Legislature(1993 - 1994)
02/22/1994 03:00 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE LABOR AND COMMERCE STANDING COMMITTEE February 22, 1994 3:00 p.m. MEMBERS PRESENT Rep. Bill Hudson, Chairman Rep. Joe Green, Vice Chair Rep. Brian Porter Rep. Bill Williams Rep. Eldon Mulder Rep. Joe Sitton MEMBERS ABSENT Rep. Jerry Mackie COMMITTEE CALENDAR *HB 459: "An Act relating to liquidated damages and attorney fees for minimum wage and overtime compensation claims." PASSED OUT OF COMMITTEE HB 403: "An Act requiring that automobile liability insurance include coverage for uninsured or underinsured motor vehicles and an offer of policy limits for that coverage equal to coverage voluntarily purchased for bodily injury or death; and providing for an effective date." PASSED OUT OF COMMITTEE *HB 309: "An act relating to disposals of state land within five miles of the right-of-way of the Dalton Highway to a licensed public utility or a licensed common carrier." POSTPONED UNTIL FEBRUARY 24, 1994 WITNESS REGISTER PERRY GROVER, Labor Relations Attorney 550 W. 7th Ave., Suite 1450 Anchorage, Alaska 99501 Phone: 257-5300 POSITION STATEMENT: Supported HB 459 BRUCE WEYRAUCH, Attorney Faulkner, Banfield, Doogan & Holmes Law Offices 302 Gold St. Juneau, Alaska 99801 Phone: 586-2210 POSITION STATEMENT: Supported HB 459 RUPE ANDREWS, Volunteer AARP 9416 Long Run Drive Juneau, Alaska 99802 Phone: Not given POSITION STATEMENT: Opposed sections of HB 459 HOWARD JAEGER Alaska Independent Insurance Agents and Brokers Shattuck & Grummett, Inc. 301 Seward St. Juneau, Alaska 99801 Phone: 586-2414 POSITION STATEMENT: Supported HB 403 JOHN GEORGE, Lobbyist National Association of Independent Insurers 9515 Moraine Way Juneau, Alaska 99801 Phone: 789-0172 POSITION STATEMENT: Supported HB 403 PREVIOUS ACTION BILL: HB 459 SHORT TITLE: DAMAGES & ATTY FEES FOR UNPAID WAGES SPONSOR(S): LABOR & COMMERCE JRN-DATE JRN-PG ACTION 02/09/94 2321 (H) READ THE FIRST TIME/REFERRAL(S) 02/09/94 2321 (H) L&C, STATE AFFAIRS, JUDICIARY 02/22/94 (H) L&C AT 03:00 PM CAPITOL 17 BILL: HB 403 SHORT TITLE: AUTOMOTIVE LIABILITY INSURANCE COVERAGE SPONSOR(S): LABOR & COMMERCE JRN-DATE JRN-PG ACTION 01/26/94 2155 (H) READ THE FIRST TIME/REFERRAL(S) 01/26/94 2155 (H) LABOR & COMMERCE, STATE AFFAIRS 02/03/94 (H) L&C AT 03:00 PM CAPITOL 17 02/03/94 (H) MINUTE(L&C) 02/22/94 (H) L&C AT 03:00 PM CAPITOL 17 BILL: HB 309 SHORT TITLE: DISPOSAL OF DALTON HWY RIGHT-OF-WAY LAND SPONSOR(S): REPRESENTATIVE(S) THERRIAULT,James JRN-DATE JRN-PG ACTION 01/03/94 2007 (H) PREFILE RELEASED 01/10/94 2007 (H) READ THE FIRST TIME/REFERRAL(S) 01/10/94 2008 (H) L&C, RESOURCES, FINANCE 01/11/94 2034 (H) COSPONSOR(S): JAMES 02/22/94 (H) L&C AT 03:00 PM CAPITOL 17 ACTION NARRATIVE TAPE 94-14, SIDE A Number 001 CHAIRMAN BILL HUDSON convened the meeting at 3:11 p.m. HB 459 - DAMAGES & ATTY FEES FOR UNPAID WAGES REP. ELDON MULDER explained that HB 459 attempts to correct a provision in statute which pertains to wage and hour. Recently, an interpretation by the court posed a problem with liquidated damages. Rep. Mulder went on to explain that when there is a dispute regarding underpaid or unpaid overtime compensation, liquidated damages double the amount in dispute. This is over what the federal law provides. REP. MULDER stated that our statutes were interpreted to mean that disputes could be handled by either the Department of Labor or administratively between the individual making the claim and the employer, out of court for less than liquidated damages. REP. MULDER said in the Kinney Shoe case, the court interpreted the statute to read differently then what was being done. The court ruled that no case could be settled for less than liquidated damages. Rep. Mulder contends this was not what the legislature intended and HB 459 would correct and clarify this situation. Number 100 CHAIRMAN HUDSON noted the Department of Labor supported HB 459, but offered a suggestion to expand the definition of good faith to include affirmative action taken by the employer to comply with state law. The department also wants section 4, regarding the retroactivity provision. REP. MULDER explained that the issue is basically how do you interpret good faith. As it stands now, the court may award less than liquidated damages if it believes the employer legitimately was unaware of the underpaid or unpaid compensations. REP. MULDER stated the reason the definition of good faith has not been expanded at this time is because there are precedent setting cases that have determined what good faith means, and to expand the definition may cloud the issue. REP. MULDER responded to the Department of Labor's other concern by saying the provision in HB 459 regarding retroactivity was put in to make a level playing field from before the pre-Kinney shoe case to post-Kinney. It was never the intent of this bill to be overly punitive. Number 185 PERRY GROVER, Labor Relations Attorney, testified in support of HB 459. He noted the Alaska Wage and Hour Act is patterned after the Federal Fair Labor Standards Act. Alaska mandates liquidated damages, but federal law and most other states allow a very narrow exception that an employer can show it acted in good faith and reasonably believed the position was not subject to overtime. The court could then use its discretion not to award liquidated damages. MR. GROVER believes that HB 459 will leave liquidated damages as a penalty, but will allow employers the exception of good faith. MR. GROVER commented that HB 459 would also reinstate the authority with the commissioner of Labor, to waive liquidated damages if he sees fit. This was the case prior to the Kinney Shoe case but not after. MR. GROVER believes that subsection (f) will undue the part of the Kinney Shoe case where the Supreme Court said that private settlements are void. MR. GROVER stated the intention of the drafters of this bill regarding good faith was to use the same standards the federal government and other states have been using. He feels if Alaska uses any other language than the federal government, it would just encourage lawsuits. MR. GROVER said the reason the effective date was broken into two operative provisions is because the commissioner of Labor wanted section 3(e) to become effective on the effective date of the Act. The other provisions provide for any cases that are pending to use these new standards clarified by HB 459. Number 372 REP. JOE GREEN asked what the section on reasonable attorneys fees meant. MR. GROVER responded that reasonable attorney fees would be determined under Alaska Court Rule 82. Number 400 BRUCE WEYRAUCH, Attorney, Faulkner, Banfield, Doogan & Holmes, mentioned his concerns regarding HB 459. Mr. Weyrauch stated that Alaska is unique in its huge seasonal workforce. Those companies and businesses that come in to the state to do work on a seasonal basis generally don't pay as much attention to our laws as those companies who stay here. Number 440 MR. WEYRAUCH stated the wage and hour laws were intended to be strictly enforced, and as the Supreme Court said in the Kinney Shoe case, very punitive in nature, if they are not followed. Number 450 MR. WEYRAUCH suggested an amendment to HB 459 that would avoid litigation and allow the Department of Labor to get involved in the front end of the issue. MR. WEYRAUCH suggested a second amendment to provide supervision by the commissioner of Labor of any payment of the unpaid minimum wages or the unpaid overtime in dispute. Number 477 RUPE ANDREWS, Volunteer, AARP, expressed his concern that HB 459 did not provide any supervision of wage and hour settlements to protect senior citizens. Number 490 CHAIRMAN HUDSON asked if there were any kinds of protection in current law for seniors. Number 496 MR. WEYRUACH answered no. REP. MULDER asked Mr. Grover to respond to the points just made. Number 510 MR. GROVER disagreed with Mr. Weyrauch's testimony. He believes even attorneys in the field of labor law disagree sometimes on the issues, and that employers who in good faith have not paid overtime are assessed liquidated damages. MR. GROVER noted that private settlements are allowed in all other areas of law, but wage and hour cases. Number 550 REP. MULDER stated that section (f) of the bill is the guts of the bill that allows for private settlements. Number 572 REP. BRIAN PORTER stated he does not support amendments. Number 586 CHAIRMAN HUDSON asked if the federal law provides any extra assurances for anyone of advanced age. MR. GROVER stated the law did not distinguish by age. Number 600 CHAIRMAN HUDSON asked if there was anything in the revised law that would prevent seniors from receiving equal treatment. MR. GROVER answered no. Number 613 REP. MULDER said, senior citizens are not asking to be treated differently than anyone else. He added that any individual that felt they had been cheated, should talk to the Department of Labor. REP. JOE SITTON stated the Department of Labor has added a wage and hour position in the Governor's budget. CHAIRMAN HUDSON responded that the position referenced was not in the fiscal note attached to this bill, so it was apparently for other uses. TAPE 94-14, SIDE B Number 001 REP. MULDER stated that section 4 is arbitrary, but it would allow those cases that were started to be affected by HB 459 retroactively. Number 020 REP. PORTER stated he supports this retroactive clause in section 4 because it allows more cases the option of a private settlement, which in turn would free up the court system. Number 041 REP. BILL WILLIAMS moved that HB 459 be passed out of committee with individual recommendations and a zero fiscal note. There were no objections. HB 403 - AUTOMOTIVE LIABILITY INSURANCE COVERAGE CHAIRMAN HUDSON brought up HB 403 and invited testimony. Number 087 HOWARD JAEGAR, Shattuck and Grummett, Alaska Independent Insurance Agents and Brokers, testified in favor of HB 403. Mr. Jaegar stated that HB 403 is important for competition in the state. As pointed out in one of the letters in the committee packet, there are companies that come into the state, and because they write either youthful operators or impaired drivers, they only want to the state required limits of liability. State law, however, requires them to go further and offer the $1,000,000.00 to $2,000,000.00 uninsured/underinsured motorists limits. Very few people in Alaska are buying this type of insurance. MR. JAEGAR believes there are better ways to protect yourself than buying this type of insurance. The Alaska Independent Insurance Agents and Brokers support HB 403 because it allows people to still buy the higher liability limits. MR. JAEGAR noted that Alaska has the highest mandatory auto insurance in the United States. He added that if you add to that the cost of uninsured motorists, the price to the consumer goes up. MR. JAEGAR noted that a lot of youthful drivers don't want to buy uninsured motorists insurance and according to the present law, it's their option. JOHN GEORGE, Lobbyist, National Association of Independent Insurers, testified in support of HB 403. Mr. George said, when he was the Director of the Division of Insurance and the legislature changed the law, the state lost a number of insurance companies, because they were small practices writing offbeat insurance and couldn't afford the reinsurance necessary to cover one or two million dollars of underinsured or uninsured motorists coverage. MR. GEORGE added his clients believe that coverage ought to be offered under the golden rule theory, "do unto others as you would have them do unto you. If you buy high limits to protect them, then you ought to be able to make sure you get the same limit as if they had bought the coverage." MR. GEORGE stated that his organization does support HB 403, but wanted to make the point that it should support the offer of the limits of liability for underinsured/uninsured motorists that consumers buy for third party liability. He added that would happen under HB 403. Number 261 REP. PORTER moved that HB 403 be passed out of committee with individual recommendations and two fiscal notes. CHAIRMAN HUDSON adjourned the meeting at 4:13 p.m. BILLS SCHEDULED BUT NOT HEARD HB 309: "An Act relating to disposals of state land within five miles of the right-of-way of the Dalton Highway to a licensed public utility or a licensed common carrier."