Legislature(1993 - 1994)
02/22/1994 03:00 PM House 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
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."
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