Legislature(2001 - 2002)
04/25/2002 02:35 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
HB 504-WAGES FOR WORKERS IN FISHERIES
CHAIRMAN STEVENS announced HB 504 to be up for consideration.
MS. LINDA SYLVESTER, Staff to Representative Pete Kott, explained
that HB 504 addresses wages for fisheries. It is not connected to
the minimum wage increase, but it came about in discussion on the
telephone with different businesses when the minimum wage was
beginning proposed to go up to $7.15 per hour. They complained
that they had valid reasons for exemptions. Statutes has nothing
for most situations, but there is a section of the Wage and Hour
Act that clearly addresses the fisheries business. She read from
AS 23.10.085 (c):
It provides that the regulations may permit deductions
by an employer from the minimum wage to employees for
the reasonable cost as determined on an occupation
basis of furnishing board or lodging if board or
lodging is customarily furnished by the employer and
used by the employee.
She said that clearly fits the fisheries business, which
customarily provides board and lodging for its employees.
Typically most of those businesses are remote and the locations
don't have alternative public board and lodging. The enabling
regulation of the statute she just read requires that based on a
written agreement an employer can take deductions if: 1.
Alternative public board and lodging facilities are accessible to
the work sight and the employee has declined to use such
facilities; 2. The board and lodging facilities of the employer
are customarily furnished by the employer and used by the
employees; and 3. The cost to the employee for the use of the
board and lodging facilities is reasonable and without profit to
the employer.
They decided that the regulation was either improperly drafted or
was being misinterpreted.
She explained that they are taking the fisheries business out of
the statute and putting them in their own statute where they can
make deductions for room and board.
Further, the Fair Labor Standards Act includes a test saying the
cost of the room and board has to be reasonable and it can't
profit the employer. They have deleted that language and inserted
up to $15 per day for every eight-hour day that the employee
works. It is all spelled out in a contract the employee signs at
the beginning of the work season. They feel that there is ample
security that the employee has a choice from the get-go whether
or not they wanted to work in a fish camp. "The choice is there
at the time of hire."
MS. SYLVESTER said there was a court case in Juneau decided by
Judge Weeks in 1999 that stipulates the exact same thing that
they are arguing in regulation 88AC151609d). It should be read as
allowing board and lodging deductions in the following
circumstances:
1. If alternative public facilities are available, then (d)(1),
which requires alternative board and lodging, is applicable and,
therefore, (d)(1), (d)(2) and (d)(3) must be satisfied; and
2. If there are no public alternative facilities available, then
(d)(1) does not apply and (d)(2) and (d)(3) must both be
satisfied.
She said this case is being appealed and is in the Supreme Court.
At least one court has determined that it's very clear that the
legislature intended for the Department of Labor to look at all
of the occupations, whether remote or in an urban area, if they
provide room and board, that it's fair for them to come up with
some kind of mechanism to receive payment from its employees for
that. "It's a situation where the fishing industry isn't in a
position any longer to absorb all of the costs."
MS. SYLVESTER said this is not a "bail out" for the industry, but
a clarifying of the intent of the statutes from the very
beginning of the state of Alaska.
MS. STEFANIE MADSEN, Vice President, Pacific Seafood Processors
Association, said they had been in existence since 1914 and
supported HB 504. It is a tool that allows them to adapt to the
ever-changing economics in the seafood processing industry.
The seafood processing industry is diverse. We have
salmon processors that operate for 4 - 6 weeks; we have
ground-fish plants that operate 10 - 11 months out of
the year; we have remote sites; we have non-remote
sites; we're very diverse. The regulations as presented
already make a differential between remote operators
and non-remote operators. The non-remote operators have
been allowed to deduct room and board for some time.
Some do; some don't. Some charge $8 and some charge
$10; some rebate at the end of the season; some don't.
What we're asking you today is to provide those remote
operators the opportunity to deduct room and board to
again be flexible in adapting to the ever-changing
economics.
I would add a little bit of information about the
seafood processing industry. We're very labor
intensive. We have a lot of entry-level positions and
those are truly the positions that we're talking about
today. We have been described as one of the last entry
level employers around. You can come to the seafood
industry without any work history and without any
education and have a job on what has been termed the
slime line. If you do your work, you have incremental
increases, either by contract or by hours.
MS. MADSEN said it was possible that there was a misunderstanding
that every processor would go out there and charge $15 or more if
they can demonstrate costs to every employee that they have, but
that won't happen, because the market is going to drive what they
are able to pay employees. Most every processor has a
differential and pay different wages. They deduct differently and
provide different benefits because they are among themselves
competitors and also competitors with the Lower 48 to attract
employees. Just by passage of this bill doesn't mean that they
are going to be able to go out and do what the bill says they are
allowed to do. "All we're asking for today is the ability to have
some flexibility in how we can control the efficiency and the
expenses of our operations.
SENATOR DAVIS asked how many people she represented.
MS. MADSEN replied that she represents 11 of the major seafood
processing companies and that there are about 300 including mom
and pop operations.
SENATOR DAVIS asked what made the difference between the mom and
pops.
MS. MADSEN replied out of their 11 employees, four or five of
them are in the top 100 employers in the state.
MR. JOHN BROWN, President, Central Labor Council (AFL-CIO), said
he was sympathetic to the industry problems, but felt strongly
that they should not be looking to the lowest paid, hardest
working people in our state to try and bail it out. Fifty
thousand people signed a petition in the state last year to raise
the minimum and this bill seeks to reduce the minimum wage for
people who are the least able to absorb it. "Please don't pass
this bill. It's wrong."
SENATOR AUSTERMAN asked within the definition of the fisheries
business that this bill affects how many of those workers does he
represent.
MR. BROWN replied that he didn't represent any of those workers.
Fairbanks doesn't have any fish processors that he knows of.
I represent working people everywhere. That's what the
AFL-CIO does. They don't just represent their members.
These are the people who have the least voice of any
worker because they don't have representation. That's
why they can depend on the state and federal government
to pass laws that keep them from being further
exploited by the work that they do.
SENATOR AUSTERMAN explained that part of the bill talks about the
only way that they can deduct this is if it's in a written
agreement with the worker or a union that has an agreement and
asked if that wouldn't lay the burden back on the employee to
decide.
MR. BROWN replied:
Think to yourself how much choice someone in their
position has in negotiating whether or not they are
going to pay the company for their room and board or
not. I mean, here is a person who is unemployed and the
job he is seeking is paying minimum wage. How much
power has that individual got to negotiate the fact
that the company is going to pay his room and board?
They virtually have no power there. They are at the
mercy of whoever is offering them a job. She can talk
about the market all she wants, but the fact is that
unemployment is on the rise; it's been on the rise.
It's leveling out now, but there's lots of people out
there looking for work and lots of young people looking
for work. That doesn't mean that we should stand back
and let them be paid less than minimum wage. In my
opinion slaves were better off than people working for
minimum wage. They had a roof over their head; they had
clothes to wear - a lot of them…
TAPE 02-24, SIDE B
SENATOR AUSTERMAN said he had done a lot of work in the seafood
business and didn't consider them slaves. "If I sign a contract
that this is what I'm going to do, does that mean I'm a slave?"
MR. BROWN responded that he was saying the type of lifestyle that
someone can live making minimum wage is nowhere close to what I
think is fair. "A slave at some point in our countries' history
was better off than someone who is working at minimum wage right
now as far as what they are able to afford."
SENATOR AUSTERMAN rebutted that they sign a contract that says
they are accepting the fact that they are going to pay room and
board and he fails to follow his logic.
MR. BROWN retorted that they sign a contract because they need a
job. "They need some income; they don't have any income at this
point."
SENATOR AUSTERMAN replied, "A lot of us need jobs now and then.
We walk down the street until we find one that pays what we can
afford."
MR. BROWN responded, "If we get the right opportunity, we do,
sir, but a lot of us have a lot better opportunity than others…"
CHAIRMAN STEVENS asked if he heard about the court case Ms.
Sylvester mentioned.
MR. BROWN said he heard that it is being appealed to the Supreme
Court.
CHAIRMAN STEVENS said the decision out of the First Judicial
District in Juneau said that the statute currently does not
prohibit deductions for board and lodging costs when an employee
at remote sites where alternative public facilities are not
available.
MR. BROWN said he is not an attorney, but this is not what he
thinks is right.
SENATOR AUSTERMAN asked if he would have the same cause for other
people who work around the state at minimum wage.
MR. BROWN replied yes.
I would make the same argument for anyone who is
working for minimum wage. I spent quite a considerable
amount of my own time collecting signatures to get an
increase in the minimum wage on the ballot. I believe
there needs to be a minimum wage. People at that end of
the wage scale need protection from government and
that's why I did it.
MR. DARRYL TSEU, Inland Boatman's Union of the Pacific, said
although the intentions of this bill are well meaning, it leaves
some of his members with some concern.
The real victims right now are fishermen in Alaska and
our fishery workers as well. We question whether this
bill will actually help our fishermen who supply the
fish in the first place. Fish processors are controlled
by the market and unfortunately takes the value of a
captain's catch. To hope that this bill would assist a
crippled fishing industry may not be totally true. It
doesn't take time browsing through the current events
to find corporate profits getting in the way of doing
what's right in the newspaper…
He said their concern is also that deductions could be higher
than $15 per day if the employer demonstrates to the department
that the cost to employee is reasonable. He challenges the fact
that a company can be trusted to do the right thing especially
with today's economy and global competition. "The company store
mentality was wrong in the 19th Century in plantations and it's
still wrong in 2002."
SENATOR LEMAN said he didn't see any connection this bill has to
making fishermen victims. He said:
If you reduce the overhead to the seafood processor,
arguably that money is available to pay fishermen. If
you increase the overhead, there's less money available
to pay the fishermen. This bill, instead, probably
protects fishermen rather than makes them a victim.
MR. TSEU replied that his thinking was when a company dictates
the price of fish and how much it's able to pay to process it,
there's no way to say that's what their true expenses are.
SENATOR AUSTERMAN said he referred to plantations.
MR. TSEU said he had discussions in the hallway on this bill and
part of his family history came out that his great grandfather
and grandfather both worked on sugar cane plantations in Hawaii
and they signed a seven-year contract to provide the labor and
they were also supplied the housing, but they had to pay for it.
They were forced to buy everything from the company store. After
a seven-year stint it was evident that they couldn't make a
living wage and couldn't get out of their contract because they
couldn't find any place else to move.
SENATOR AUSTERMAN asked if his union agrees with the Central
Council that anybody who is working a minimum wage should be
provided room and board.
MR. TSEU said he didn't think that was the intent of what Mr.
Brown was saying. He felt at this point if he was living on a
minimum wage, he would not be able to live. People he knows in
town working for a minimum wage need to have two jobs. That
concerns him, because then they are not there with their children
where they should be at night.
SENATOR AUSTERMAN said it was hard for him to understand why the
unions haven't been pushing for room and board for every person
who works for minimum wage.
MR. TSEU said at first glance at the bill, he would say that $15
dollars is not much for the cost of living, but there is no limit
to it. There is also language that allows other fish processors
in areas where there other alternatives to other housing and he
has no problem with that. There is a choice.
SENATOR LEMAN said it might well be that it would cost the
employer $30 or $40 per day to provide room and board, but they
also have to compete for workers and if they raise the fee and
the market place doesn't go there, they're going to have a tough
time getting enough workers.
MR. TSEU said, "It might not be correct for companies to get
together and set a price, but we all know that kind of thing
happens."
MS. SYLVESTER said that there is one inaccuracy. There is a limit
of $15 and the Department of Labor is the watchdog agency. They
would have to okay anything in excess of $15.
COMMISSIONER ED FLANIGAN, Department of Labor and Workforce
Development, said that about three weeks ago this committee moved
the minimum wage increase bill and he thought it was unfortunate
that they are here today as a result of it to undercut that
increase for a large percentage of the people that it's intended
to help.
There has been a lot of historical distortion in terms
of what the legislative and statutory history is here.
In 1959 it's true, the legislature did give the
department the option to adopt regulations allowing for
the room and board. In 43 years since statehood through
eight administrations, I think it is, three different
political parties, the policy of the department, which
was only then in 1985 promulgated in regulation, was
that you don't charge for room and board in a situation
where there is no alternative and it is exactly for the
old company store type situations. In the analogy that
Senator Leman mentioned earlier - your father - the
whole crux there - he had the option of going home to
have a sandwich. If he was in a remote area, and maybe
it was remote at that time, I don't know, but right now
there are many processors where this does not apply and
that is those where there are viable alternatives - and
sometimes that viable alternative is a city campground,
but there are other options; there's usually other
employers.
It has been the policy of the State of Alaska for 43
years that if you're in a remote site, your employer
cannot charge you for room and board if there are no
alternative facilities available. The court case
reference is not exactly on point, because that is a
situation, as I understand it, where we are not a party
to that lawsuit in the Silver Bay, Globe and Diaz suit.
That was a deduction that didn't reduce the wages below
minimum wage. So, it's not the same as we're talking
about here. I only got some - we could play dueling
depositions. I will make available to the committee
some that came to me through my office from the
plaintiff's attorney from Mr. Wilson's boss and the
then Commissioner Jim Robison. I will make that
immediately available to the committee. So, again, that
case isn't exactly on point…
With regard to other statements that were made, the
$15, the way the legislature reads now - at one point
in its progress through the House, it just said they
may deduct $15 and basically by statute said that was a
fair amount. In that case, $15 would just be agreed
upon. We wouldn't have any enforcement role. As it
reads now, it says $15 or a reasonable amount and then
we are supposed to, as Ms. Sylvester said, enforce the
reasonable amount. But we're supposed to do it with a
$0 fiscal note. I think you have in your packets a
fiscal note, which we will offer at every opportunity
whether it gets approved or not, because this is not
without cost. If this was a larger division and we had
more wage and hour personnel as we do in some cases
with indeterminate fiscal notes, we would give it a $0.
But this will generate work. There are approximately 40
on a list that we keep for OSHA inspection purposes. We
have 80 shore side processors; 40 of them would fall in
the remote category - about half. For those any
employee could make a complaint and allege if the
employer did go over $15 that it generated a profit or
wasn't a fair rate, didn't really actually reflect the
costs and it would be a real pain in the butt. It would
be a major audit; you'd have to look at their fuel
costs and every other thing. So there would be a cost
and that's why we have a very moderate fiscal note -
since they made the $15 change in there, but there is a
cost nonetheless and we won't have the people to
enforce it so it will just generate more problems. I
think it is important, not today thankfully, but in
other committees we've heard about how it's all college
students. Well, as I'm sure Senator Austerman and
Senator Leman and probably all of you know, that's
about 20 years out of date. There are adults working
out there in those processing plants. We only have age
data for Alaska residents from the Permanent Fund, but
the median age of Alaskan residents that work in the
canneries as cannery workers, not managers, is 32 years
of age. So, we're not talking kids. Sure they make
money in overtime, but if you're working in a plant
where it's 80 hours a week and you're getting, let's
say after the increase should it go through, you get
$7.15 and hour. Well, for working 80 hours a week,
you're getting the princely sum of $715 a week…
So, if you take $15 per day, which is not a lot to
charge for room and board, admittedly, that's $105 per
week. So that basically in large part negates the
minimum wage increase by $1 an hour on the person's
wage.
COMMISSIONER FLANAGAN pointed out that this bill isn't waiting
for the minimum wage increase to take effect; it's to take effect
immediately in the misguided belief that we've got to deliver
this no cost to us relief to the industry by doing it on the
backs of the workers.
CHAIRMAN STEVENS interrupted to say with existing law, 40 out of
the 80 plants are not allowed to deduct for room and board and
then asked what the other 40 plants do.
COMMISSIONER FLANAGAN replied that it varies from plant to plant.
At the Icicle Plant in Petersburg they have a bunkhouse and the
worker can elect to stay in the bunkhouse and they are charged
$10 per day. They have a kitchen and meals were available for
$3.50 per meal. It really is voluntary, because people have
options. In the remote sites they can say it's voluntary because
there is an agreement, but there really aren't options.
CHAIRMAN STEVENS asked if the guys who work in a rural area where
there are other facilities are allowed to deduct for the room and
board.
COMMISSIONER FLANAGAN replied that they are.
SENATOR LEMAN said in Petersburg it probably cost more than $300
per day to rent a place to stay, plus it would cost at least $10
a day for meals if someone were living on their own. In that case
they are probably getting a good deal compared to what the
alternative might be.
COMMISSIONER FLANAGAN said that is true, but it is customary to
pay $1 more per hour in those places where they are able to
charge. "Of course, that brings this whole issue up is that we
have to be raising the floor which is a viable function of
government."
CHAIRMAN STEVENS asked if there was a regulation that says a
campground is an alternative to qualified housing.
COMMISSIONER FLANAGAN replied that wasn't in regulation.
CHAIRMAN STEVENS said, "You're using the fact that the
alternative to live in a campground is validated to say that they
can charge in an urban area where there's alternative housing."
COMMISSIONER FLANAGAN said that people have other options besides
that.
CHAIRMAN STEVENS said they are all choosing the campground
instead of the other option.
COMMISSIONER FLANAGAN responded that they're not all choosing it.
He said no one had challenged this regulation until this suit and
it will be interesting to see how it plays. "But again, that did
not reduce the wage below minimum wage."
He concluded saying that he thought this was bad policy and he
works with the fishing industry and is aware of the problems. He
has spent most of five summers in the disaster areas, but when
times are good, the processors and the fishermen make more money.
"These line workers make in the remote sites a nickel or ten
cents more than minimum wage. They don't go up when things get
better. They make what they make and that's why we have a wage
floor."
He also noted that with the exception of one very small
fishermen's organization, there has not been to date any
testimony from fishermen in support of this bill.
I don't know that they agree with Senator Leman's idea
that any extra dollar the processor gets is going to be
automatically distributed to them in the form of a
higher price.
SENATOR AUSTERMAN asked what was the unemployment rate for
processing and was it easy for them to get people to work.
COMMISSIONER FLANAGAN replied that it has gotten easier this year
and last year. Two or three years ago it was real tough. He said
that Icicle Seafoods did everything they could to hire people in
state, but there just weren't the people. He called his
counterpart in Texas to vouch for Icicle and told them that the
labor law up here would take care of Texan workers. But this year
he said that job orders are up in the seafood area from what they
were told to expect prior to last year.
SENATOR AUSTERMAN said it appears to him that there is a
competitive element out there and he's not sure this will even be
used.
COMMISSIONER FLANAGAN said there would be at least a couple or
three major plants that will use it. They do alien labor
certifications for roe techs and supervisors and special
positions.
Basically, the way the immigration law works, if you
make a job undesirable enough, then it's 'Katie, bar
the door.' You can bring in people from anywhere
including other countries and I think that's what we're
going to be looking at if we beat down the conditions
for the low-wage workers in the canneries.
SENATOR LEMAN said he didn't suggest earlier that the money
available would automatically go to fishermen. "I said it would
be available for distribution."
COMMISSIONER FLANAGAN said he stood corrected and apologized.
SENATOR LEMAN said, "If you increase the cost to processors, it's
certainly not available to pay the fishermen."
COMMISSIONER FLANAGAN said he wouldn't dispute that.
CHAIRMAN STEVENS commented that if you could get fishermen and
processor together to agree on anything, you would have
accomplished something that he has yet to see achieved in life.
COMMISSIONER FLANAGAN agreed.
CHAIRMAN STEVENS said AS 23.10.080 - Powers and Duties of the
Division - says, "The director shall investigate, ascertain wages
and related conditions on standards of employment of any employee
in the state, etc." and then lays out how they are to
investigate.
AS 23.10.085 - Scope of Administrative Regulations - AS
23.10.085 (c) Regulations may permit deductions by an
employer from the minimum wage applicable to employees
for the reasonable cost as determined by the director
on an occupation basis of furnishing board or lodging
if board or lodging is customarily furnished by the
employer and used by the employee.
COMMISSIONER FLANAGAN responded:
Yes, sir, and the key word is 'may'. Regulation 'may.'
I believe if the legislature at that time wanted to
make that law and I don't know what it was - if it was
a compromise or something, because in 1959 something
else was happening. We were first having the Alaska
minimum wage, which was 50 cents over the federal of
$1.00…If the legislature meant to make that law, they
would have put it in statute. And again I'm the
thirteenth commissioner that has interpreted things
that way.
MS. BARBARA HUFF TUCKNESS, Teamsters Local 959, said that there
was a letter from Jerry Hood regarding this particular issue and
it probably addresses in a nutshell where they are at. She also
noted that they represent a little over 7,000 workers with the
state and different industries around the state with the
exception of at sea processors, but that is not why she is here.
It's not a union issue; it's a worker issue. It's about
some, whether my numbers are right or wrong, and I
would love to be proven differently, the $11 billion at
sea fishing industry as a whole comes to this state, to
this capital, and makes a request of the House and the
Senate legislative body to reduce existing minimum
wage. We're not talking about an increase in the
minimum wage here; we're talking about an existing of
which for some of these folks…some of these start out
at $6 an hour. Granted, some others are paying minimums
of $7.50 an hour already and I would assume would not
attempt at this point to reduce even further, and don't
believe legally they probably could, unless they
unilaterally went in and reduced what they are offering
to pay and I don't know that to be the case. But, we
come to the table and as I understand this bill will be
moving out of committee - and we would request that it
not move - that there be some due consideration to the
public policy statement that is being set here. And it
goes back to the working people of the state.
I've been told that these people - most of them don't
even work in the state and in fact most of them don't
even work in this country. Why are you guys concerned?
Again, these people come to this state, they do work in
this state and they leave and we had one - down in
Mexico - who did used to work here who makes more money
now working in Mexico in one of their hotels working
eight hours a day versus the 16 hours a day they used
to work here. Now, from my perspective in the labor
industry that's kind of a sad state of affairs in and
of itself, when these people can make more money in
Mexico.
The state of Alaska in some respects was built on the
backs of the men and women that work here. Some of you
have worked in the industry. Some of you have worked
for the at sea processing company, of which Trident, I
believe, is one of the companies here. I guess we come
to the table more looking at the public policy that's
being set here, not only for the corporations. From a
short-term perspective, maybe this $11 billion industry
does need some assistance out there, but the analogy
that was used by some individuals in comparison, it's
almost like taking our state fiscal plan or lack
thereof or the alleged crisis and say we're going to
cut the legislators per diem to go towards that fiscal
gap. It is so out of this world it's not going to make
any difference. We've been told that this is going to
save this $11 billion fishing industry $5 million.
Well, when you take the $5 million, it is a savings. I
guess if my employer quit paying me, they would save
some money, also. I wish everyone would think about
what we're doing here. It's not about the $15 per day.
That's not what it's about - whether it was $5 per day.
It's the fact that these people, these minimum wage
people are going to have this money taken out of their
pocket in lieu of room and board. And what are we
talking about room and board. Those of you who've been
on these ships, I don't believe we're talking about big
rooms; in fact, I believe most of the rooms have at
least 4 - 10 per camp. They've got little beds that
they're sleeping in. They're working 16 hours a day;
they get to hopefully sleep in the bed for a couple of
hours and then they come back and charge. It's a bigger
public policy here.
MS. TUCKNESS said that in the several committees this bill has
been heard in not one worker who has testified in favor of this
bill. This impacts many people who work here, but don't live
here. She said it's like the oil industry on the North Slope
where workers are provided very nice rooms and some of the best
food in the state. They do not get charged. Granted there are
different expectations and different skills required, but she is
not asking that they increase wages, but that they look at the
fairness and application and the impact it will set from a long-
term public policy for this state.
SENATOR AUSTERMAN added that at-sea processing is a little
different than shore based and he didn't know if this bill even
applies to the at-sea processor.
COMMISSIONER FLANAGAN inserted that it would apply to floaters in
state waters, but not the at sea factory processors.
SENATOR AUSTERMAN asked the other two unions if the concept is so
important, why haven't they done anything about the McDonalds
workers of the Subway workers or the processors that work in
Kodiak already that make minimum wage.
MS. TUCKNESS responded that she believed that he is comparing
apples and oranges. The McDonalds in her area in Anchorage
doesn't pay minimum wage. If they would pay minimum wage, they
couldn't get people to work there. From an industry perspective,
this particular industry, separate from the McDonalds…
SENATOR AUSTERMAN interrupted saying that there are minimum wage
workers in the state of Alaska other than in the seafood
industry.
MS. TUCKNESS responded that she believed there were some in the
restaurants and some folks have actually compared this to the tip
credit bill. On one hand they make minimum and they get tips,
then you turn around and take the money out of the tips to help
cover any potential increases in that area. The concept there is
somewhat similar.
I guess from our perspective from where these fishing
locations are at, it boiled down to choice. And my
understanding…is when that came out, and actually it
came about addressing employees that were being charged
by some of these companies for room and board when they
quit. And this was back 15 years ago, some of the
industry was going back and taking money out of these
people's pockets. They ended up with no paychecks. It
was at that time…how this particular regulation came
about.
TAPE 02-25, SIDE A
MS. HUFFTUCKNESS continued:
The Department of Labor at the time stepped back. We
have to do something; there needs to be some sort of
balance or a leveling of the playing field. So, in
those areas where there was housing or choice, then
that choice was given to the employee. It was either
one or the other and in those areas where there was not
available or alternative housing, then the room and
board was picked up. Under this particular bill, what
it says now is that anybody out there can charge room
and board whether you have available housing elsewhere
and the employee is able to make that choice, whether
it's in a tent or 10 or 15 of them get together in a
house or live in an apartment. Their living conditions
I do not believe would be commensurate to any of us
sitting in this room. It is a different life style, but
simply because they made a choice in that particular
life style, is it okay - and I guess you guys will
ultimately make that public policy - to take room and
board, whatever that amount is out of these minimum
wage people's pockets, simply because of where they're
at in the industry and what they are doing so that
there is some savings? Are there other alternatives?
Are there some other things that maybe this industry
can do in this short-term crisis? Because I do not
believe that it is a long-term crisis here, if indeed
it's a crisis. That has not been proven either.
SENATOR DAVIS said she wanted to get the following comment on
record:
I think it is very poor timing for this bill to come
forward regardless of who supports it and who does not
support it in the sense that you have people coming and
wanting to take money that might be an increase in
minimum wage and we don't even have it. It's going to
be on the ballot in November if we don't pass something
that would be acceptable… but there is no guarantee
that the minimum wage will increase…
SENATOR DAVIS said she also had a possible amendment to the bill
and asked if she could bring it up at this time.
CHAIRMAN STEVENS told her to go ahead.
SENATOR DAVIS said testimony from a representative of the
processors was that room and board fee would be around $8 now and
moved to delete where it says the department would be able to
review a grant for an increase above $15, language on lines 10 -
13.
MS. SYLVESTER said that was added because originally it was just
$15 dollars a day, the implication being that that was
reasonable.
But in the urban areas if there is alternative public
board and lodging, the department makes the
determination whether it's $15 or $20 per day on a
case-by-case basis. If we cap it at $15, then we're
potentially damaging the businesses that are located in
urban areas that already have determinations this
summer. Icicle Seafoods has $10 for board and $3.50 per
meal. Their determination is much higher than $15, so
we would be rolling them back.
SENATOR DAVIS said she wanted to the department to comment on
that and asked where, as Ms. Sylvester indicated, does it say in
the bill that they wouldn't be charged if they worked less than
eight hours.
CHAIRMAN STEVENS noted it was lines 5 and 6.
COMMISSIONER FLANAGAN said the proposed amendment would go back
to the House Labor and Commerce Committee CS. In putting the $15
without requiring the department to verify or certify higher
expenditures that did moot our fiscal note.
I mean, if you took this amendment, it would moot the
fiscal note that you're probably not going to adopt,
but you should, because you're just giving an unfounded
mandate to the department. So, that would remove one of
my arguments against the bill. There will be audits.
Right now we very rarely have audits on the places
where they are able to charge, because the costs are
kept low. But we're going to open up a whole new venue
involving thousands of employees and, again, maybe most
of them will go $15 or less, but the ones that go more,
it will generate a lot of complaints and a lot of
workload and backlog…We are opening up a new area of
complaint that we have to investigate when we have to
take thousands of workers that right now are not
required to pay their room and board and will be
charged.
SENATOR DAVIS asked if those places that have alternatives for
room and board already able to charge more than $15?
COMMISSIONER FLANAGAN replied that is correct.
SENATOR DAVIS said she thought this bill was designed to help
areas where there was no alternative housing.
COMMISSIONER FLANAGAN explained initially the bill specifically
mentioned remote processors and when they took out the work
"remote" and put in "$15", they caught up the ones that are
currently able to charge. A possible amendment would be to
delineate remote processors and no more. "That would moot our
fiscal note, because we would be in terms of enforcement actions,
where we are now…"
CHAIRMAN STEVENS declared a conflict saying that he has passed
employment history with the fisheries business and has a company
that dose services for companies that qualify under fisheries
business.
SENATOR AUSTERMAN objected.
SENATOR LEMAN moved that he be allowed to abstain from voting
because he sometimes fishes, but doesn't make much money at it.
"It's conceivable that I could loose money, if the seafood
processors have to pay more overhead."
SENATOR AUSTERMAN objected.
SENATOR DAVIS moved the amendment so they could vote on it.
SENATORS AUSTERMAN, LEMAN, and STEVENS voted nay; SENATOR DAVIS
voted yea; and the amendment failed.
SENATOR AUSTERMAN moved to pass CSHB 504(L&C) and the
accompanying fiscal note from committee with individual
recommendations. There were no objections and it was so ordered.
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