Legislature(1999 - 2000)
03/10/1999 03:20 PM House L&C
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 10, 1999
3:20 p.m.
MEMBERS PRESENT
Representative Norman Rokeberg, Chairman
Representative Andrew Halcro, Vice Chairman
Representative Jerry Sanders
Representative Lisa Murkowski
Representative John Harris
Representative Sharon Cissna
MEMBERS ABSENT
Representative Tom Brice
COMMITTEE CALENDAR
* HOUSE BILL NO. 123
"An Act exempting individuals who provide ski patrol services on a
voluntary basis from the requirement for payment of minimum wage
and overtime compensation; and providing for an effective date."
- HEARD AND HELD
(* First public hearing)
PREVIOUS ACTION
BILL: HB 123
SHORT TITLE: EXEMPT VOL. SKI PATROL FROM MINIMUM WAGE
SPONSOR(S): LABOR & COMMERCE BY REQUEST
Jrn-Date Jrn-Page Action
3/03/99 342 (H) READ THE FIRST TIME - REFERRAL(S)
3/03/99 342 (H) L&C
3/10/99 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
CHRIS ROSS, Alaska Division Director
National Ski Patrol
P.O. Box 92207
Anchorage, Alaska 99509
Telephone: (907) 265-1113
POSITION STATEMENT: Testified in support of HB 123 on behalf of
the National Ski Patrol.
GAYLE JOSEPH
National Ski Patrol
2221 Tasha Drive
Anchorage, Alaska 99502
Telephone: (907) 344-5298
POSITION STATEMENT: Testified in support of HB 123.
SEAN EDWARDS, Southeast Region Director
Alaska Division
National Ski Patrol
4350 Taku Boulevard
Juneau, Alaska 99801
Telephone: (907) 789-1224
POSITION STATEMENT: Testified in support of HB 123.
LARRY DANIELS, Ski Area General Manager
Alyeska Ski Resort
P.O. Box 249
Girdwood, Alaska 99587
Telephone: (907) 754-2260
POSITION STATEMENT: Testified in support of HB 123.
RANDY CARR, Chief of Labor Standards and Safety
Wage and Hour/Mechanical Inspection
Division of Labor Standards and Safety
Department of Labor
P.O. Box 107021
Anchorage, Alaska 99510-7021
Telephone: (907) 269-4914
POSITION STATEMENT: Provided department position and information
on HB 123 and the proposed Version G committee substitute.
DWIGHT PERKINS, Deputy Commissioner
Department of Labor
P.O. Box 21149
Juneau, Alaska 99802-1149
Telephone: (907) 465-2700
POSITION STATEMENT: Testified on HB 123.
TERRY CRAMER, Legislative Counsel
Legislative Legal and Research Services
Legislative Affairs Agency
130 Seward Street, Suite 409
Juneau, Alaska 99801-2105
Telephone: (907) 465-2450
POSITION STATEMENT: Answered questions as bill drafter on the
proposed Version G committee substitute for HB 123.
ACTION NARRATIVE
TAPE 99-22, SIDE A
Number 0001
CHAIRMAN NORMAN ROKEBERG called the House Labor and Commerce
Standing Committee meeting to order at 3:20 p.m. Members present
at the call to order were Representatives Rokeberg, Halcro,
Sanders, Murkowski, Harris and Cissna.
HB 123 - EXEMPT VOL. SKI PATROL FROM MINIMUM WAGE
Number 0074
CHAIRMAN ROKEBERG announced the committee would hear HB 123, "An
Act exempting individuals who provide ski patrol services on a
voluntary basis from the requirement for payment of minimum wage
and overtime compensation; and providing for an effective date."
He stated the legislation was brought to the committee by the
Alaska Division of the National Ski Patrol (NSP) asking for an
exemption from Alaska's minimum wage law for volunteer ski
patrollers. He referred to AS 23.10.055, the wage and hour
exemptions, noting subsection (6) did not apply because ski
patrollers work in privately-owned, commercially-operated ski
resort areas. AS 23.10.055(6) reads:
AS 23.10.055. Exemptions. The provisions of AS
23.10.050 - 23.10.150 do not apply to ... (6) an
individual engaged in the activities of a nonprofit
religious, charitable, cemetery, or educational
organization where the employer-employee relationship
does not, in fact, exist, and where services rendered to
the organization are on a voluntary basis;
CHAIRMAN ROKEBERG commented material in the bill packet mentions
that there are also professional ski patrollers at these commercial
ski areas employed by the ski resort, but these paid employees are
augmented by the volunteer ski patrollers acting as agents of the
commercial operation. The distinction here is that the volunteers
are not patrolling for a nonprofit organization. Chairman Rokeberg
directed the committee's attention to the proposed Version G
committee substitute (CS) [1-LS0577\G, Cramer, 3/9/99] which he
indicated had a somewhat broader approach.
Number 0265
REPRESENTATIVE HARRIS made a motion to adopt the proposed CS for HB
123, Version G, labeled 1-LS0577\G, 3/9/99, as a work draft. There
being no objection, it was so ordered.
Number 0328
CHRIS ROSS, Alaska Division Director, National Ski Patrol,
testified via teleconference from Anchorage in support of HB 123.
He spoke from a prepared statement:
"Good afternoon Mr. Chairman, distinguished committee
members and guests. My name is Chris Ross. I'm employed
by NANA Development Corporation as the Corporate Health,
Safety and Environmental Manager. I currently serve on
the Alaska Safety Advisory Council as an industry rep
[representative] and chair the Governor's Annual Safety
and Health Conference. But today I am here as a member
of the National Ski Patrol system where I am a volunteer
patroller at Mt. Alyeska.
"During the past 22 years that I've been a patroller,
I've served in training and testing capacities, served as
a Region and Division Advisor, (indisc.) served as the
volunteer Patrol Director for the past ten years, and
currently serve as the Division Director for the Alaska
Division.
"Throughout the history of NSP, its members have devoted
a significant part of their lives to providing the public
with emergency care, rescue services, and education
programs that promote the safety and enjoyment of
mountain recreation. As a result, thousands of injured
people have received prompt, skillful emergency care, and
numerous lives have been saved.
"The history of NSP is rich and varied, reflecting the
dedication of members who are motivated by a love of
outdoor recreation and a desire to help those in need.
This long tradition of promoting the enjoyment and safety
of skiing prompted the United States Congress to grant a
federal charter to NSP under Public Rule 96-489. The NSP
is registered under Section 501(c)(1) of the IRS Code
[Internal Revenue Service Code] as a nonprofit
association, organized and operated exclusively for
educational purposes. Subordinate units are granted
exempt status under Section 501(c)(3).
"NSP is dedicated to providing its members with
educational programs and materials that will help them
fulfill their role within the outdoor recreation
community, whether in the context of skiing, snowboarding
or other activities. Normally, NSP members provide this
service under the direction of the ski area operator, a
public lands administrator, military base commander, ski
club or municipality. This is the important distinction,
as it forms the basis of the current issue."
Number 0482
"The mission of the national organization is somewhat
different than that of its subunits. The mission of the
NSP national organization is to provide its members with
educational resources to help them fulfill their duties
required of them by area management. The association's
goal is to provide high-quality training programs in
multiple disciplines and deliver these programs to the
members in a cost-effective manner.
"Nearly 30 percent of the patrollers registered in Alaska
are instructors. I think that's an amazing percentage.
We offer Emergency Care, Avalanche Training,
Mountaineering, Toboggan Handling, and all the skills
required. The Alaska Division of the NSP currently has
nearly 400 patrollers registered in eighteen patrols
across the state. Each of these patrols serves a
different ski area or geographical area in the case of
the Anchorage Nordic Patrol and Pioneer Peak Ski Patrol.
"Ski areas in Alaska are a bit unique in that we have
quite a mixture of ownership. We have publicly-owned
areas such as Hilltop and Juneau which are operated by
the municipality; privately-owned areas such as Moose
Mountain, Mount Alyeska and Aurora SkiLand; military
areas such as Hillberg, Arctic Valley Military, Birch
Hill, Ravenwood and Black Rapids; and privately-owned
nonprofit areas such as Alpenglow and Mount Eyak. We
also have the Nordic Patrol that services most all of ...
Southcentral Alaska on lands that are public, private,
municipal, state [and] federal."
Number 0588
"It's important to note, however, that a patrol, once
established at a given ski area, is under the supervision
and direction of the ski area's manager or local public
lands administrator, and must abide by the policies and
procedures established by management. The ski area
manager or public lands administrator ultimately
supervises and controls the patrolling activities of the
individual NSP members and patrols at each area. While
an area's paid patrollers are employees of the area, the
area's volunteer patrollers are agents of the area.
"By virtue of an oversight, however, the current wage and
hour statutes appear to make the use of volunteer patrols
impossible at many of our local ski areas. Because the
current wording in Alaska Statutes 23.10.055 do not
expressly allow volunteer ski patrollers, a valid
interpretation of the law is that volunteer ski
patrollers are not legally allowed to patrol at any
entity not specifically excluded by exemption; although
there is not consensus on the status of these patrollers
in those areas either, and I'm referring to the municipal
and nonprofit patrols. We do not believe the legislature
intended these results. The exemption already lists wage
and hour exemptions for groups such as volunteer
ambulance attendants, volunteer firemen, volunteers for
nonprofit associations and other groups."
Number 0681
"Because there are only two ski resorts in Alaska that
are nonprofit organizations - the other[s] being
military, municipal or for profit - these current
exemptions don't apply. We're asking for legislation to
include the term 'volunteer ski patroller' in AS
23.10.055 to allow the NSP to continue in the state of
Alaska. This is accomplished by the wording proposed in
CS House Bill 123. The legislation will have zero fiscal
impact. The legislation is fully supported by all of our
division ski patrol members, ski area operators and
public lands administrators.
"So why do we want volunteer patrollers to continue in
existence in Alaska? Probably the single biggest reason
is that without the support of the volunteer patrollers
in Alaska, ski patrols would cease to exist as we know
them today. As previously mentioned, nearly 30 percent
of the patrollers in Alaska are instructors. Take away
the instructor cadre and there will be no outdoor
emergency care, avalanche or mountaineering training, or
any other NSP educational programs. If you take away the
volunteer leadership and administration, there will be no
direction, patrol registration, newsletters, instructor
support group or funding to accomplish our program.
"The second reason is that the organization and the
individuals have a long tradition of service and support
to the outdoor community. The NSP has been volunteering
at ski areas for the past 60 years - nationally and in
Alaska. NSP started in Alaska in 1939 at the ... 'third
hut' in Juneau, (indisc.) hut. ... During that time, no
volunteer ever anticipated that they would be covered as
of the provisions of minimum wage or overtime laws. This
legislation will have no impact on the status of paid
patrollers; this is only to rectify the status of
volunteer patrollers."
Number 0794
"Finally, the members of NSP are some of Alaska's most
generous volunteers. In addition to volunteering their
time to serve the outdoor public, almost every patroller
is involved in additional civic, community or cultural
volunteer activity. Volunteerism must be allowed to
flourish and grow, especially as budgets get tightened
and we have fewer resources available. Alaska Division
NSP members ... offer the community a tremendous wealth
of talent, leadership, technical expertise and time.
You'll find our members working with mountain rescue
teams, Search and Rescue Dogs, American Red Cross,
American Heart Association, volunteer ambulance crews,
volunteer fire departments, local sporting events, and
many more activities.
"But until a new law is enacted we may not be able to
volunteer our time as ski patrollers at many of Alaska's
resorts.
"NSP volunteers want to continue to ski at the mountains
where we have been patrolling for the past sixty years.
We want the opportunity to continue to offer our talents
to recruit and train patrollers. And we want the
legislature to correct this oversight in wage and hour
[law] by passing House Bill 123.
"Thank you for your attention Mr. Chairman and
distinguished committee members, and I would be happy to
answer any questions you may have."
Number 0869
CHAIRMAN ROKEBERG questioned whether the lack of exemption from
minimum wage and other wage and hour Acts is a national or local
issue, wondering why this issue is being brought before the
legislature now.
MR. ROSS responded it was primarily a local issue because an
attorney's letter had said they would probably not be able to
patrol in Alaska anymore. In response to the chairman, Mr. Ross
said this attorney is affiliated with the Alyeska patrol.
CHAIRMAN ROKEBERG noted, then, it was a concern of Alyeska Ski
Resort that this might come into play.
Number 0959
GAYLE JOSEPH, National Ski Patrol, testified next via
teleconference from Anchorage in support of HB 123. She noted Mr.
Ross has stated the issues; she would like to speak from more of
personal level. Ms. Joseph stated she has been patrolling since
1991. Recently she became the patrol representative, indicating
she was responsible for meeting the volunteer force at Alyeska Ski
Resort and ensuring that the volunteer force meets the needs of
area management. She voiced support for HB 123 on behalf of the
their 60-plus active members. Being on the volunteer force and
having the opportunity to give back to the community provides a lot
of personal satisfaction. Ms. Joseph stated ski patrolling had
enhanced her life through numerous experiences "on the hill," and
she would be greatly saddened if this opportunity was removed
because of the wage and hour issue.
Number 1049
SEAN EDWARDS, Southeast Region Director, Alaska Division, National
Ski Patrol, came forward in Juneau to testify in support of HB 123.
He said he has been patrolling in Juneau for approximately 15
years. He is speaking as a general ski patroller and also to
assist Mr. Ross in the efforts to pass HB 123. Mr. Edwards spoke
from a prepared statement:
"Good afternoon Mr. Chairman, distinguished committee
members and guests. My name is Sean Edwards, I'm a
volunteer ski patroller here in Juneau. I've been
involved in the ski patrol for most of the last 15 years.
I've served as a patrol director, an outdoor emergency
care and avalanche instructor, and I'm currently the
Southeast Region Director for the Alaska Division.
"Today I'd like to talk a little bit about the roles we
play as members of the National Ski Patrol and at the
local patrol level. As members of the National Ski
Patrol, we're involved in providing our membership with
exceptional training programs such the outdoor emergency
care, avalanche, toboggan training, et cetera. As
members of the local patrol, we provide the emergency
rescue service and emergency care to the skiing public.
"As the skiing industry's evolved it became necessary to
define the roles of the National Ski Patrol, its members
and ski area management. Out of that, the Joint
Statement of Understanding was issued between the
National Ski Patrol and the National Ski Areas
Association [NSAA]. ... I've got a copy of that and I'll
give that to the committee. ... That really defines our
working relationship and what type of activities we
conduct ... under the national umbrella and what
activities we conduct under the auspices of the local
patrol."
Number 1166
CHAIRMAN ROKEBERG apologized for interrupting, obtaining a copy of
the joint statement of understanding from Mr. Edwards for
legislative counsel's [Terry Cramer] immediate review.
Number 1176
MR. EDWARDS continued his testimony:
"In a nutshell, when we're providing our members with the
National Ski Patrol training programs we're involved in
a nonprofit educational organization which, at least
according to my interpretation, exempts us from the
current minimum wage and hour laws. But when we're
providing our local patrol services we're acting as
agents of ski area management or the public lands
administrator, and this is where the situation becomes
less clear because of the variety of entities responsible
for ski area operations, such as private companies,
[public] lands administrators, military commanders' ski
clubs and municipalities."
"Most of the ski areas in the state are not run by
nonprofit organizations and this is where the potential
conflict lies. Without a specific exemption, many
volunteer patrollers may be subject to the wage and hour
laws, which would end volunteer ski patrolling in Alaska.
"And as volunteer patroller, I would ask that you pass
House Bill 123 which will allow myself and other 400 or
so members of the National Ski Patrol in Alaska to
continue volunteering and spending our time. And I thank
you for your attention."
Number 1237
CHAIRMAN ROKEBERG asked if the committee had any questions of Mr.
Edwards.
REPRESENTATIVE MURKOWSKI sought clarification as to the problem,
and why amendments to current statute were being brought forward in
two different areas. She commented on operating under the umbrella
of the National Ski Patrol's 501(3)(c) protection and the resulting
exemption from wage and hour issues, and then operating under a
different umbrella on the local level which somehow gave exposure.
Representative Murkowski asked Mr. Edwards what he is doing
differently when he is acting at the local level as opposed to when
he is volunteering for the National Ski Patrol.
Number 1294
MR. EDWARDS replied when the volunteers actually perform the patrol
and rescue services they are acting under the sole guidance and
direction of that particular ski area's management.
REPRESENTATIVE MURKOWSKI confirmed they were being directed in
Juneau, then, by the manager of Eaglecrest Ski Area (Eaglecrest).
MR. EDWARDS agreed, adding that the management determines all the
policies and procedures used at the local level. There is a
definite distinction between the nationally-organized training
programs and the actual provision of rescue services and emergency
care to the skiing public. To Mr. Edwards' understanding, this has
developed out of managing liability and risk for the ski areas. In
response to Representative Murkowski's additional question
regarding whether volunteer ski patrollers had any kind of
insurance through the National Ski Patrol, Mr. Edwards stated it
depends on the patrollers' activities. National Ski Patrol has an
umbrella liability policy covering training under the
nationally-approved and supervised programs. All other insurance
provided is provided through the area and ski area management.
When they are performing patrol duties on the ski slopes, they are
entirely covered under ski area management.
Number 1389
CHAIRMAN ROKEBERG clarified that Eaglecrest is a publicly-owned
facility, not a for-profit, which is one of the dilemmas here.
MR. EDWARDS agreed one of the problems is that there are multiple
entities running ski areas: military bases, the City and Borough
of Juneau, the Municipality of Anchorage, and a couple of nonprofit
groups.
CHAIRMAN ROKEBERG indicated the for-profit entities are the
problem, noting a witness from Alyeska Ski Resort (Alyeska) would
be testifying.
Number 1467
REPRESENTATIVE HALCRO asked the chairman what the difference is
between volunteering to pick up trash in a park for the
Municipality of Anchorage and volunteering to patrol a ski area.
CHAIRMAN ROKEBERG responded that is a defect of the current
statute. Referring again to AS 23.10.055(6), he noted there are 16
exemptions [AS 23.10.055(1) through (16)]. None of these
exemptions allow volunteering for a commercial or profit-making
organization. He indicated subsection (6) allows volunteering for
nonprofits.
REPRESENTATIVE HALCRO commented, then, he guesses he is not
understanding the bigger picture: if he is a volunteer, he is a
volunteer no matter who it is for. There is no contract, no wage
set.
CHAIRMAN ROKEBERG responded there is no exception or exemption in
the statute for a volunteer operating under the supervision of a
profit-making organization. The chairman indicated the "litany of
organizations" under the existing statute's subsection (6) allowed
to have volunteers is not clear. He noted the similarity between
subsection (6) and subsection (15) [AS 23.10.055(15)]. Subsection
(15) is basically the same except it is under "ATPA" [ATAP, Alaska
Temporary Assistance Program] type activities, referring to welfare
recipients. The hope is that, with the participation of the bill
drafter [Terry Cramer], Mr. Carr from the department [Department of
Labor (DOL)], et cetera, this situation can be resolved with
minimal impact. AS 23.10.055(15) reads:
(15) an individual engaged in activities for a nonprofit
religious, charitable, civic, cemetery, recreational, or
educational organization where the employer-employee
relationship does not, in fact, exist, and where services
are rendered to the organization under a work activity
requirement of AS 47.27 (Alaska temporary assistance
program); or
Number 1550
REPRESENTATIVE HARRIS confirmed that AS 23.10.055(5) allows
volunteering for a political subdivision of the state.
REPRESENTATIVE HALCRO reiterated his belief that if someone is
volunteering they are naturally exempt because they are not getting
paid.
CHAIRMAN ROKEBERG indicated the law requires minimum wage pay for
work unless one of the exemptions is met. He noted it hasn't been
enforced before because it is an unclear area; the committee wants
to make it clear, and that is what the ski patrollers are
requesting. Chairman Rokeberg confirmed Mr. Edwards thought this
is probably a fair assessment.
Number 1630
LARRY DANIELS, Ski Area General Manager, Alyeska Ski Resort,
testified next via teleconference from Anchorage in support of HB
123. He asked that the committee recognize the statute and the
National Ski Patrol's 60 years of service [in Alaska]. This
legislation does not change the operational status quo in Alaska or
at hundreds of ski areas nationwide where voluntary ski patrollers
have been serving for many years. Alyeska currently has nearly 60
voluntary patrollers and approximately 20 professional patrollers.
A fairly recent review of Alaska Statutes brought forward this
question of whether volunteers could provide this service at
for-profit organizations like Alyeska and other ski areas not
specifically exempted. House Bill 123 allows the 39-year-old
relationship at Alyeska to continue. Mr. Daniels said they hoped
the committee would view the legislation favorably and pass it on
to the full body.
CHAIRMAN ROKEBERG confirmed that Alyeska's legal advisor had
brought this question to Alyeska's attention. He asked if Alyeska
is concerned, both as an employer and a major ski resort operator,
that its operations may be detrimentally impacted if its attorney's
interpretation of the existing wage and hour laws is enforced.
Number 1737
MR. DANIELS agreed losing the majority of those 60 volunteers would
be a concern, but he indicated it is also a concern that those
individuals would be losing an avenue of voluntary and community
service they want.
CHAIRMAN ROKEBERG asked if Alyeska could, even under ideal
conditions, open all its trails without those 60 patrollers.
MR. DANIELS clarified the volunteers worked on a rotational basis;
all 60 are not there at one time.
CHAIRMAN ROKEBERG questioned if having to replace those volunteers
with employees being paid at least minimum wage wouldn't impact
Alyeska's ability to maintain all its areas and affect its
financial bottom line.
MR. DANIELS confirmed it would affect the bottom line, but noted
what would be lost is the training and years of service the
volunteers bring to the organization. If it came down to it, ten
professional patrollers could be hired; that would displace those
60 people and eliminate their avenue for providing services to the
skiing public.
CHAIRMAN ROKEBERG confirmed Mr. Daniels is familiar with the Joint
Statement of Understanding Between the National Ski Patrol and the
National Ski Areas Association, revised July 1993, provided to the
committee by Mr. Edwards, and that it is in effect at Alyeska under
Mr. Daniel's operations.
Number 1849
REPRESENTATIVE HARRIS asked for clarification on why the
legislation is being brought forward. He wondered if there is a
serious problem, if it is just for protection, or if it is for some
other reason.
MR. DANIELS replied one approach is to wait for a problem to arise.
He noted one hasn't in the last 39 years and there is some fair
likelihood it might never, since most of this statute has probably
been in effect for a long time. On other hand, if a problem did
arise, they might be dealing with all of the patrollers as a group,
whether the patrollers want that or not. This could potentially be
a very large problem. Mr. Daniels indicated he is unsure how the
Department of Labor would approach the situation.
Number 1920
MR. ROSS asked to share some possibly explanatory history with the
committee. He thinks they all understand the history of the
National Ski Patrol and can envision people skiing around in the
mountains for the past 60 years. Mr. Ross noted that about 20
years ago, no ski patroller anywhere would have imagined another
volunteer ski patroller filing a worker's compensation claim.
About 15 years ago, that happened for the first time. About 10
years ago, no one would have ever thought a ski patroller would
have sued a ski resort or the National Ski Patrol system; it would
have been unthinkable. However, 3 years ago that happened and
there was a $1.6 million judgement against the NSP. This judgement
has caused even more delineation between the actions of the NSP as
a national organization and the actions of the patrollers on the
local level. Mr. Ross indicated he and Mr. Daniels first thought,
when faced with the attorney opinion, that no patroller would ever
act on this, but they reconsidered and decided that might not be
the right approach. He confirmed for the chairman that this is
preventive legislation, and, for Representative Harris, that all
the situations he (Mr. Ross) had just described involved
volunteers.
CHAIRMAN ROKEBERG stated the committee would next hear from Randy
Carr with the Department of Labor, indicating he thought Mr. Carr
would help them "straighten this mess out."
Number 2000
RANDY CARR, Chief of Labor Standards and Safety, Wage and
Hour/Mechanical Inspection, Division of Labor Standards and Safety,
Department of Labor, testified next via teleconference from
Anchorage. He stated to the chairman that he would certainly try
but he doesn't know if this mess has an easy solution. Mr. Carr
said he would like to break the proposed CS into its two elements,
hopefully clarifying the history, application, and why it presents
a problem. Referring to Section 1 of Version G, Mr. Carr noted he
thinks the statute being amended [AS 23.10.055(6)] has been in
existence since the 1949 territorial legislature. This language
carved out a group of nonprofit organizations that could accept
volunteer service without being subject to Alaska's minimum wage
and overtime laws. This was modeled after a standard set in the
federal Fair Labor Standards Act (FLSA) which allowed any nonprofit
group to accept volunteer services. There is no history regarding
why the 1949 legislature limited Alaska's law to four types of
nonprofit groups: religious, charitable, cemetery, educational.
This means that unless a nonprofit is organized for one of those
four purposes, and the group's bylaws and original paperwork filed
with the IRS indicate that is the group's purpose, that nonprofit
group cannot legally avail itself of the services of volunteers.
Number 2077
MR. CARR commented everyone present knows that every nonprofit
group in the state functions out of the good services of volunteer
labor. The Department of Labor does not make an issue of actively
enforcing this by investigating nonprofit groups for illegal
volunteers, nor is the department interested in doing so. However,
these statutory rights exist. Mr. Carr noted in the last few years
the department has seen individuals coming forward asserting claims
for minimum wage or overtime under this statute because of services
the individuals were providing to a nonprofit group that did not
fit the exemption. Mr. Carr indicated there are numerous
non-exempt nonprofit organizations in Alaska. In response to
comments from the chairman, Mr. Carr confirmed that the Iditarod
dog sled race is not exempt and he indicated there is a large
problem with Alaska's future hosting of the 2001 Special Olympics
World Winter Games. He said he has been told about 3,000 people
will be involved in the Special Olympics group; that group is not
exempt under statute. Mr. Carr explained that the Department of
Labor saw the NSP bill as an opportunity to address an urgent
problem, and wanted to bring forward the language in the proposed
CS to expand the existing language in exemption (6) to incorporate
any type of nonprofit organization functioning in the context of
that organization's nonprofit activities. The DOL's intent with
the language of the proposed CS's Section 1 is to allow any
nonprofit organization to legitimately accept the services of
volunteer labor in its nonprofit activity. If an organization has
a for-profit arm, that for-profit arm should still be subject to
the Alaska Wage and Hour Act; an unfair competitive advantage
should not be allowed.
Number 2168
MR. CARR indicated the DOL believes the language in Section 1 of
Version G would address the current disparity between the state's
nonprofit groups. Mr. Carr indicated federal law already
recognizes these other nonprofit organizations. The change in
Section 1 would essentially allow the state to take the same
posture towards nonprofits as the Fair Labor Standards Act does.
Section 1 of Version G reads:
* Section 1. AS 23.10.055(6) is amended to read:
(6) an individual engaged in the nonprofit
activities of a nonprofit religious, charitable,
cemetery, or educational organization or other nonprofit
organization where the employer-employee relationship
does not, in fact, exist, and where services rendered to
the organization are on a voluntary basis and are related
only to the organization's nonprofit activities;
MR. CARR referred to the main language of the original HB 123, now
found in Section 2 of Version G. Section 2 of Version G reads:
* Sec. 2. AS 23.10.055 is amended by adding a new
paragraph to read:
(17) an individual who provides ski patrol services
on a voluntary basis.
MR. CARR noted the previous testimony has shown that many different
kinds of organizations benefit from the services of volunteer ski
patrollers. He expressed the desire to examine how these different
organizations are currently addressed in state and federal law and
how they would be addressed if this legislation passes. The
federal organizations like the National Park Service and the
military are exempt from FLSA and, by the state's exemptions [AS
23.10.055(5)], are exempt from the Alaska Wage and Hour Act.
Overtime is not a problem for these groups and they can accept
volunteers. Municipalities and other public entities/political
subdivisions are exempt from the Alaska Wage and Hour Act, but not
from FLSA. These groups must pay minimum wage and overtime to
their employees but FLSA allows political subdivisions to accept
volunteer services. Nonprofit groups are completely exempt under
FLSA and would be completely exempt if the state law is amended.
Regarding private for-profit businesses, the suggested language
would exempt private for-profit businesses from the obligation
under state law to pay minimum wage and overtime for any ski
patroller volunteering his or her services. However, those private
for-profit businesses would still be subject to FLSA. The current
proposed CS for HB 123 cannot address that; it will not give any
relief from FLSA liability.
Number 2289
CHAIRMAN ROKEBERG confirmed Mr. Carr's point is that they can
exempt it from state law, but not from federal.
MR. CARR agreed. The federal exposure will still be out there for
private for-profit businesses and, potentially, municipalities.
The current form of HB 123 would only take the state out of the
concern and make a federal case out of any case that might come
forward.
CHAIRMAN ROKEBERG commented that Mr. Carr's comments were germane
and appreciated, noting all the committee can do is what can be
done in the state of Alaska. The chairman indicated he feels it is
still a valuable exercise in going forward with what can be done in
this state.
Number 2319
MR. CARR agreed, but noted the point is that it would be important
for any entity operating under the exemption as proposed to
understand it still has the same obligation at the federal level.
These entities will still have the same exposure regarding
volunteer labor if this legislation passes.
CHAIRMAN ROKEBERG asked if the state DOL had any jurisdiction in
enforcing the federal wage and hour [Act].
MR. CARR said absolutely not; a matter not within the state's
jurisdiction is referred to the United States Department of Labor
(USDOL).
CHAIRMAN ROKEBERG confirmed with Mr. Carr that it is the duties of
the state Department of Labor to follow the public policies of the
state of Alaska as articulated by the legislature.
Number 2356
MR. CARR said the department has an additional concern with regards
to the legislation. This bill takes a very small group of people
who are employees under the law, volunteer ski patrollers working
for a private sector employer, and makes this group exempt. Once
these people are exempted, they don't have to be paid, they don't
have to be treated as employees. The department feels that sets a
very dangerous precedent. Mr. Carr indicated HB 123 sets a
precedent that some employees could be considered volunteers,
noting the possibility future legislation might be brought forward
requesting additional exemptions for other groups willing to
volunteers in exchange for tips, like counter help or bellhops. He
indicated that concluded his testimony and he was willing to answer
any questions with regards to the juxtaposition of the state and
federal laws, or the state's position regarding volunteers as a
whole.
CHAIRMAN ROKEBERG said he understood the department's feeling that,
as a departmental policy, it is a dangerous precedent to have an
exemption for a small group of people, but asked where the
exemption for volunteers under a commercial activity is in the
proposed CS.
MR. CARR said they are not suggesting in the proposed CS that
volunteers working under commercial activity be exempt. The last
portion of Version G's Section 1 would exclude anyone who is
working in a commercial activity for a nonprofit organization from
the modified exemption, with minimum wage and overtime still
required under the [state's] wage and hour Act.
CHAIRMAN ROKEBERG pointed out, then, that ski patrollers working at
Alyeska would not be exempt. The chairman indicated this is the
reason why both Mr. Carr and the bill drafter, Ms. Cramer, have
been asked to participate, and that the chairman also shares a
concern about adding another exempt group to the statute. He posed
the question to Mr. Carr and Ms. Cramer, "Is there a way we can
delete number 17 [subsection (17) of Version G] and put into the
subsection (6) in Section 1 of the CS, provisions for exemption for
volunteers ... under a commercial operation, ... without doing to
much damage to this thing. And then also using..." [TESTIMONY
INTERRUPTED BY TAPE CHANGE]
[From tape log notes: "Also using 'term of art' ... so we can
stipulate ski patrollers ..."]
TAPE 99-22, SIDE B
Number 0001
CHAIRMAN ROKEBERG continued, "... we can delete 17 as another
exemption and overcome your fears, but you seemed to have expressed
some concern about having a - any kind of volunteerism under the
guise of commercial operation. So, there we have what I'd like --
that is the proposition before the committee."
Number 0020
MR. CARR indicated agreement, adding, "And that is the crux of the
dilemma. When we first saw HB 123, I had not yet talked with Chris
[Mr. Ross] and I was not as educated on the background of National
Ski Patrol in Alaska, and how many different organizations it
serviced, as I am now. But we saw this as an opportunity to
perhaps take a (indisc.) which we thought addressed at the time
only ski patrol services to nonprofits, and expand that so that we
could address the other nonprofit problems that existed out there."
Mr. Carr noted since that time it has become evident that the
nonprofit side of the ski patrol in Alaska is a very, very small
aspect of the ski patrol's problem. The federal agencies don't
have a problem; the state/municipal agencies probably don't have a
problem because they can accept volunteers. The problem is with
the for-profit businesses. Mr. Carr noted he doesn't know how many
people or ski operations this involves. The existing law with the
suggested minor modifications in Section 1 of the proposed CS
pretty well address everyone else, but the CS's Section 1 does not,
and was not intended to, address a for-profit operation.
CHAIRMAN ROKEBERG indicated his understanding. He recognized that
Dwight Perkins, Deputy Commissioner, Department of Labor, wished to
comment.
Number 0083
DWIGHT PERKINS, Deputy Commissioner, Department of Labor, came
forward. He stated for the committee, for example, that Alyeska
has paid ski patrol staff and also the National Ski Patrol. The
National Ski Patrol is a national umbrella, as Representative
Murkowski touched on, using its [IRS] 501(c)(1) status as a
nonprofit. The National Ski Patrol is keeping that nonprofit
distinction, but because it is taking direction from Alyeska, an
employee-employer relationship exists. Mr. Perkins questioned Mr.
Carr, "And if not, shouldn't we be okay with the language that we
suggested as the change in the CS?"
MR. CARR replied the likelihood is that the relationship would be
one of a joint employer. Using the example of Alyeska: Alyeska is
going to manage and control the duties and pursuits of the ski
patrol on its grounds. The case law indicates that there is most
likely going to be a joint employer relationship, with Alyeska
being the employer on the private side and the nonprofit group
being the employer accepting volunteer services on the other side.
Mr. Carr stated, "So I think that's where the exposure arises - is
the control asserted by the ski operation puts them into a position
... in the eyes of the state and federal laws, and the courts'
interpretation of them, of a joint employer. Thus they suffer the
exposure."
Number 0193
REPRESENTATIVE MURKOWSKI noted she has reviewed the Joint Statement
of Understanding between the National Ski Patrol and the National
Ski Areas Association. In her reading, the individual ski areas
have the right to approve selection of volunteer patrols, the right
to dismiss, et cetera. However, Representative Murkowski said the
joint statement goes on to say that, notwithstanding, "'There is
nothing that shall vary the very clear non-employee status of
individual volunteer patrollers. Volunteer patrollers are not, and
have not, been employees, but agents ... when acting within the
scope of their assigned duties in view of the voluntary nature of
their patrolling services.'" She noted it seems clear that the
volunteer patrollers are not treated as employees, there isn't a
joint employer type of relationship or an employee-employer
relationship; it is a clear separation based their volunteer
responsibilities. The paraphrased section of the joint statement
of understanding reads:
"7. It is specifically understood between the parties to
this Agreement that nothing herein, and nothing contained
in any individual agreement between the NSP and
individual ski areas based on the Joint Statement of
Understanding, shall in any way vary the clear,
non-employee status of individual volunteer patrollers.
In fact, it is expressly understood between the NSP and
the NSAA, as well as the membership of both
organizations, that the volunteer patrollers are not and
have not been employees, but agents when acting within
the scope of their assigned duties, in view of the
voluntary nature of their patrolling services."
MR. PERKINS noted that was kind of what he had been driving at. He
stated, "I didn't see the tie there, and because they are truly a
nonprofit and they do have the ... 501(c) exemption, I thought we
could draw that distinction between the lodge, if you will, the
employee, as the employer and the employee relationship, which
would ... -- and then we could use the language that we suggested
as a blanket for all the nonprofits, because they're still acting
in the nonprofit capacity as ski patrollers, ... honestly I'm
confused too. ... I want to think there's a way that we can craft
this to where, without putting in an exemption just specifically
for ski patrollers, but what the language that Mr. Carr had
suggested to me for this amendment ..."
CHAIRMAN ROKEBERG noted Mr. Ross in Anchorage had wished to make a
comment.
Number 0285
MR. ROSS clarified that all patrollers at Alyeska, both paid and
volunteer, are members of the National Ski Patrol; all patrollers
in the state of Alaska, both paid and volunteer, are NSP members.
The National Ski Patrol is an educational organization, not a
mountain operations organization. Mr. Ross commented this is
confusing even within their own ranks because of the changes that
have taken place. The National Ski Patrol is not an employer and
has no employer liability "for any number of different reasons."
He indicated the NSP/NSAA joint statement of understanding was
crafted to guide that relationship when patrollers are on the
mountain but state law seems to supersede this. For example,
Alyeska volunteer patrollers are clearly covered under worker's
compensation even though they are agents, not employees. Under
current state law, a volunteer patroller could file a valid wage
and hour claim with the state. Mr. Ross pointed out the language
in the proposed CS that exempts commercial operations would take
patrollers away from Alyeska, "Moose Mountain," "SkiLand," and some
of the other smaller areas. This is about three-quarters of the
patrollers in the [NSP's] Alaska Division. This would additionally
remove the division director, trainers, and volunteer support.
Alyeska would have paid patrollers but no one to train them.
Eaglecrest would have patrollers but without all the division and
national support. Mr. Ross indicated the issue goes beyond simply
requiring commercial operations to replace volunteers with paid
staff.
Number 0400
REPRESENTATIVE HALCRO asked Mr. Ross if the NSP is doing anything
on the federal level to get this addressed in the Fair Labor
Standards Act.
MR. ROSS noted Mr. Carr had suggested it that day.
REPRESENTATIVE HALCRO indicated he thinks an additional exemption
for an individual providing the valuable service of volunteer ski
patrolling is not too much to ask for, and he is opposed to the
deletion of subsection (17), the proposed ski patroller exemption.
Representative Halcro compared this to some of the other exemptions
in existing statute, specifically naming the exemption for an
individual employed in the handpicking of shrimp [AS 23.10.055(3)].
Representative Halcro said it begs a question about the larger
picture, asking if volunteer course marshals at golf courses are
exposed.
Number 0478
REPRESENTATIVE SANDERS asked for clarification, questioning whether
there are paid volunteers and nonpaid volunteers.
MR. ROSS replied the specific distinction would be paid ski
patrollers and volunteer ski patrollers.
REPRESENTATIVE SANDERS asked for clarification on the problem
before the committee.
Number 0513
MR. CARR replied the difficulty is that it is illegal for a
for-profit business to have volunteers; it's considered an unfair
competitive advantage. In the ski patrol issue context, Alyeska
has a certain number of paid ski patrollers augmented by volunteers
providing the services necessary to cover the entire mountain. The
Department of Labor has not gone out and told Alyeska that it
cannot have volunteers. The problem is that there is legal
exposure. These volunteers have an entitlement to minimum wage and
overtime. If any of these volunteers, either in the ski patrol or
in any of the nonprofits not covered by the exemption [in AS
23.10.055(6)], decide they wish to be paid, they have a valid claim
and would be able to collect. Mr. Carr indicated there is no doubt
or defense regarding the ability to collect. He commented he
thinks that is the problem presenting itself here: Alyeska is
concerned that it has exposure, as it should be. If someone
decided they wanted to be paid for all his or her previous
volunteer services and has time records, this person could get an
attorney, file a minimum wage and/or overtime complaint, and would
be paid.
REPRESENTATIVE SANDERS said that seemed to him, then, to be the
problem. He asked if they couldn't write something disallowing
payment to those people for past services. He questioned if that
covered the problem, noting then there is no problem if the people
wanted to be paid for future services.
Number 0600
MR. CARR replied he didn't know if that could be written and would
have to think about it, commenting, "Because ... you would be
essentially sacrificing their rights retroactively."
REPRESENTATIVE SANDERS commented the people in question did that
when they volunteered, adding, "Now ... they don't want to
volunteer so they don't have any more rights now."
MR. CARR indicated the state has a lot of volunteers who don't
understand they even have these rights. He commented this might be
part of the reason the issue is coming forward. More and more
people are becoming aware that they may have a legal entitlement to
something and when things get tough, they decide they want those
wages.
REPRESENTATIVE SANDERS indicated his concern is that if this
enacted this year to protect volunteer ski patrollers, Alyeska
might decide it needs volunteer kitchen help next year.
CHAIRMAN ROKEBERG indicated volunteer ski patrollers have been
serving for 30 years.
Number 0660
REPRESENTATIVE HALCRO questioned whether Mr. Carr's testimony
regarding the existing exposure hadn't made the case for exempting
these people.
MR. CARR replied that could be argued both ways. The patrollers
have noted they haven't had a problem in 39 years and the law has
been in existence that entire time.
REPRESENTATIVE HALCRO said he could understand "the fear that the
camel's getting his nose under the tent here," but indicated he
doesn't think a large shift to volunteerism for commercial entities
is likely.
MR. CARR was not in agreement, stating, "Every (indisc.) getting
tighter, suppose this bill is passed and two years from now a ...
new manager at Alyeska says, '... I've got three paid ski patrol
people and I got a budget cut - I don't need them, I can replace
them with volunteers. So they're out the door and I'm gonna use
all volunteers.' And this would allow that."
Number 0709
REPRESENTATIVE MURKOWSKI asked Mr. Ross if voluntary ski patrollers
receive any form of compensation, such as free lift tickets.
MR. ROSS responded they receive a ticket for a day of skiing.
CHAIRMAN ROKEBERG asked Mr. Perkins if a ski lift ticket would be
considered taxable compensation under Alaska law.
Mr. Perkins referred that issue to the Department of Revenue and
the IRS.
Number 0769
REPRESENTATIVE CISSNA asked if the concern was that they would wind
up with slave labor - people willing to work for food and shelter
if times became very tough.
MR. CARR answered in the negative, although he supposed that was an
ultimate potential. The reason why commercial businesses cannot
have volunteer labor is because some commercial businesses are
well-equipped to accept volunteer labor but their competitor(s) may
not be able to get or keep volunteers. An unfair competitive
advantage is created in this situation. Mr. Carr indicated this
has been a constant enforcement problem at the federal level
although there haven't been a lot of problems at the state level.
At the federal level there have been numerous situations where a
business, for religious purposes, sets up a religious nonprofit
organization with volunteers, and that religious organization sets
up a for-profit business enterprise. This situation occurred in
Alaska regarding a gas station; all the church volunteers operated
the gas station and no one was paid. The other three gas stations
in that town complained to their legislators because they were
being put out of business. Mr. Carr stated this is trying to keep
the playing field level so there is no opportunity for abuse. He
noted that is not the problem with the ski resorts, but said that
is the overall reasoning behind the law. Mr. Carr commented he
realizes how they balance that with the problem before them today
is a very difficult question.
Number 0905
CHAIRMAN ROKEBERG noted the presence of Terry Cramer, Legislative
Counsel, at the meeting by the chairman's request. He asked Ms.
Cramer if it is possible, from a drafting standpoint, to include
the volunteers under a commercial entity by redrafting subsection
(6) [Section 1, Version G]. He expressed some concern about the
gas station analogy.
Number 0954
TERRY CRAMER, Legislative Counsel, Legislative Legal and Research
Services, came forward. She stated she has come up with some
language but is not sure it would preclude the gas station example.
It would include the National Ski Patrol. Ms. Cramer indicated the
proposed CS contains the tightest language, where both the National
Ski Patrol issue and the broadening of the nonprofit organization
are specifically addressed without attempts to blend the two
together. Ms. Cramer provided her possible language to the
committee, adding to the end of the proposed CS's Section 1 after
"and are related only to the organization's nonprofit activities",
the wording, "whether or not the activities of the individual are
performed under the direction of another for-profit organization".
Ms. Cramer commented it might be possible to omit the word
"another"; she additionally said it could be a for-profit or
nonprofit organization.
CHAIRMAN ROKEBERG stated, "under the direction of a for-profit
organization".
MR. PERKINS asked if just using "organization" would be inclusive
of for-profit.
Number 1045
MS. CRAMER indicated her concern about using only the word
"organization" in her suggested language is because the previous
use of "organization" in subsection (6) refers to nonprofit
organizations. She mentioned the language, "another for-profit or
nonprofit organization".
CHAIRMAN ROKEBERG asked if they could refer to business, as under
the business code. He noted the legislature had redefined
"business" last year to include nonprofits, indicating it is
applicable.
MS. CRAMER said she would have examine that definition.
CHAIRMAN ROKEBERG indicated the legislature had revised the
definition of business under the business license. Chairman
Rokeberg commented he guesses this goes back to the point: the
department opposes the addition of further exemptions. Noting Mr.
Carr's testimony and the gas station scenario, the chairman
questioned Mr. Perkins whether it wasn't better to have the tighter
language. He indicated he meant the current language in Version G.
Number 1126
MR. PERKINS asked if Mr. Carr had understood Ms. Cramer's comments
regarding the possible amendment.
MR. CARR answered in the affirmative. He indicated he agreed that
probably the best way to do it would be to leave the proposed CS in
its current form; that would be the "tightest language" discussed
so far.
CHAIRMAN ROKEBERG noted this would require the department to accept
subsection (17). The chairman indicated he thinks the proposed CS
corrects a serious, long-overdue problem in the existing statute's
subsection (6), and a that very unique set of circumstances exist
with the National Ski Patrol. The volunteer patrollers try to
posit themselves as agents on a volunteer basis of a for-profit
investor-owned corporation. The chairman commented on the hybrid
nature of the relationship. However, he noted, as Ms. Cramer
indicated, attempting to "open up" the statute on a more generic
basis allows possible abuse such as the previously-mentioned gas
station situation. The committee is trying to accommodate the
Department of Labor and organized labor's antipathy toward
additional exemptions, but the chairman said he doesn't think it
works. He asked if Mr. Perkins had an opinion.
Number 1221
MR. PERKINS said he certainly understood the chairman's comments,
noting it appears both he (Mr. Perkins) and Representative
Murkowski agreed regarding the "arm's length, if you will," and it
not being arm's length far enough according to Mr. Carr. Mr.
Perkins indicated he would defer to Mr. Carr's knowledge regarding
what other groups might request exemptions if subsection (17) is
added to current statute.
CHAIRMAN ROKEBERG said he isn't concerned about that if the groups
can make their case and the process is followed. The chairman
noted they had exposed a major defect in subsection (6) [in current
statute], with a lot of benefit to that. Nevertheless, the
volunteer ski patrollers have a legitimate request. The chairman
commented his position is that the policy of the department and of
organized labor in Alaska needs to bend a bit when it is doing the
right thing. He said he was willing to allow the department more
time if it thought it could come up with a "wordsmithing fix,"
expressing his own scepticism and deferring to Mr. Carr.
MR. PERKINS said he would like to review this with the
commissioner. He indicated the department would be present if the
chairman would hold the bill until the next committee meeting.
Number 1337
REPRESENTATIVE MURKOWSKI inferred that by amending subsection (6)
they would solve a lot of potential problems, and therefore perhaps
would not see requests in the immediate future for the possible
additional exemptions Mr. Perkins is concerned about.
REPRESENTATIVE HALCRO stated there are exemptions because there
need to be, indicating he agreed with the chairman's previous
comment. Laws are obvious designed to protect some, and in this
case he feels the ski patrol needs to be protected against unfair
claims. Representative Halcro said he sees no problem adding
subsection (17) for ski patrol services on a voluntary basis,
indicating some of the current exemptions, like the handpicking of
shrimp [AS 23.10.055(3)], are for commercial operations. He
doesn't see the argument and thinks the committee should add the
exemption.
Number 1448
CHAIRMAN ROKEBERG strongly agreed. Without the National Ski
Patrol, there would be no avalanche or mountain rescue teams in
Alaska, or in the nation. He asked if there were further comments
or discussion, announcing that HB 123 would be held till the next
meeting at the request of Mr. Perkins, Deputy Commissioner of the
Department of Labor. However, the chairman's intention is to move
the legislation out of committee at that time unless the department
or another party can provide a solution.
ADJOURNMENT
Number 1500
CHAIRMAN ROKEBERG adjourned the House Labor and Commerce Standing
Committee meeting at 4:40 p.m.
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