HB 29-ALASKA MINIMUM WAGE 3:20:34 PM CHAIR OLSON announced that the first order of business would be HOUSE BILL NO. 29, "An Act increasing the minimum wage; and providing for an effective date." CHAIR OLSON announced that public testimony was previously closed for HB 29. 3:20:49 PM JENNIFER SENETTE, Staff, Representative Kurt Olson, Alaska State Legislature offered to answer any questions that committee members may have. 3:21:00 PM REPRESENTATIVE HOLMES recalled the federal and state minimum wages. She inquired as to whether both minimum wages would apply to all employers in Alaska. She also asked if employers are required to pay the higher of the two rates or if certain employers within the state were exempted. MS. SENETTE responded that higher of the two minimum wages would apply. She pointed out that some states have a higher minimum wage than the federal level. In those instances, if an employee is covered by both, the person is entitled to the higher of the two minimum wages. She stated that even without passage of HB 29, in July the employee would be entitled to the federal minimum wage. The federal minimum wage law, the Fair Labor Standards Act (FLSA), applies to employees of enterprises that have an annual gross volume and sales of higher over $500,000 and to smaller firms involved in interstate commerce. However, there are exceptions to the federal minimum wage law, such as broad exceptions for farmers or fishermen, which are similar to Alaska's exceptions, but include narrow exceptions for people who work at home such as wreath makers. She related that the Department of Labor & Workforce Development (DLWD) indicated some confusion currently exists with the U.S. Department of Labor (USDOL) since the department is in flux. Thus, it is difficult to tell which exemptions at the federal level and state level will apply. She further related she will monitor the federal policies that apply. 3:24:03 PM REPRESENTATIVE HOLMES said, "It's pretty safe to say that would be a pretty small universe and the vast majority of people working in the state would be covered under, would basically ... be whichever one is higher." MS. SENETTE agreed. She explained that the federal exemptions were not reflected in Alaska's minimum wage would probably affect smaller numbers. She recalled the wreath makers who have an exemption. 3:24:53 PM The committee took an at-ease from 3:24 p.m. to 3:26 p.m. 3:26:30 PM REPRESENTATIVE HOLMES made a motion to adopt Amendment 1, labeled 26-LS0177\A.3, Wayne, 2/27/09, which read: Page 1, line 14: Delete "July 1, 2009" Insert "January 1, 2010" CHAIR OLSON objected for purposes of discussion. 3:26:52 PM MS. SENETTE related that throughout this process the bill's sponsor has heard from people throughout the state. This amendment addresses the concerns expressed by businesses. She stated that Amendment 1 will help businesses by allowing them adequate time to budget for the increase to the minimum wage, and by delaying the date to January 1, 2010, will also prevent business owners from having to start the summer season with one wage and then increase employee's wages on July 1, 2009. 3:27:55 PM CHAIR OLSON removed his objection. There being no further objection, Amendment 1 was adopted. 3:28:17 PM REPRESENTATIVE COGHILL stated he did not wish to hold up the bill. He said that he agrees with the phasing in of the bill due to the timing of federal law and the summer industries in Alaska. He opined while he does not agree with minimum wages, if an increase is favored that instead of increasing the minimum wage by $.50 cents, the minimum wage could be increased by $.25, especially given the downturn of the economy. He maintained that he will not try to hold up HB 29. CHAIR OLSON offered that he has not received any calls from anyone who likes HB 29. He indicated that people have thought the proposed increase in the minimum wage was either not enough or too much. He reminded the committee that Alaska has a long history of placing its minimum wage $.50 higher than the federal minimum wage. He offered his belief that he has made concessions with respect to inflation proofing and other provisions previously considered. He opined that he is not happy with the bill either, but the increase in minimum wage is reasonable. 3:30:17 PM REPRESENTATIVE COGHILL moved to report HB 29, Version 26- LS0177\A, as amended out of committee with individual recommendations and the accompanying fiscal note. There being no objection, the CSHB 29(L&C) was reported from the House Labor and Commerce Standing Committee. 3:30:53 PM The committee took an at-ease from 3:30 p.m. to 3:32 p.m.