating gold prices and cost
overruns in construction. She added that also due to the hard work
of the employees AMAX expects to make their production curve six
months ahead of schedule this year and is expected to save $20
million on projected cost overruns and that recent exploration
tests indicated an additional 2.7 million ounces of gold. She also
noted that AMAX hedges their gold prices to keep from having to
deal with fluctuating gold prices on the market.
The employees at Fort Knox are an asset to the mine and AMAX would
be wise to recognize that and give them the schedule they have
asked for and pay them the overtime they would have earned in that
schedule rather than using them as pawns to change the State labor
laws that are there to protect the rights of all the Alaskan
workers.
CHAIRMAN LEMAN asked who she thought Fort Knox should be
accommodating, the 97% of employees who want the change or the
other 3%. MS. DESNOYERS replied she thought they should recognize
their workers as an asset that has already proven to make more
money for them.
CHAIRMAN LEMAN said that testimony stated the workers would make
$70 more per cycle and yet she is suggesting taking money away.
MS. DESNOYERS replied that AMAX should recognize their workers as
an asset and pay them what they are worth.
SENATOR MACKIE asked where she works. She replied that she is a
nonunion worker and works in a gift shop. Her husband has worked
in the mining industry in both union and nonunion jobs.
SENATOR MACKIE said he thought Chairman Leman was trying to say
that this would give people more time with their families and pay
them more money and asked if she didn't think that was accurate.
MS. DESNOYERS said she is saying that a State labor law that has
been enacted to protect the rights of all the Alaskan workers
shouldn't be changed when accommodations could be made at the mine
by giving the workers schedules they want and paying them what they
are worth.
Number 267
MR. DAN SEATON , Teamsters Local 959, opposed SB 169 because once it
is granted to one group of people, it's not going to be able to be
denied to other industries whether it be construction or whatever.
He lives in a very small town, Kodiak, where people are very
dependent upon seasonal work. Without the overtime rates through
the summer months, the cannery industry, the freight industry, and
the construction industry a lot of people will not be able to make
it through the winter months, especially considering the high cost
of living in the small villages.
MR. SEATON said he thought everyone needed to step back and think
about what everyone and their fathers went through and fought to
get a fair wage. One of the biggest battles they had was obtaining
an overtime rate. He said that 12 hours is a pretty hard day and
he didn't think they were counting the evening times they would be
home with their families helping with home work and doing whatever
goes on in their family life.
He said he didn't see this profiting anyone but big business. He
thought Fort Knox could take care of their workers if they chose to
do so. He said he has heard from other businesses if this does go,
they are going to try to get exemptions also.
Number 192
MR. JERRY MARSHALL, Fort Knox Gold, said he represented the people
who signed the petitions and supported SB 169. He said the company
did not coerce them into this at all. When they first started up
the mill, they worked 12 hour days, five days a week. So they know
what it's like and they asked the company to do this for them. He
said in order for this to work every employee has to want it and
also Fort Knox has to go to the Department of Labor every year and
reapply for the certification.
SENATOR KELLY asked why they didn't organize under a collective
bargaining agreement under the Wage and Hour Act, number 13, work
performed by an employee under a flexible work hour plan. MR.
MARSHALL replied that if they do it for this pretext, they are
breaking the law or on the verge. He said the unions play a very
important role in our society and there should always be the right
to organize and help each other out. The reason to have unions is
when management and workers can't come together. In this case
workers and the company want to work together.
SENATOR KELLY asked how they dealt with holidays like Christmas in
terms of overtime. MR. IRWIN replied that they have 10 set
holidays. An employee is paid time and a half for his benefits.
If it's his time off, he would get paid holiday pay.
SENATOR MACKIE asked what would happen if an employee didn't want
to go to this schedule and wanted to stay with the existing
schedule. MR. IRWIN said they thought about that a lot and feel
their word to their employees is important. They have made it
clear if someone wants to stay on their schedule, if it's an eight
hour schedule, he will stay on his schedule. He said it's clearly
voluntary. If the employees decide they don't like it, the
Commissioner of Labor has the right to change it.
TAPE 97-18, SIDE A
Number 001
MR. IRWIN said they would end up paying their employees more
overtime. The benefit to the company they see is safety.
Statistics show that it's not the schedule they work, but the
satisfaction of the worker in the job. They feel they will break
even at $250,000. They don't feel under current law they could
afford the $1.5 million extra.
SENATOR MACKIE asked if they followed current law and went to two
12-hour shifts, it would cost them $1.5 million extra and by going
to the proposed shift it would cost $250,000 more. MR. IRWIN said
that was right.
SENATOR KELLY asked if this legislation doesn't pass, will they go
to 12-hour shifts. MR. IRWIN replied that they didn't see how they
could do that economically. He said there is a lot of talk about
how they are a big company and have ulterior motives and that's a
lie. He has personally done over 150 economic analyses on the
property and they did not dig in the wrong place, but they have to
have very clear plans to make sure they protect the environment and
have a good economic mine. If it would have been economic to do
12-hour shifts, they would have done it long ago. He explained
that the mobile mechanics will stay on a 10-hour day shift, anyhow.
This schedule would not give them more production, he said in
answer to Senator Kelly's question, because they operate 24-hours
a day anyway. This is why they have 8-hour shifts; it's tough to
divide work schedules up into 10-hour shifts. You can do two 10s,
but how can you fill the gap in for the other four hours?
Number 79
SENATOR MACKIE said it was stated that you commute an hour each way
and work a 12-hour shift, that's 14 hours per day and asked what
his experience has been with fatigue and safety. MR. IRWIN
replied, for example, when they worked 12-hour shifts and drove
further there was over one year without a loss of time accident.
Another company, Lone Tree, in Santa Fee went to 12-hour shifts and
actually dropped to nil losses and their drive was farther than
his. One of his sister companies, AMAX Gold, switched to 12-hour
shifts and the year they switched they won the National Sentinel's
Safety Award.
MR. DARRELL MCSPADDEN, Teamsters 959, opposed SB 169 and any other
legislation that affects the working conditions of the people of
Alaska in the manner this does. He said there is no need for
unions when companies treat you properly. Working 12-hours a day
at any job is an exhausting thing to do to anybody. The mine was
designed and built with full knowledge of existing labor laws. And
although the mine's representatives claim the change is for the
benefit of their employees, they know who the ultimate
beneficiaries are going to be.
MR. MCSPADDEN said that he hasn't talked to one individual, outside
of the Fort Knox people, who has said anything in support of this
bill.
Number 219
SENATOR MACKIE said he has heard conflicting stories about
exemptions current in State law. He asked why the 98% of employees
who are asking for this at Fort Knox not be allowed to do it. MR.
MCSPADDEN responded that these laws were written after long, hard
contested battles that cost many lives. It would take a great deal
of research into labor union history.
SENATOR KELLY asked Mr. Irwin if you're switching from three 8's
now to two 12's, don't you need one-third less people? MR. IRWIN
replied no because they still have the same number of hours in a
month to cover. He added that they have four crews right now.
Number 320
MR. ED FLANAGAN, Deputy Commissioner, Department of Labor, said he
is here to try and hold back the snowball he sees as rolling down
the hill. They are opposed to this bill, although they sympathize
with the workers there. He said the schedule they are on would
certainly drive folks to distraction and to try to change the law
for all workers to address their own situations. He said the
Department of Labor did not put them on that schedule; Mr. Irwin
did. Alaska is the only state they couldn't do this in and he felt
that we should be proud that we have exceptional laws protecting
the rights of workers. He said they hear that other states do it
all the time, but don't find that a persuasive argument.
He explained that Alaska is one of three states that has anything
for over 8 hours as far as overtime. Rather than give one
exemption a year, maybe they should consider scrapping it.
SENATOR KELLY said he grew up in California and whenever he worked
over eight hours he got overtime and asked if that was not standard
practice now. MR. FLANAGAN said that California has an industrial
welfare commission that's appointed by the Governor that has
recommended a drop in the over-eight, but the legislature is
holding on to it. So California is an over-eight state and so are
we. MR. CLARK , Attorney for Fort Knox, interrupted to say that
California changed that law two weeks ago.
MR. FLANAGAN continued saying that was not an argument for doing
away with the law. He said that Mr. Marshall's argument is well
taken about an exemption. There are 16; why not 17, etc. Why not
just muck out the whole thing, if that's where we want to get, and
take a race to the bottom with other jurisdictions by sacrificing
worker protections.
The workers have a right to organize or not. They exercised their
rights by taking jobs with a mine that is the lowest paying large
mine in the State. They already pay $3 - $4 less than the going
rate for large mines in the State of Alaska. That's a considerable
cost savings already. MR. FLANAGAN allowed that they do need to
make a profit and they have done a good job of training and hiring
locally and are a welcome addition to the State, in that respect.
If $18 million would cost them to comply with State law, they have
just written down the cost overrun by $25 million.
MR. FLANAGAN said he wanted to correct Mr. Irwin's statement that
Commissioner Cashen never said they should work four 10s and pay
the overtime, too. That is not consistent with current law.
Commissioner Cashen said can't you do something using the four 10s
exemption under law; and there is a four 10s exemption under law
for those employees where it is appropriate.
He said the department is ready to support Representative James
bill that would put exemption 13, collective bargaining units, on
the same footing - just the straight four 10s. There are three
power-house agreements that cover a total of 20 employees in the
whole State that had straight time for 12 hours. When the
Commissioner decided he would support Representative James' bill,
he talked to the unions involved about what they would do if this
bill passed. They said they would have to renegotiate the wages if
it's important for the guys to stay on 12 hours, but the employer
won't go with the overtime on that schedule.
Fort Knox has made much of the fact that their benefit plans are
geared to the base pay. While it is true that a couple of those
are statutory, but with the proposed great savings in safety that
they are expecting to see, according to Mr. Irwin and Mr. Lange,
they could possibly redirect some of the savings towards some kind
of supplemental disability. If this bill doesn't pass, he thought
they would find a way to achieve what they need to do under current
State law.
MR. FLANAGAN said one of Commissioner Cashen's biggest concerns
with this bill is that it is changing State law for 243 employees.
No one doubts that they are behind this and they will take Fort
Knox's word that they would accommodate anyone who didn't want this
schedule, but he thought other companies would not give that
option. He noted that no large industry had tried to get an
exemption. However, there are other smaller ones in the wings,
like auto mechanics and hairdressers. He predicted they would see
more of these bills and the Department of Labor will sound like a
broken record, because they will be here opposing them because they
don't think it's in the best interests of the workers of the State
of Alaska.
MR. FLANAGAN also pointed out that it's not true that the exemption
would have to be approved every year by the Department of Labor.
They do it if they get a complaint or they decide to rescind the
plan, but the employees do have a window period every
November/December where they could say they don't want to be on the
voluntary plan any more.
MR. FLANAGAN concluded that if the legislature wants to chip away
at the eight-hour law, they would have to agree to disagree and try
to convince them that there's nothing to be ashamed of in having a
law that's more protective of its workers than other states in the
union.
SENATOR MACKIE commented that he has mixed feelings about this sole
proposal and he has listen closely to testimony on both sides of
the issue. He said he didn't think it necessary to criticize
people with an opposing view. He said the bill would probably pass
out of committee since it is sponsored by the President of the
Senate and would come to a vote on the floor.
CHAIRMAN LEMAN stated that he appreciated the civility people used
in discussing this charged issue.
SENATOR KELLY asked under the terms of this law, does the
Commissioner have to okay any agreement with Fort Knox. MR.
FLANAGAN replied yes. SENATOR KELLY asked if he has to approve it.
Could he say no? MR. FLANAGAN responded that he could say no, but
if he didn't produce a finding, they could be challenged. SENATOR
KELLY commented that he didn't see what good it does to pass a law
if the Department of Labor talks like this about it.
| Document Name | Date/Time | Subjects |
|---|