Legislature(2023 - 2024)BARNES 124
01/19/2024 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB119 | |
| HB186 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 119 | TELECONFERENCED | |
| += | HB 186 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 186-VOLUNTEER LABOR COMPLIANCE OFFICER PRGM
3:54:37 PM
CHAIR SUMNER announced that the final order of business would be
HOUSE BILL NO. 186, "An Act relating to volunteer labor
compliance officers; and providing for an effective date."
CHAIR SUMNER explained that he is a homebuilder, and during his
time in the industry he has seen many unfortunate incidents that
could potentially be addressed by this type of legislation. In
the private construction industry cash pay and misclassification
of employees as independent contractors is pretty rampant, and
this is something that the legislature should take a look at.
3:55:38 PM
SARENA HACKENMILLER, Staff, Representative Jesse Sumner, Alaska
State Legislature, introduced HB 186 on behalf of Representative
Sumner, prime sponsor. The bill would establish a volunteer
labor compliance officer program which would help address some
of the difficulties Alaska construction workers face because of
wage theft. She stated that the construction industry is a
vital part of Alaska's economy. While many employers uphold
fair labor practices, there are those who engage in exploitative
behaviors that undermine workers' rights and jeopardize their
well-being. She recounted a number of ways contractors exploit
their workers, avoiding just treatment and affecting worker's
compensation. To address this state and national issue, HB 186
proposes the establishment of a volunteer labor compliance
officer program. The program would enhance worker protection,
promote compliance of Alaska's labor laws, and foster a fair and
competitive industry environment. The program will empower more
workers with knowledge of their wage-related rights. Trained
volunteers will visit worksites and conduct interviews, noting
potential violations and encouraging proactive adherence to
labor standards.
3:59:31 PM
MS. HACKENMILLER presented the sectional analysis for HB 186
[included in the committee packet], which read as follows
[original punctuation provided]:
HB 186 Volunteer Labor Compliance Officer Program
Sectional Analysis
Section 1: Adds new Article to AS 23.05 directing the
Department of Labor and Workforce Development to
create a Volunteer Labor Compliance Officer Program
for said volunteers to inspect construction sites in
order to document compliance with state labor laws.
The Department of Labor and Workplace Development
through the Volunteer Labor Compliance Officer Program
will ensure the state has a roster of qualified
individuals to inspect constructions sites by
providing the proper training, safety equipment,
granting them the authority to enter a worksite and
inspect records outlined in AS 23.05.100. The
Department will also outline regulations for
volunteers such as ID badges, required safety
equipment, as well as specifying the insurance
coverage needed by volunteers.
Article 6 adds new statues to AS 23.05 outlining
powers and duties of the volunteer labor compliance
officer. These powers and duties include the ability
to access and inspect a construction site on behalf of
the department and initiate labor compliance
investigation, require volunteers to visibly display
the Dept. issued ID card and wear the required safety
equipment on site, email a report of the Department
visit within 48 hours, document that the officer is
covered by workers compensation, and maintain required
confidentiality. A volunteer labor compliance is not
allowed to be a state employee, issue citations or
enforce state labor laws. While conducting the
investigation the volunteer is not allowed to wear
attire of any other organization other than the
department, disparage the employer, organize, or
promote or display insignia for any other entity or
organization, or preform any type of work outside the
scope of the volunteer labor compliance officer while
acting the capacity of a volunteer labor compliance
officer. Article 6 also adds statues to AS 23.05
outlining to the department the requirements a
potential candidate must fill to be a volunteer labor
compliance officer, and the ability to permanently
revoke a volunteer's badge in certain instances.
Section 2: Provides an immediate effective date.
4:02:02 PM
REPRESENTATIVE PRAX asked how objectivity and equal treatment
could be ensured under the law.
MS. HACKENMILLER responded that HB 186 includes a conflict-of-
interest provision; however, the regulations will be determined
by the Department of Labor and Workforce Development (DLWD),
which will find a fair and equitable way to ensure the conflicts
of interests are acceptable by the industry.
REPRESENTATIVE PRAX requested clarification that the issue would
be addressed by regulations.
4:03:05 PM
CHAIR SUMNER explained that the legislature shouldn't administer
in fine detail, but HB 186 directs DLWD to create regulations to
that effect.
4:03:36 PM
REPRESENTATIVE SADDLER noted that HB 186 seems to envision
deputizing private citizens to enforce state regulations and
laws. He asked whether there are other instances in state
government where the inspection and applications of regulations
and laws are outsourced to private individuals.
CHAIR SUMNER gave the example of a tip line for poor drivers and
suggested that there are other examples where members of the
community would like to help enforce laws especially considering
there are not adequate employees or money to cover all areas of
the state. He said there are a significant number of rural
projects, so it is envisioned that this would allow community
members to help with the enforcement of the laws.
REPRESENTATIVE SADDLER asked whether the notations of violations
would be anonymous.
CHAIR SUMNER responded that would be a good question for DLWD as
to whether it takes anonymous tips. He said he would provide
Representative Saddler's office with a copy of the wage and hour
report form.
4:05:44 PM
REPRESENTATIVE CARRICK questioned whether there was anything in
HB 186 to prevent a volunteer compliance officer from being
paid, for example: a competing construction company wants to
send its employee to do compliance work with private
contractors. She asked if the company would be allowed to do
that.
CHAIR SUMNER posited that the DLWD would have sideboards in the
regulations so that one company could not send its employees to
a competitor in an abusive manner.
REPRESENTATIVE CARRICK asked what compels the Department of
Labor and Workforce Development to set up provisions around the
program creation. She commented that there were some gray areas
in the language.
4:07:46 PM
REPRESENTATIVE RUFFRIDGE explained that he wanted to better
understand the qualifications in Section 1 for the compliance
officer. In the initial introduction to the bill there was a
lot to do with wage theft, but the qualifications in the bill
seem more focused on construction experience and safety
orientation. He questioned whether the volunteer compliance
officers would be doing an accounting of the books or looking at
employee paychecks.
4:08:41 PM
MS. HACKENMILLER said she could not answer the question at that
time but will provide the information to Representative
Ruffridge's office.
4:09:12 PM
CHAIR SUMNER asked invited testifiers to speak.
4:09:49 PM
CHRIS DIAMOND, Representative, Western States Regional Council
of Carpenters, began his testimony by defining worker
misclassification, human trafficking of laborers, and
construction industry tax fraud. He explained that these
problems affect the Alaska construction industry.
4:11:35 PM
GABE SHADDY FARNSWORTH, Representative, Western States Regional
Council of Carpenters, spoke about his background in the
construction industry and his personal experiences of wage
theft. He cited the Century Foundation which found that 14.6
percent of Alaska construction workers were victims of wage
theft or misclassification, which resulted in an estimated $4.7
million dollars in unpaid overtime wages, as well as $23 million
in lost tax revenue in 2021. He said this is a major issue in
Alaska, and there are not enough resources to enforce existing
wage and hours laws in the industry. He stated that HB 186 is a
creative and cost-effective approach to maximize state
resources, namely, wage and hour investigators, through
leveraging voluntary wage and compliance officers.
4:14:18 PM
MR. DIAMOND added that there is an economic boom coming to the
construction industry in Alaska with the federal Infrastructure
Investment and Jobs Act, which is going to be put towards public
projects all over Alaska. He explained that the state currently
does not have resources to ensure fair treatment of workers;
currently Alaska does not have enough contractors or workforce,
and outside contractors will come up and potentially use
unscrupulous practices.
MR. FARNSWORTH said that, in terms of the conflict-of-interest
question, HB 186 addresses that issue. He acknowledged that the
bill was somewhat sparce in how the department would implement
the program. He noted that the bill does contain a provision
that the gives the department the ability to terminate the
volunteer's badge.
MR. DIAMOND commented that the idea is to follow current
department rules and regulations on how information can be
gathered and how to submit the information to the department.
MR. FARNSWORTH pointed out that the fiscal note includes a
coordinator between the department and the volunteers, with the
department providing oversight.
4:18:48 PM
REPRESENTATIVE SADDLER questioned whether the organizations,
like the brotherhoods or unions, carry out any of the services
that might be performed by the proposed voluntary compliance
officers.
MR. DIAMOND answered that, as a member of the carpenters union,
he has visited union and non-union job sites where workers have
reported various issues with wage theft. He said that he cannot
file a claim on the worker's behalf, but the worker has to file
the claim. He offered scenarios of the challenges workers face
in this regard, like not working on the next project if they
report problems.
REPRESENTATIVE SADDLER asked for clarification regarding whether
he or other union representatives could file claims, and if so,
how it would work.
MR. DIAMOND explained that, as a union representative, he was
not able to perform that function, and if a member doesn't want
to answer questions, they don't have to. He said that if a
contractor asks him to leave, he will leave. He pointed out
that this differs from wage and hour investigators whose
questions need to be answered because they are protecting public
money.
4:20:50 PM
REPRESENTATIVE PRAX observed that the focus of the testimony was
on public projects. He shared his experience in working for a
private company, and there was always a union contractor, and
for state projects there would be a project manager. He
commented on the difficulty in removing the conflict of
interest. He asked whether a project manager could be required
for each construction project whose duties would include wage
and hour monitoring.
MR. FARNSWORTH said he had no problem with having one of a
construction company's staff whose job would include checking
the work that is performed and ensuring enforcement.
REPRESENTATIVE PRAX clarified that the hypothetical staff member
would be part of the state's condition of the contract, and that
the state be allowed to check whether the company is following
wage laws.
MR. FARNSWORTH responded that the contractor is required to
submit a certified payroll to the Wage and Hour Office.
Typically, a wage and hour technician examines the reports and
looks for discrepancies. Some of the work requires "boots on
the ground" to witness certain types of violations. If there
was a requirement in the statute for public projects to have a
wage and hour enforcer, that would be a great idea; it would
not, however, cover private construction.
4:26:14 PM
MR. DIAMOND commented that, in such a case, it should be a state
employee rather than someone affiliated with the contractor or
company.
MR. FARNSWORTH followed up that it is a good idea but would be
very expensive.
4:26:57 PM
REPRESENTATIVE WRIGHT shared his experience working with Davis
Bacon wages and expressed his approval of HB 186. He agreed
that having a wage and hour investigator on site all the time
would be very expensive. He recalled employer training,
documentation that the employees understand their rights, and
random compliance visits.
4:28:22 PM
REPRESENTATIVE RUFFRIDGE referred to language on page 2, line 9,
of HB 186, which addresses the powers and duties of a volunteer
compliance officer. He then drew attention to page 3, line 14,
describing the compliance officer's qualifications. He said he
was not sure that five years of construction experience and the
completion of a 10-hour Occupational Safety and Health
Administration (OSHA) workshop would qualify someone to perform
a relatively detailed check.
MR. DIAMOND explained that there would be DLWD training to
ensure officers would be following department guidelines.
4:30:20 PM
MR. FARNSWORTH pointed out a section in the bill that addressed
training by the department. He said that the five-year
requirement is needed for them to identify the work that workers
are doing.
4:31:31 PM
REPRESENTATIVE SADDLER asked Mr. Diamond and Mr. Farnsworth how
their organizations view the status of Alaska's enforcement and
compliance of labor laws.
MR. DIAMOND responded that his organization continually asks for
more oversight and enforcement. He said the state of Alaska
currently does not have the capacity to check all the job sites
for compliance.
REPRESENTATIVE SADDLER observed that a person who qualifies as a
volunteer compliance officer would be more likely to take a job
with wages and benefits.
4:33:05 PM
MR. FARNSWORTH explained that there would be some retired
construction workers as well as other interested individuals but
conceded that it is a point well taken.
4:34:34 PM
CHAIR SUMNER announced that HB 186 was held over.