Legislature(2009 - 2010)BELTZ 211

02/24/2009 01:30 PM LABOR & COMMERCE

Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSSB 1(L&C) Out of Committee
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    SB 1-ALASKA MINIMUM WAGE                                                                                
CHAIR PASKVAN announced SB 1 to be up for consideration.                                                                        
SENATOR THOMAS  moved to  adopt CSSB  1, labeled  26-LS006\E, and                                                               
objected for discussion purposes.                                                                                               
2:05:23 PM                                                                                                                    
CHAIR PASKVAN explained  that SB 1 sets Alaska's  minimum wage at                                                               
$1 above  the federal  minimum wage.  If they  had used  the same                                                               
proportions of $.04  and $.42 applied to stamps over  the last 50                                                               
years, Alaska's  minimum wage  would be  an additional  $5/hr. at                                                               
$12.25. He  found that  the first legislature  50 years  ago said                                                               
the Alaska the minimum wage  would be approximately 50 percent of                                                               
the federal minimum wage, which in  2009 would be a difference of                                                               
$7.25. If  that same principle  were applied now, $3.62  would be                                                               
added to  the current  rate, which would  equate to  a $10.87/hr.                                                               
minimum wage.                                                                                                                   
At  the same  time  the  committee has  heard  from the  business                                                               
community that  these are troubling  times for the nation  and he                                                               
didn't want to  impose too much of  a burden at one  time, so the                                                               
CS  is at  $1  above federal  minimum wage  and  it takes  effect                                                               
January 1, 2010.                                                                                                                
SENATOR  BUNDE  mentioned  that  the   CS  does  not  involve  an                                                               
automatic escalator or COLA.                                                                                                    
CHAIR PASKVAN said that was correct.                                                                                            
SENATOR  THOMAS removed  his objection  and therefore,  version E                                                               
was before the committee.                                                                                                       
2:08:36 PM                                                                                                                    
SENATOR BUNDE moved to adopt Amendment 1.                                                                                       
                          AMENDMENT 1                                                                                       
     OFFERED IN THE SENATE                                                                                                      
     TO SB 1                                   BY SENATOR BUNDE                                                                 
     Page 1, line 1, following "Act":                                                                                         
         Insert "relating to the minimum hourly wage,"                                                                        
     Page 1, line 12, following "section":                                                                                      
          Insert "except as provided in (d) of this                                                                         
     Page 2, following line 12:                                                                                                 
     Insert a new bill section to read:                                                                                         
        "* Sec. 2.  AS 23.10.065 is amended by  adding a new                                                                
     subsection to read:                                                                                                        
          (d)  An employer may apply tips or gratuities                                                                         
     bestowed upon  an employee as  a credit  toward payment                                                                    
     of  the minimum  hourly wage  required by  this section                                                                    
     equal to  30 percent of  that minimum wage.  The credit                                                                    
     may be applied only if the                                                                                                 
               (1)  employee receives tips or gratuities in                                                                     
     the course of the employment;                                                                                              
               (2)  tips or gratuities equal or exceed an                                                                       
     average hourly  amount of at  least $15  calculated for                                                                    
     the pay period for which the credit is applied;                                                                            
               (3)  amount of tips or gratuities can be                                                                         
     determined by  the employee's declaration  for purposes                                                                    
     of  26  U.S.C.  3101 (Federal  Insurance  Contributions                                                                    
     Act); and                                                                                                                  
               (4)  employee was informed by the employer                                                                       
     of the provisions  of this subsection at  least 30 days                                                                    
     before  an  employer  first elects  to  apply  tips  or                                                                    
     gratuities as  a credit toward  payment of  the minimum                                                                    
     hourly wage of that employee."                                                                                             
     Renumber the following bill section accordingly.                                                                           
SENATOR THOMAS objected for discussion purposes.                                                                                
CHAIR PASKVAN announced an at ease at 2:09 p.m.                                                                                 
2:10:24 PM                                                                                                                    
CHAIR PASKVAN called the meeting back to order at 2:10.                                                                         
SENATOR  BUNDE   explained  that  a   lot  of  people   from  the                                                               
hospitality industry have  testified that wait staff  is often in                                                               
the $20-wage category and they would  get a raise when the people                                                               
in the  back of the house  who are already working  for more than                                                               
minimum wage, but  substantially less than $20/hr.  would not get                                                               
a raise. He didn't think Amendment  1 would cost anything, and it                                                               
would help businesses maintain jobs.                                                                                            
SENATOR  THOMAS said  he didn't  understand objections  to tipped                                                               
employees  getting a  minimum wage  increase.  Many places  share                                                               
2:15:21 PM                                                                                                                    
SENATOR MEYER said he understands  that 45 other states have some                                                               
sort of a tip  credit, and he asked Senator Bunde  how he came up                                                               
with 30  percent more  versus 10  or 15  percent. He  agreed with                                                               
Senator Thomas that if he has  a good waiter or waitress he wants                                                               
to reward them,  and this amendment would reduce  what they would                                                               
2:17:57 PM                                                                                                                    
A roll  call vote  was taken. Senator  Bunde voted  yea; Senators                                                               
Meyer,  Davis,  Thomas and  Paskvan  voted  nay; so  Amendment  1                                                               
SENATOR BUNDE  said since the  legislature proposed to  receive a                                                               
50 percent pay raise and since  the amount proposed in the CS was                                                               
not  based  on any  hard  data,  he  wanted to  offer  conceptual                                                               
Amendment 2  to: "Instead of  a dollar more than  federal minimum                                                               
wage, which  would make it  $8.15 instead of $7.15,  my amendment                                                               
would  make  the  minimum  wage  at $14.30,  double  what  it  is                                                               
currently,  similar to  the proposal  to  double our  legislative                                                               
salary. That seems to be as much a precedent as anything."                                                                      
He added that  with this amendment, people at  minimum wage would                                                               
make  about  $570/wk. or  almost  $2300/mo.  or $27,500/yr.  That                                                               
would  take  them  to  about current  legislative  pay  levels  -                                                               
substantially above the poverty level.                                                                                          
SENATOR THOMAS objected  and said that people  are concerned with                                                               
raising the  minimum to $1 -  $1.50, and they would  be even more                                                               
concerned  with this  figure. He  believed the  CS addressed  the                                                               
major  complaints  he has  heard  and  he  sees  in most  of  the                                                               
restaurants he goes to that people  move up. People have said the                                                               
reason  they have  the lower  wage  is because  it's a  beginning                                                               
2:21:49 PM                                                                                                                    
SENATOR  BUNDE  said,  "The current  proposal  leaves  people  in                                                               
poverty, and if  you want to take them out  of poverty, here's an                                                               
opportunity to do it."                                                                                                          
SENATOR  THOMAS   said  the  restaurateurs  who   have  commented                                                               
anecdotally said few  of these people were living  in poverty and                                                               
were making  anywhere from $30,000  to $60,000. Some of  that has                                                               
to be taken factually.                                                                                                          
2:22:35 PM                                                                                                                    
A roll  call vote  was taken. Senator  Bunde voted  yea; Senators                                                               
Meyer, Davis,  Thomas and  Paskvan voted  nay; and  so conceptual                                                               
Amendment 2 failed.                                                                                                             
AL LEVINSON, Restaurant  owner, Anchorage, wanted to  know if the                                                               
tip credit (Amendment 1) failed.                                                                                                
CHAIR PASKVAN said that it had failed.                                                                                          
2:24:08 PM                                                                                                                    
VINCE  BELTRAMI,  President,  Alaska  AFL-CIO,  supported  SB  1.                                                               
However, he was a little  disappointed they lowered the amount to                                                               
$1  over  the  federal  minimum  wage  and  eliminated  the  CPI.                                                               
Washington and Oregon have had  good experiences using the CPI in                                                               
terms  of  both  jobs  and   business.  Recent  data  shows  that                                                               
Washington had an over 10  percent increase in restaurant and bar                                                               
employment from  the time it  passed the increase up  until 2006,                                                               
"which  punched a  hole in  the  argument that  the minimum  wage                                                               
increase  is  bad for  business."  Other  studies have  shown  no                                                               
evidence of  negative employment effects  on small business  as a                                                               
result of increasing the minimum wage.                                                                                          
MR.  BALTRAMI said  he found  a paper  published by  the National                                                               
Employment Law Project that speaks  to Alaska's tipped employees.                                                               
Senator Thomas  and Senator Meyer hit  the nail on the  head when                                                               
he said a tip credit is  punitive to waiters and waitresses, some                                                               
of whom  are professional. A lot  of people make their  living on                                                               
tips; since  the last  minimum wage increase  in 2003,  they have                                                               
not  had  an increase.  There  has  been  a roughly  18  percent-                                                               
increase in the  cost of living without a  comparable increase in                                                               
He has seen  a lot of menu  prices go up with  the increased cost                                                               
of  business, but  since employees  aren't getting  increases, he                                                               
wasn't sure  how negatively impacted the  restaurant owners would                                                               
really be  with this raise.  But higher  wages could result  in a                                                               
positive impact  of more people  being able  to go out  and spend                                                               
money and  spend it  in their establishments  and in  the general                                                               
economy. He also  mentioned that he is gathering  the initial 100                                                               
signatures for a  ballot initiative to raise the  minimum wage to                                                               
what was originally proposed in SB 1.                                                                                           
SENATOR BUNDE asked if he would have supported his Amendment 2.                                                                 
MR.   BELTRAMI  replied   there   has  to   be   an  element   of                                                               
reasonableness, and it wasn't realistic.                                                                                        
CHAIR PASKVAN closed public testimony.                                                                                          
2:30:59 PM                                                                                                                    
SENATOR  THOMAS moved  to pass  CSSB 1(L&C)  from committee  with                                                               
individual recommendations and attached fiscal notes.                                                                           
SENATOR BUNDE objected.                                                                                                         
A roll  call vote  was taken. Senators  Thomas, Meyer,  Davis and                                                               
Paskvan voted yea; Senator Bunde  voted nay; so CSSB 1(L&C) moved                                                               
from committee.                                                                                                                 

Document Name Date/Time Subjects
SB01 - Alaska Minimum Wage - Bill Packet.pdf SL&C 2/5/2009 1:30:00 PM
SL&C 2/12/2009 1:30:00 PM
SL&C 2/17/2009 1:30:00 PM
SL&C 2/24/2009 1:30:00 PM
SB 1
SB84 - AIDEA Bonding Limits.pdf SL&C 2/17/2009 1:30:00 PM
SL&C 2/24/2009 1:30:00 PM
SL&C 2/26/2009 1:30:00 PM
SB 84