04/16/2025 03:15 PM House LABOR & COMMERCE

                HB 161-PAID SICK LEAVE EXEMPTION                                                                            
                                                                                                                                
5:35:13 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS announced  that the next order  of business would                                                               
be HOUSE  BILL NO.  161, "An  Act relating  to minimum  paid sick                                                               
leave requirements; and providing for an effective date."                                                                       
                                                                                                                                
5:35:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JUSTIN RUFFRIDGE,  Alaska  State Legislature,  as                                                               
prime  sponsor, presented  HB  161.   He  stated  that, upon  the                                                               
passage  of Ballot  Measure  1, there  were  concerns across  the                                                               
small  business community  in Alaska  about the  effect on  small                                                               
businesses.  He asserted that  the proposed legislation would not                                                               
change  key  provisions of  or  repeal  Ballot Measure  1,  "most                                                               
notably  the  increase to  minimum  wage,"  which he  stated  was                                                               
broadly supported across Alaska.   He explained that HB 161 would                                                               
alter  some   sections  regarding  change  to   paid  sick  leave                                                               
requirements  for businesses.    He stated  that the  adjustments                                                               
made  by HB  161  would alleviate  some of  the  burden on  small                                                               
businesses under Ballot Measure 1.                                                                                              
                                                                                                                                
5:37:34 PM                                                                                                                    
                                                                                                                                
BUD SEXTON, Staff, Representative  Justin Ruffridge, Alaska State                                                               
Legislature,  presented  HB  161   on  behalf  of  Representative                                                               
Ruffridge,  joint sponsor  of HB  161.   He began  on the  second                                                               
slide  of the  PowerPoint [included  in the  committee file]  and                                                               
drew committee  members' attention  to a graph  representative of                                                               
comparisons between Ballot  Measure 1 and HB 161  with regards to                                                               
the  number  of  employees,  leave   cash  out  option,  employer                                                               
notification, and  seasonal workers.   The  second slide  read as                                                               
follows [original punctuation provided]:                                                                                        
                                                                                                                                
     # of employees                                                                                                           
       [Ballot Measure 1] Leave accrual applies to small                                                                        
     businesses with                                                                                                            
     15 or more employees, not more than 56 hours                                                                               
     a year                                                                                                                     
                                                                                                                                
     [HB 161] Leave accrual applies to businesses                                                                               
     with 50 or more employees                                                                                                  
                                                                                                                                
     # of employees                                                                                                           
       [Ballot Measure 1] Leave accrual applies to small                                                                        
     businesses with                                                                                                            
     fewer than 15 employees, not more than 40                                                                                  
     hours a year.                                                                                                              
                                                                                                                                
     [HB 161] Applies to businesses with 50 or                                                                                  
     more employees                                                                                                             
                                                                                                                                
     Leave cash out                                                                                                           
     [Ballot Measure 1] No language                                                                                             
                                                                                                                                
     [HB 161] An employer may, at the                                                                                           
     employee's request, allow an                                                                                               
     employee to exchange accrued sick                                                                                          
     leave for the cash value of the                                                                                            
     accrued sick leave.                                                                                                        
                                                                                                                                
     Notify employer                                                                                                          
        [Ballot Measure 1] No requirement for good faith                                                                        
     effort by                                                                                                                  
     employee to notify the employer before the                                                                                 
     workday begins                                                                                                             
                                                                                                                                
     [HB 161] Requires the employee to make a                                                                                   
     good faith effort to provide notice                                                                                        
     to the employer in advance of the                                                                                          
     use of paid sick leave and before                                                                                          
     the start of the workday.                                                                                                  
                                                                                                                                
     Seasonal workers                                                                                                         
     [Ballot Measure 1] No language                                                                                             
                                                                                                                                
     [HB 161] Exempt seasonal workers from sick                                                                                 
     leave accrual.                                                                                                             
                                                                                                                                
MR. SEXTON moved to the third  slide of the presentation and drew                                                               
committee members'  attention to the image  which listed entities                                                               
in support  of HB 161.   He concluded by reading  the third slide                                                               
as follows [original punctuation provided]:                                                                                     
                                                                                                                                
     Enables Alaskan businesses to thrive                                                                                       
                                                                                                                                
     Taking care of our local businesses                                                                                        
     means taking care of our workforce                                                                                         
                                                                                                                                
     Allows employees to cash out their                                                                                         
     accrued sick leave                                                                                                         
                                                                                                                                
5:39:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CARRICK asked how HB  161 compared to the law pre-                                                               
Ballot Measure 1.                                                                                                               
                                                                                                                                
REPRESENTATIVE RUFFRIDGE  responded that prior to  Ballot Measure                                                               
1,  there were  no requirements  regarding paid  sick leave.   He                                                               
further   noted  that   everything  in   Ballot  Measure   1  was                                                               
"essentially new."   He explained that HB  161 was constitutional                                                               
in allowing  the amending  of Ballot  Measure 1,  as it  would be                                                               
unconstitutional  to  repeal  it  or  return  to  law  pre-Ballot                                                               
Measure 1.                                                                                                                      
                                                                                                                                
5:41:19 PM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease at 5:41 p.m.                                                                                 
                                                                                                                                
5:42:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  COULOMBE stated  that most  of the  businesses in                                                               
her district,  while aware  of the  minimum wage  provision, were                                                               
not  aware of  the provisions  for paid  sick leave  under Ballot                                                               
Measure 1.   She stressed  that, without the amendments  under HB
 to Ballot  Measure 1, small businesses  would close, increase                                                               
prices, or lose  workers.  She noted that  she and Representative                                                               
Ruffridge worked with Legislative Legal  to ensure that they were                                                               
within legal parameters and not  undermining the intent of Ballot                                                               
Measure 1.   She opined that  HB 161 would help  small businesses                                                               
transition  into  the  paid sick  leave  requirements  of  Ballot                                                               
Measure 1.                                                                                                                      
                                                                                                                                
5:44:07 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS  facilitated a brief discussion  of the remaining                                                               
agenda items.                                                                                                                   
                                                                                                                                
5:45:18 PM                                                                                                                    
                                                                                                                                
KATI CAPOZZI, President & CEO,  Alaska Chamber, began her invited                                                               
testimony  by  introducing the  Alaska  Chamber,  noting that  it                                                               
represents  businesses of  "all sizes  and industries  across the                                                               
state."  She emphasized that  the legislature has broad powers to                                                               
amend initiatives  and encouraged  committee members to  "fix the                                                               
most  harmful records"  of Ballot  Measure  1.   She stated  that                                                               
small businesses  owners, particularly  those in  hospitality and                                                               
tourism, have experienced  a lot of hardship,  including a global                                                               
pandemic,  workforce shortages,  inflation, and  newly introduced                                                               
tariffs.   She stated  that Ballot Measure  1 introduced  a "one-                                                               
size-fits-all" mandate across Alaska.   She stated that since its                                                               
passage, many voters did not  understand the true implications of                                                               
the ballot measure.   She cited the Alaska  Chamber's most recent                                                               
public  opinion  survey,  reporting  that 40  percent  of  Alaska                                                               
residents  did  not  know  that  mandated  paid  sick  leave  was                                                               
included in the ballot measure.   Additionally, she reported that                                                               
58  percent of  respondents affirmed  that they  would support  a                                                               
paid  sick  leave exemption  for  employers  with fewer  than  50                                                               
employees.   She  asserted  that exemptions  to  paid sick  leave                                                               
[under  HB  161] were  necessary  because  Ballot Measure  1  had                                                               
duplicative  compliance  measures   for  employers  that  already                                                               
provided comprehensive  paid sick leave  and paid time off.   She                                                               
asserted  that Ballot  Measure 1  would  cause recordkeeping  and                                                               
administrative   complications   for  small-   and   medium-sized                                                               
employers  and   additionally  asserted   that  it   would  cause                                                               
operational  disruptions  due  to inflexible  accrual  and  usage                                                               
standards, particularly  with regard to seasonal  and hospitality                                                               
businesses.                                                                                                                     
                                                                                                                                
MS.  CAPOZZI  stated that  the  Alaska  Chamber supports  HB  161                                                               
because   it    would   introduce   "critical    guardrails   and                                                               
clarifications  that would  allow businesses  to comply  with the                                                               
spirit  of paid  sick leave  while reducing  regulatory overreach                                                               
and  economic  harm."    She  stated that  HB  161  would  reduce                                                               
compliance  burdens,  clarify   sick  leave  definitions,  exempt                                                               
seasonal employers whose  operations peak at six  months or less,                                                               
and  provide  flexibility  by permitting  employees  to  cash-out                                                               
unused  sick  leave.    She  said that  HB  161  would  encourage                                                               
voluntary compliance  over mandates.   She  asserted that  HB 161                                                               
encourages  job protection  and  growth and  protects remote  and                                                               
rural businesses in Alaska.   She thanked the committee for their                                                               
consideration and stated that she was available for questions.                                                                  
                                                                                                                                
5:50:26 PM                                                                                                                    
                                                                                                                                
JOHN WEDDLETON,  Business Owner,  began his invited  testimony by                                                               
stating that his business was  celebrating 41 years.  He reported                                                               
that his  business had  provided paid  time off  for the  past 20                                                               
years.  He  noted that in his  first 10 to 20  years of business,                                                               
Ballot Measure  1 would have  proved difficult for  his business.                                                               
He  opined that  the  cap  at 50  employees  [under  HB 161]  was                                                               
important,  noting  that  it's likely  that  most  businesses  in                                                               
Alaska have  less than 50  employees.   He suggested that  HB 161                                                               
would set a  standard that all businesses provide  paid time off.                                                               
He offered  appreciation for the  option under HB 161  that would                                                               
allow  employees to  cash  out paid  time off.    He offered  his                                                               
support for  HB 161 and  encouraged committee members  to support                                                               
the proposed legislation.                                                                                                       
                                                                                                                                
5:52:50 PM                                                                                                                    
                                                                                                                                
MS. CAPOZZI, in response to a  question from Co-Chair Hall on the                                                               
history of  the Alaska  Chamber's position  on Ballot  Measure 1,                                                               
responded  that  her  organization  had  been  leading  in  their                                                               
efforts to oppose Ballot Measure 1 for over a year.                                                                             
                                                                                                                                
5:54:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  COULOMBE commented  that the  Alaska Chamber  had                                                               
been  in opposition  for  a  long time,  but  that the  Anchorage                                                               
Chamber did not declare an official position.                                                                                   
                                                                                                                                
5:54:44 PM                                                                                                                    
                                                                                                                                
REGINA DAVIS, Vice  President, Davis Block &  Concrete, began her                                                               
invited  testimony  by stating  that  her  business has  supplied                                                               
concrete for construction projects  throughout the state for over                                                               
50  years, employing  locals.   She asserted  that HB  161 was  a                                                               
practical  solution that  balanced "worker  protections with  the                                                               
realities  of  running  a  small   business  in  Alaska's  unique                                                               
economy."   She said that  HB 161 would protect  small businesses                                                               
by  mitigating  the  burdensome   paid  sick  leave  requirements                                                               
imposed  by Ballot  Measure  1.   She said  that  the mandate  to                                                               
provide paid  sick leave to  every employee,  including temporary                                                               
staff, would strain their  finances and administrative resources.                                                               
She stated  that HB 161  would raise the threshold  to businesses                                                               
with 50 or more employees.   She further stated that HB 161 would                                                               
support  Alaska's  seasonal  economy, noting  that  her  business                                                               
projects increase  in the  summer and  rely on  seasonal workers.                                                               
She asserted that requiring paid  sick leave for seasonal workers                                                               
creates  administrative challenges  and costs  that do  not align                                                               
with  the temporary  nature of  seasonal workers.   She  asserted                                                               
that  the  exemption for  seasonal  workers  under HB  161  would                                                               
ensure that  her business could  continue to hire  locally during                                                               
the summer months.  Additionally,  she asserted that her business                                                               
would need to  raise prices or cut jobs to  meet the requirements                                                               
of Ballot Measure 1.   She echoed other speakers in acknowledging                                                               
the many obstacles  small businesses have faced  in recent years.                                                               
She concluded by urging committee  members' support of HB 161 and                                                               
said that she was available for questions.                                                                                      
                                                                                                                                
[HB 161 was held over.]