Legislature(1999 - 2000)
04/22/1999 01:40 PM House FIN
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* first hearing in first committee of referral
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HOUSE BILL NO. 201
"An Act relating to the computation of overtime; and
providing for an effective date."
REPRESENTATIVE NORMAN ROKEBERG, SPONSOR testified in support
of HB 201. He explained that the legislation is the result
of a court decision by Superior Court Judge Larry R. Weeks,
for Stuart Hallam vs. Holland America Line, Inc (a copy of
the opinion is on file.) Judge Weeks found that the
interpretation of AS 23.10.060(b), a statute relating to
overtime, was unclear. He maintained that under the court's
interpretation employees would be paid twice for the same
overtime hours (see excerpt from sponsor statement below).
The legislation is supported by the Administration.
Members were provided with a proposed committee substitute,
Representative Austerman MOVED to ADOPT proposed committee
substitute, #1-LS0872\H, 4/22/99. There being NO OBJECTION,
it was so ordered.
Representative Rokeberg compared the committee substitute to
CSHB 201 (L&C). He observed that the following language was
deleted: "overtime compensation under this paragraph shall
be paid only for those hours for which overtime compensation
has not been paid under (1) of this subsection" and replaced
with "the number of hours worked in a week under this
paragraph shall be determined without including hours that
are worked in excess of eight hours in a day."
Representative Austerman spoke in support of the
legislation. He asked for information regarding the
retroactive effective date.
Representative Williams asked how the legislation would
affect negotiated contracts. Representative Rokeberg stated
that the overtime law would take precedence.
TERRY CRAMER, LEGAL COUNSEL, LEGISLATIVE AFFAIRS AGENCY did
not think that the legislation would affect the negotiated
contracts. She observed that there is exclusion in the
overtime law for flextime arrangements. The legislation
would not change the terms of existing contracts.
Ms. Cramer clarified that the retroactive effective date in
section 3 was based on the date that the Wage and Hour Act
came into effect. She observed that if the finding is upheld
and it is determined that this is the way the law should
have been interpreted then the retrospective clause would
survive. The retroactive clause will not have an effect if
the finding is not upheld.
Representative J. Davies asked why a retroactive clause was
included. Co-Chair Therriault explained that the retroactive
clause would attempt to prevent retroactive suits for
compensation and uphold the status quo before the judge's
ruling.
In response to a question by Representative J. Davies, Ms.
Cramer pointed out that there is a two-year statute of
limitation.
DWIGHT PERKINS, DEPUTY COMMISSIONER, DEPARTMENT OF LABOR
provided additional information on HB 201. He noted that the
legislation represents the minimum overtime requirements
contained in any of the negotiated contracts. He reiterated
that there is a two-year statute of limitation on back
wages. The department feels that the retroactive clause
would provide clarification. The Department of Labor
supports the legislation. The legislation supports the
Department of Labor's interpretation of the overtime law. He
stressed that would the legislation take away the
possibility of pyramiding. Pyramiding was explained in the
sponsor statement.
Assume Employee worked the following schedule for a
total of 43 hours:
Monday 11 hours Thursday 8 hours
Tuesday 8 hours Friday 8 hours
Wednesday 8 hours
As to Monday, everyone agrees that Employee is entitled
to 3 hours of overtime. The issue is as to Friday.
Under the Department's interpretation and the
interpretation of employers, no overtime would be due
as to Friday since Employee worked 43 hours during the
week and has already been paid for 3 hours overtime.
Under the Court's ruling, Employee would receive
overtime for 3 hours on Friday because, in computing
the 40 hours under the statute, one must include the 3
overtime hours worked on Monday. Consequently, Employee
received 6 hours of overtime pay for the week even
though he/she only worked 43 hours.
Vice-Chair Bunde asked what the overtime would be if someone
worked 10 hours over four days. Co-Chair Therriault
clarified that under the court's interpretation they would
have been paid overtime on each individual day and overtime
on the time above 40 hours in a week. He noted that if a
person worked 10 hours a day for five days that they would
be paid 2 hours of overtime for each day and 10 hours for
the time over 40 hours. They would be paid for a total of 20
hours of overtime.
Representative Foster asked what would prevent any
retroactive suits. Mr. Perkins noted that, without passage
of the legislation, there is nothing to prevent individuals
from filing for overtime occurred in the past two years.
Representative J. Davies noted that"
An employee is entitled to overtime for hours worked in
excess of
(1) eight hours a day; or
(2) 40 hours a week; the number of hours worked
in a week under this paragraph shall be determined
without including hours that are worked in excess of
eight hours in a day.
He questioned how the determination is made. Mr. Perkins
acknowledged that it would not be fair to expect an employee
to work 10 hours on Monday and 6 hours on Tuesday not to be
paid for the overtime they worked on Monday because they
worked under 40 hours in the week. Under the Department of
Labor 's interpretation the employee who worked 10 hours on
Monday and 6 hours on Tuesday would have to be paid overtime
for the 2 hours over 8 that he worked on Monday.
Representative J. Davies gave the example of an employee who
worked over 8 hours a day and over 40 hours in a week. They
worked 10 hours a day for 4 days and two hours on the fifth.
They worked a total of 42 hours in the week. Mr. Perkins
stated that the employee would be entitled to 8 hours of
overtime.
Representative Foster noted that state employees are paid
for 37.5 hours a week. Mr. Perkins observed that employees
work 37.5 under their negotiated contract. Co-Chair
Therriault reiterated that the negotiated contract would
rule.
In response to a question by Representative J. Davies, Ms.
Cramer clarified that the "or" indicates that they would not
need both conditions to receive overtime.
Co-Chair Therriault concluded that the concerns of
Representative J. Davies would be resolved by the inclusion
of "or whichever is greater", but felt that the language
would be unnecessary. He noted that "and" would cause
confusion. Mr. Perkins stated that if there is a concern it
could be addressed during the remaining legislative process.
Co-Chair Therriault asked if the retroactive clause should
be two years. He stressed that it is unnecessary to go back
to 1959. Representative Rokeberg questioned if the two-year
statute of limitation would be sufficient to prevent
legislation. Mr. Cramer stated that if there were a change
in law the retroactive date would not stand. If the Supreme
Court rules that the legislative interpretation is correct
there would not be a need for a retroactive effective date.
PAM LABOLLE, PRESIDENT, STATE CHAMBER OF COMMERCE spoke in
support of the legislation. She noted that Chamber members
are concerned that they not have to pay for overtime hours
twice. They are especially concerned about the retroactive
interpretation by the Court.
Representative Rokeberg stated that he would support a
retroactive date of two years and one day from April 7,
1999, which was the date of the court ruling.
Vice-Chair Bunde stated that he supports the pyramid
interpretation.
Co-Chair Mulder MOVED to ADOPT Amendment 1, a conceptual
amendment to change the effective date to April 1, 1997.
There being NO OBJECTION, it was so ordered.
Co-Chair Therriault noted that there is a zero fiscal note
by the Department of Commerce and Economic Development.
Representative Foster MOVED to report CSHB 201 (FIN) out of
Committee with the accompanying fiscal note. Vice-Chair
Bunde OBJECTED. He spoke in support of the overtime
compensation represented by the court's interpretation.
Representative Moses observed that an employee cannot be
forced to work overtime.
A roll call vote was taken on the motion.
IN FAVOR: Moses, Williams, Austerman, Davis, Foster,
Kohring,
OPPOSED: Bunde, Davies, Grussendorf
The MOTION PASSED (8-3).
CSHB 201 (FIN) was REPORTED out of Committee with a "do
pass" recommendation and with a zero fiscal note by the
Department of Law, dated 4/22/99.
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