Legislature(2005 - 2006)
02/22/2005 02:41 PM Senate L&C
| Audio | Topic |
|---|---|
| Start | |
| SB93 | |
| SB105 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
February 22, 2005
2:41 p.m.
MEMBERS PRESENT
Senator Con Bunde, Chair
Senator Ralph Seekins, Vice Chair
Senator Bettye Davis
Senator Johnny Ellis
MEMBERS ABSENT
Senator Ben Stevens
COMMITTEE CALENDAR
SENATE BILL NO. 93
"An Act relating to commercial fishing permit and vessel license
fees; and providing for an effective date."
MOVED SB 93 OUT OF COMMITTEE
SENATE BILL NO. 105
"An Act relating to the retrospective application and
applicability of the overtime compensation exemption for flight
crew members; and providing for an effective date."
HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 93
SHORT TITLE: FISHING PERMIT AND VESSEL LICENSE FEES
SPONSOR(s): SENATOR(s) STEVENS B
02/04/05 (S) READ THE FIRST TIME - REFERRALS
02/04/05 (S) L&C, FIN
02/15/05 (S) L&C AT 1:30 PM BELTZ 211
02/15/05 (S) Heard & Held
02/15/05 (S) MINUTE(L&C)
02/22/05 (S) L&C AT 1:30 PM BELTZ 211
BILL: SB 105
SHORT TITLE: OVERTIME WAGES FOR FLIGHT CREW
SPONSOR(s): SENATOR(s) SEEKINS
02/14/05 (S) READ THE FIRST TIME - REFERRALS
02/14/05 (S) L&C, JUD
02/22/05 (S) L&C AT 1:30 PM BELTZ 211
WITNESS REGISTER
Tom Daniel
Hageland Aviation
1029 W. 3rd Ave Suite 300
Anchorage, AK 99501
POSITION STATEMENT: Supports SB 105.
Mike Hageland
Hageland Aviation
3325 Foxridge Circle #1
Anchorage, AK 99518
POSITION STATEMENT: Supports SB 105.
Mike Bergt
Alaska Central Express
3032 Bottles Bay Loop
Anchorage, AK
POSITION STATEMENT: Supports SB 105.
Bruce McGlasson
Grant Aviation
3608 Carleton Ave
Anchorage AK
POSITION STATEMENT: Supports SB 105.
Jason A. Wilson
Hageland Aviation
P.O. Box 210375
Anchorage, Alaska 99521
POSITION STATEMENT: Supports SB 105.
Brett Harris
Hageland Aviation
P.O. Box 2018 Tabasco Cat Dr.
Palmer, Alaska 99645
POSITION STATEMENT: Supports SB 105.
Tom Nicolos
Cape Smythe Air Service
PO Box 549
Barrow, Alaska 99723
POSITION STATEMENT: Supports SB 105.
Jim Wilson
Coastal Helicopters
8995 Yandunkin Dr.
Juneau, Alaska 99801
POSITION STATEMENT: Supports SB 105.
Devon Smith
Hageland Aviation
4600 Caravelle Ct.
Anchorage, Alaska 99502
POSITION STATEMENT: Supports SB 105.
Michael Charlie
Hageland Aviation
Bethel, Alaska 99559
POSITION STATEMENT: Supports SB 105.
Bob Hajdukovich
Frontier Flying Service
Fairbanks, Alaska
POSITION STATEMENT: Supports SB 105.
Grant Thompson
Cape Smythe Air Service
Barrow, Alaska 99723
POSITION STATEMENT: Supports SB 105.
Karen Casanovas
Executive Director, Alaska Air Carriers Association (AACP)
Anchorage, Alaska
POSITION STATEMENT: Supports SB 105
ACTION NARRATIVE
CHAIR CON BUNDE called the Senate Labor and Commerce Standing
Committee meeting to order at 2:41:02 PM Present were Chair
Bunde and Senators Seekins and Ellis.
SB 93-FISHING PERMIT AND VESSEL LICENSE FEES
CHAIR BUNDE announced SB 93 to be up for consideration.
2:48:30 PM
FRANK HOHMAN, Commercial Fisheries Entry Commission, supported
SB 93.
2:49:07 PM
SENATOR ELLIS arrived.
2:54:46 PM
SENATOR SEEKINS moved to pass SB 93 out of committee. There
were no objections, it was advanced.
SB 105-OVERTIME WAGES FOR FLIGHT CREW
2:55:54 PM
MR. HOVE, staff to Senator Seekins, sponsor SB 105, stated that
it clarifies the legislative intent of SB 54 from the 23rd
Legislature by retroactively removing flight crews from the
scope of statutory overtime compensation required under the
Alaska Wage and Hour Act (AS 23.10.060.) Retroactivity would
apply to work performed on or after January 1, 2000. He said
that the aviation industry faces increasing cost burdens as the
result of growing security demands and fuel prices and that SB
105 would alleviate some of this burden by eliminating the costs
of superfluous lawsuits.
2:57:17 PM
MR. HOVE stated that until 2003 it was the Department of Labor's
(DOL) uncodified policy that in-state air carriers were exempt
from the Alaska Wage and Hour Act's overtime provisions. This
policy was rooted in a 1980 attorney general's opinion, which
cited that both the federal Railway Labor Act and the US
Constitution's commerce clause preempted flight crews from
overtime compensation provided in the Alaska Wage and Hour Act.
He continued to say that nevertheless, five years ago,
uncertainty crept into the DOL's policy as a result of a lawsuit
that sought overtime compensation for pilots. SB 105 seeks to
fulfill the original intent of SB 54 by making its provisions
retroactive to January 1, 2000.
CHAIR BUNDE asked if he could have some assurance that this bill
would cure the problem.
MR. HOVE responded that in his understanding, the bill would
address the problem in its entirety.
3:00:24 PM
THOMAS M. DANIEL, representing Hageland Aviation, supported SB
105. He is currently representing Hageland Aviation in a class
action lawsuit asserting overtime for pilots, which continues
despite the exempting legislation passed in 2003. He explained
that since 1949, pilots of commercial aircraft carriers have
been exempt from overtime under the federal Railway Labor Act,
which applies to all air carriers engaged in interstate and
foreign commerce. In Alaska they transport the US mail. Until
2003, there were no similar exemptions under state law.
However, the Alaska attorney general issued an opinion in 1980
stating that Alaska air carriers were exempt under state law and
that policy was followed by the DOL until the present time. In
1986 the DOL sent a letter to the Alaska Air Carrier's
Association stating that pilots were exempt from overtime.
Based on the federal exemption and the state's policy, most
Alaska air carriers never paid overtime to their pilots; instead
they have used various methods including payment by the flight
hour, fixed monthly salary, payment by flight day, or a
combination of these methods. Despite the DOL's policy and lack
of litigation, in the late 1990's some plaintiffs' attorneys
argued that there was, in fact, no exemption under state
overtime law and lawsuits began to be filed.
3:02:30 PM
MR. DANIEL asserted that Hageland Aviation and a vast majority
of pilots themselves do not support the lawsuit and, in fact,
the pilot that initiated the lawsuit stated in his deposition
that he felt that he was fairly paid. His beef against Hageland
was that he had been unfairly fired because of his age, a claim
investigated and rejected by the Alaska Human Rights Commission.
Only two of the approximately 60 pilots currently working for
Hageland have chosen to participate in the lawsuit and out of
the 82 total class action members who could assert claims, 56 of
them, or 68 percent, have affirmatively opted out of the
lawsuit.
3:06:49 PM
MR. DANIEL said that Hageland pilots are some of the best paid
pilots in the airline industry in Alaska and that there has been
no evidence that it failed to pay its pilots, failed to pay them
on time or that they engaged in any fraud, deception, bad faith
or any intentional evasion of the Alaska Wage and Hour Act. The
lawsuit is proceeding only because the plaintiffs' lawyers have
seized upon the lack of any expressed exemption in the law
before 2003 and because of two technical mistakes made by
Hageland in the way that pilots were compensated. The purpose
of the retroactive provision in the bill is to ensure that such
lawsuits are stopped and that no more are brought.
3:08:57 PM
MR. DANIEL said that the violations of law cited by the judge
presiding over the class action are trivial and demonstrate the
need for legislation such as SB 105. He said that the end
result of the lawsuit against Hageland would be that a good
corporate citizen that has paid its pilots fairly and provided
an essential service in Bush Alaska would face bankruptcy
because of a technical violation of a law that was never
intended to apply to its pilots.
CHAIR BUNDE noted, for the record, that there is potential
conflict regarding his aviation experience and his review of the
bill despite the fact that he has not worked in the aviation
industry for several years and thus could not be affected by the
lawsuit.
3:14:11 PM
MIKE HAGELAND, President, Hageland Aviation, stated that his
company has always paid its pilots well and noted that all but
one of his current pilots has either opted out of the class
action lawsuit or indicated that he wanted nothing to do with
suing the company. Pilots involved in the class action were
enticed by lawyers, one of which he heard told a pilot he could
gain as much as $80,000 in a settlement. Mr. Hageland supported
SB 105.
3:16:11 PM
MIKE BERGT, General Manager, Alaska Central Express (ACE), gave
a brief description of his company and its importance to rural
communities in Alaska. He described a current lawsuit against
his company that was brought about by a former pilot to collect
overtime compensation. He said that his company believed itself
to be acting in accordance with Alaska law and with a common and
accepted practice in Alaska while it paid its pilots on a flight
time basis. He noted that ACE had always paid its pilots in this
way, that its pay scale was competitive with other carriers in
the state and that it never once tried to take advantage of its
pilots or employees.
MR. BERGT stated that he never knew of any grievances made by
his pilots regarding payment. He supported SB 105 and asserted
that the lawsuit brought against ACE was the result of the
lawsuit brought against Hageland Aviation. Such lawsuits pose
serious financial implications for both his own and other
financial carriers.
3:19:48 PM
BRUCE MCGLASSON, president and owner of Grant Aviation, briefly
described his air service and said that his company also pays a
daily rate to its pilots and had converted to a daily salary for
the same reason as that mentioned by Hageland representatives.
Paying by a daily rate encourages safety since pilots are paid
whether they fly or not so long as they are on schedule on a
given day. Paying on hourly rate gives pilots an incentive to
fly when they should not fly, such as in bad weather and
believed that the success of the aforementioned lawsuit would
unjustly bankrupt Hageland Aviation and that a similar suit
could bankrupt his own company.
CHAIR BUNDE asked if single engine pilots were still limited to
an eight-hour day by the FAA.
MR. MCGLASSON responded that pilots are required to have an
uninterrupted rest period every 24 hours and may fly only eight
hours within a 14-hour duty day.
3:23:19 PM
JASON WILSON, pilot, Hageland Aviation, stated that pilots of
Hageland feel they are compensated fairly and that Hageland's
payment practices encourage safety by not providing an incentive
for pilots to fly in unsafe conditions. Mr. Wilson supported SB
105.
CHAIR BUNDE asked him what the amount of the hourly pay rate at
Hageland is.
MR. WILSON responded that the average 207 pilot makes about $90
per flight hour and that the company has pilots making as much
as $150 per flight hour. Last year there were very few days
when Hageland pilots exceeded 10 hours of actual flight time and
that he and many other pilots believe that there is really no
need to be paid overtime when their flight hours are limited.
BRETT HARRIS, pilot, Hageland Aviation, stated that he has
worked for Hageland for six years and has experienced the
different pay arrangements over the years. He said that the
daily pay rate is fair and encourages safety. Six hours of
flight time would be considered a busy day and four to five
hours of flight time would be considered a typical day.
Hageland pilots only work for two weeks out of the month and six
months out of the year and are paid very good wages. Given these
conditions, it is unreasonable for someone to complain about
unfair compensation.
JIM WILSON, President, Coastal Helicopters, asserted that if
such a lawsuit were brought against his company, it could cause
the layoff of many of his employees and perhaps even its
closing.
3:28:31 PM
TOM NICOLOS, Cape Smythe Air Service, stated that his company
was sued after SB 54 passed. Cape Smythe has paid its pilots
fairly. Cape Smythe pays pilots by the block hour with a small
monthly guarantee so that they would have an even salary
throughout the year. Cape Smythe even pays its pilots time and
a quarter for every additional hour flown over a certain amount.
He supported SB 105.
3:29:52 PM
GRANT THOMPSON, President, Cape Smythe Air Service, noted that
Cape Smythe had been paying its pilots just as Mr. Nicolos had
described for the past 25 years and he said that the current
lawsuit could bankrupt his company. He supported SB 105
KAREN CASANOVAS, Executive Director, Alaska Air Carriers
Association (AACA), supported SB 105. She said the AACA fully
supports the positions of Hageland Aviation, ACE, Grant
Aviation, Coastal Helicopters, and Cape Smyth. She read the
following statement:
Without the passage of the current legislation,
economic burdens of several tiers will be imposed on
carriers that perform passenger and cargo handling
which are so critical to the transportation needs of
Alaskan's around the state. Federal aviation
regulations that regulate our carriers require them to
take serious responsibility for the work they perform
for the general public. Those carriers, as well as
our industry support safety, managing companies in an
ethical manner and addressing the needs of their
employees. The lawsuits filed against our member
airlines fail to reach this threshold. A ruling not
in favor of the carriers that have lawsuits filed
against them would impose significant new costs on
companies outside the purview of the original position
of the Department of Labor submitted in 1986. These
carriers that are certificated as airlines ensure a
high level of safety and fairness to their employees
and have operated under full compliance with that 1986
position given to our member carriers.
The economic burdens may discourage many passenger or
cargo airlines from continuing to offer services to
Alaskans in rural communities who depend on them
throughout the state. In addition it could
dramatically impact the contractual relationships and
expectations between government agencies such as the
US Postal Service and other service providers that
these cargo services and passenger airlines perform.
For these reasons the AACA requests that the Senate
Labor and Commerce Committee support our position.
3:33:11 PM
BOB HAJDUKOVICH, Frontier Aviation, supported SB 105. He said
that Alaska pilots are compensated well compared to pilots
elsewhere in the country and consequently issues arising from
the related lawsuits are surprising to him. He said that
current pay policies encourage safety and fairness.
MICHAEL CHARLIE, pilot, Hageland Aviation, said that he has been
employed by Hageland for six years and that he had been paid
fairly. He said that under the existing pay structure he never
felt pressured to fly in bad weather to make a quick buck and
that he found being paid top dollar to fly six months out of the
year is totally unbeatable. He claimed that companies like
Hageland are needed because they are operated for people whether
to fly them home or to keep them employed on the ground or in
the air. He said that Hageland Aviaiton supports local hiring
and sets out to do more than they have to do. He supported SB
105
CHAIR BUNDE Said that he would hold the bill for further work
and adjourned meeting at 3:39:33 PM
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