03/04/2022 09:00 AM House LABOR & COMMERCE

            HB 372-ELIMINATE MINIMUM WAGE EXEMPTION                                                                         
                                                                                                                                
9:13:16 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  SPOHNHOLZ  announced that  the  next order  of  business                                                              
would be HOUSE BILL  NO. 372, "An Act relating  to exemptions from                                                              
minimum wage."                                                                                                                  
                                                                                                                                
9:13:58 AM                                                                                                                    
                                                                                                                                
MICHAEL  MASON, Staff,  Representative  Chris  Tuck, Alaska  State                                                              
Legislature, introduced  HB 372 on behalf of  Representative Tuck,                                                              
prime sponsor.   He stated  that HB 327  and its Senate  companion                                                              
bill, SB  185, would  clean up  an unneeded  section of  state law                                                              
that has  not been  used since 2018.   He  explained that  in 2018                                                              
the  State  of  Alaska  repealed   the  regulations  that  allowed                                                              
employers to  hire a worker with  a physical or  mental disability                                                              
and  pay them  a  subminimum  wage.   Despite  the  repeal of  the                                                              
regulation, the  section of state  law authorizing the  payment of                                                              
the subminimum  wage remains on the  books, and the bill  seeks to                                                              
change  that.   Currently,  nothing  is in  place  to stop  future                                                              
regulations that  would allow a  subminimum wage for  workers with                                                              
disabilities.   This  bill  would remove  all  reference to  those                                                              
with  earning capacity  that  is impaired  by  physical or  mental                                                              
deficiency or injury,  making it no longer legal in  Alaska to pay                                                              
a disabled person a wage below the minimum wage.                                                                                
                                                                                                                                
MR. MASON pointed  out that, to date, Alaska,  Hawaii, California,                                                              
Colorado,  Oregon, Texas,  Washington,  and  several other  states                                                              
have   eliminated  these   subminimum   wages   for  people   with                                                              
disabilities.     Also,  legislation   is  currently   pending  in                                                              
Georgia,  North Carolina,  Missouri, New  Mexico, New York,  South                                                              
Carolina,  and   Virginia  to  eliminate  or  modify   payment  of                                                              
subminimum wages  to disabled persons.   This bill,  he continued,                                                              
is  important  because paying  a  subminimum  wage to  those  with                                                              
physical  and  mental disabilities  is  a  discriminatory  policy.                                                              
Disabled  persons should  be able  to  earn what  they are  worth,                                                              
with the  minimum wage as the  floor for compensation  rather than                                                              
the ceiling.   Disabled  persons  in Alaska should  never  be paid                                                              
less  than other  workers based  on  their perceived  capabilities                                                              
rather  than  demonstrated  abilities.     Every  day  in  Alaska,                                                              
persons  with disabilities  prove  those assumptions  wrong.   Mr.                                                              
Mason  read a  quote  from Tom  Ridge,  chairman  of the  National                                                              
Organization on Disability:    There is no excuse  for treating an                                                              
entire class  of American  workers differently  from others  based                                                              
solely on the  characteristics of disability, yet  that is exactly                                                              
what current law allows.                                                                                                        
                                                                                                                                
MR. MASON noted  that any proposal to exempt minimum  wage must be                                                              
approved by  the commissioner  of the  Alaska Department  of Labor                                                              
and Workforce  Development.   He  said HB 372  adds an  additional                                                              
minimum wage exemption  to state law for anyone under  18 years of                                                              
age  who  is   temporarily  employed  by  a   qualified  nonprofit                                                              
organization.   He further noted that  HB 372 leaves in  place the                                                              
current  exemptions  for student  learners  and apprentices.    He                                                              
pointed  out that  the Alaska  minimum  wage is  currently set  at                                                              
$10.34 an  hour, and the federal  minimum wage, which has  been in                                                              
place since 2008, is at $7.25 an hour.                                                                                          
                                                                                                                                
9:17:29 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  SPOHNHOLZ asked  why HB  372 allows  for a minimum  wage                                                              
exemption for people  under the age of 18 if they  are employed by                                                              
a nonprofit.                                                                                                                    
                                                                                                                                
MR.  MASON responded  that AS  23.10.070(1)  currently reads,   an                                                              
individual  whose  earning capacity  is  impaired  by physical  or                                                              
mental deficiency,  age, or  injury, at the  wages and  subject to                                                              
the restrictions  and for  the period  of time  that are  fixed by                                                              
the  commissioner.    He  explained  that HB  372  was drafted  to                                                              
remove the  language dealing  with disability,  but it  was wanted                                                              
to leave  in the  exemption  based on  age, so that  is where  the                                                              
language that is  being inserted was put in there.   He noted that                                                              
Senator  Micciche   spearheaded  this  on  the  Senate   side,  so                                                              
[Representative  Tuck]  basically  took  the  Senate  version  and                                                              
introduced it in the House side.                                                                                                
                                                                                                                                
9:18:34 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SNYDER  stated  that  she  had  the  privilege  of                                                              
carrying  this bill  in a  previous  committee, and  that was  the                                                              
very question  she had asked.   The answer received,  she related,                                                              
was that  it would  be appropriate  in certain training  settings.                                                              
She  requested confirmation  that  that  is the  case  or that  it                                                              
could be the case but not in all instances.                                                                                     
                                                                                                                                
MR. MASON replied  that it gives the commissioner  the flexibility                                                              
for those training opportunities for people 18 years or younger.                                                                
                                                                                                                                
REPRESENTATIVE SNYDER  offered her understanding that  it isnt  an                                                              
automatic  ability to  pay under  minimum wage  at nonprofits  for                                                              
those under 18 years  of age; it must be an  exemption approved by                                                              
the commissioner.                                                                                                               
                                                                                                                                
MR. MASON answered  yes, any proposal to exempt  minimum wage must                                                              
be approved  by the  commissioner of the  Department of  Labor and                                                              
Workforce  Development.   He said  it will be  heard in  testimony                                                              
that  the minimum  wage  exemption for  disabled  persons had  not                                                              
been used for several years prior to 2018.                                                                                      
                                                                                                                                
9:19:56 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  SPOHNHOLZ  requested a  description  of  the context  in                                                              
which an  exemption for paying minimum  wage for people  under age                                                              
18  working  for  nonprofits  would be  appropriate  and  how  the                                                              
department  currently   approaches  this   and  would   intend  to                                                              
approach it moving forward.                                                                                                     
                                                                                                                                
9:20:21 AM                                                                                                                    
                                                                                                                                
TANYA KEITH, Program  Manager, Wage and Hour, Labor  Standards and                                                              
Safety  Division, Department  of Labor  and Workforce  Development                                                              
(DLWD),  replied  that  the  regulation  has  been  removed  which                                                              
addressed  how that  specific exemption  would be  approved.   So,                                                              
currently, there  isnt  an exact  process for that, and  one would                                                              
have to be developed.   However, there would  be strict guidelines                                                              
about  it,  and  since the  provision  says  temporarily  employed                                                              
there would be a set period that they would be allowed to work.                                                                 
                                                                                                                                
9:21:05 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   SNYDER   recalled  hearing   conversation   about                                                              
individuals  being  paid  less   than  minimum  wage  at  Juneaus                                                               
Eaglecrest Ski Area,  which she believes operates  as a nonprofit.                                                              
She  inquired as  to  whether this  has  any  relationship to  the                                                              
exemptions  allowed under  current statute  and how  HB 372  might                                                              
change things.                                                                                                                  
                                                                                                                                
MS.  KEITH  confirmed there  is  a  current statute  that  exempts                                                              
individuals aged  18 and older from  the Alaska Wage and  Hour Act                                                              
entirely,   which   would   probably   be   the   exemption   that                                                              
[Eaglecrest] is using now.                                                                                                      
                                                                                                                                
REPRESENTATIVE  SNYDER  requested   clarification  as  to  whether                                                              
there is a different exemption for those 18 and older.                                                                          
                                                                                                                                
MS. KEITH answered yes, AS 23.10.05.                                                                                            
                                                                                                                                
9:22:44 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  FIELDS offered  his understanding  that  the ability  to                                                              
pay subminimum  wage for minors  is an  anachronism and it  is not                                                              
being used right  now.  If it was going to be  used, he continued,                                                              
then  new regulations  would  need to  be  promulgated to  provide                                                              
guidance on how to use it.                                                                                                      
                                                                                                                                
MS.  KEITH  replied  yes,  under that  current  statute  there  is                                                              
nobody  and there  is no  mechanism to  ask for  the exemption  in                                                              
that.                                                                                                                           
                                                                                                                                
CO-CHAIR FIELDS  commented that this exemption could  therefore be                                                              
eliminated,  and it  would have  no impact on  any actual  people.                                                              
It  would just  provide statutory  clarity  around something  that                                                              
already exists,  and he is inclined  to think that this  should be                                                              
done.   It  is  the same  situation  with  HB 372,  he  continued,                                                              
because under  a previous  commissioner the department  eliminated                                                              
the regulations  allowing subminimum  wage payment to  people with                                                              
disabilities  and HB  372  cleans  up the  statute  to align  with                                                              
that.  So, it seems exactly like the same scenario.                                                                             
                                                                                                                                
CO-CHAIR SPOHNHOLZ agreed with Co-Chair Fields.                                                                                 
                                                                                                                                
9:23:59 AM                                                                                                                    
                                                                                                                                
MR.  MASON drew  attention  to the  [3/1/22]  memorandum from  the                                                              
sponsor to  the House Judiciary  Standing Committee  regarding the                                                              
Alaska  Wage and  Hour  Act.   Regarding  Representative  Snyders                                                               
question,  he said  the memorandum  includes  the exemptions  that                                                              
were listed under AS 23.10.050.                                                                                                 
                                                                                                                                
9:24:31 AM                                                                                                                    
                                                                                                                                
CO-CHAIR SPOHNHOLZ opened invited testimony on HB 372.                                                                          
                                                                                                                                
9:24:43 AM                                                                                                                    
                                                                                                                                
MYRANDA WALSO,  Acting Executive  Director, Governor's  Council on                                                              
Disabilities  and  Special  Education  (GCDSE),  provided  invited                                                              
testimony in  support of  HB 372.   She stated  that as  the State                                                              
Council on  Developmental Disabilities  (state  DD),   GCDSE works                                                              
with  community and  other state  agencies to  ensure that  people                                                              
with  intellectual  and  developmental   disabilities  (I/DD)  and                                                              
their families receive  the services and supports  that they need,                                                              
as  well as  participating in  the  planning and  design of  those                                                              
services.                                                                                                                       
                                                                                                                                
MS.  WALSO noted  she is  joined  today by  several GCDSE  council                                                              
members and self-advocates.   However, she continued,  one member,                                                              
Corey Gilmore,  chair of  the Community  Inclusion, Supports,  and                                                              
Services Committee,  could not attend  due to his  assisted living                                                              
facilitys  schedule  which governs when  he is able to  get out of                                                              
bed in the morning  and provides the transportation  he depends on                                                              
for basic care.   She said challenges like this  are an incredible                                                              
barrier  and are the  reality that  Mr. Gilmore  faces every  day,                                                              
including  affecting  his  participation  in the  public  process.                                                              
She related that  Mr. Gilmore believes passionately  in HB 372 and                                                              
his written testimony has been submitted to the committee.                                                                      
                                                                                                                                
MS.  WALSO  specified that  since  the  federal minimum  wage  was                                                              
established  in 1938, a  special reduced  compensation rate  known                                                              
as the  subminimum wage was  allowed for those with  disabilities,                                                              
which  lets employers  holding  a 14(c)  certificate  from the  US                                                              
Department of Labor  to pay those with disabilities  less than the                                                              
federal or state  minimum wage using worker productivity  rates as                                                              
the  sole factor  for  evaluating the  performance  of those  with                                                              
disabilities.   She  said  this discriminatory  method  determines                                                              
compensation only  for those with  disabilities and  requires that                                                              
they measure  up to  a standard  their non-disabled coworkers  are                                                              
not evaluated on  nor held to.   What if all  individuals over the                                                              
age of  65 had  to prove  they deserved  to earn  minimum wage  at                                                              
their  job, but  younger  individuals did  not?   she asked.  This                                                              
scenario,  she argued,  is just  as archaic as  this provision  in                                                              
Alaska  law  which   holds  to  the  notion  that   those  with  a                                                              
disability  do not have  the same  standing in  the job  market as                                                              
their  non-disabled  peers, regardless  of  the quality  of  their                                                              
work, talents, or skills.                                                                                                       
                                                                                                                                
MS.  WALSO  pointed  out  that [new]  federal,  state,  and  local                                                              
policies have developed  over the decades.  At  the federal level,                                                              
she  said, the  new understanding  is reflected  in the  Americans                                                              
with Disabilities  Act, the Individuals with  Disability Education                                                              
Act, the  Workforce Innovation  and Opportunity  Act, and  others.                                                              
In Alaska, the  Employment First Act requires  vocational services                                                              
be  provided to  help people  with  disabilities become  gainfully                                                              
employed at or above  the minimum wage.  In 2018,  the regulations                                                              
enacting  subminimum   wages  for  those  with   disabilities  was                                                              
repealed,  but  the  issue  remains unsettled.    She  said  GCDSE                                                              
supports  repeal  of the  statutory  provision allowing  any  such                                                              
regulations to be reintroduced in the future.                                                                                   
                                                                                                                                
9:28:25 AM                                                                                                                    
                                                                                                                                
HEIDI  LIEB-WILLIAMS, Chair,  Governor's  Council on  Disabilities                                                              
and  Special  Education  (GCDSE), provided  invited  testimony  in                                                              
support  of   HB  372.     She  shared   that  she   has  multiple                                                              
disabilities  but has broken  barriers and  received awards.   She                                                              
said  those with  disabilities have  gifts and  talents to  offer,                                                              
their  work is  just  as  valuable as  that  of others,  and  they                                                              
should  be  paid fairly  for  their  time  and knowledge.    Being                                                              
judged  based on  a disability  and  being offered  less pay  than                                                              
someone  is  worth is  demeaning,  she  continued.   People  often                                                              
define  themselves to  have purpose  in  life by  doing work  that                                                              
serves others in  the community and it matters that  they are paid                                                              
accordingly for making a difference to other Alaskans.                                                                          
                                                                                                                                
MS. LIEB-WILLIAMS  read a statement  from Mr. Corey Gilmore:    In                                                              
2018 we  advocated for  the DD shared  vision, which  put Alaskans                                                              
receiving services in  charge of their own care, and  this bill is                                                              
the next  step in  realizing the  vision for all  of Alaska.   Not                                                              
only does  the vision  give us the  right to  direct our  own care                                                              
but the repeal  of the subminimum wage further  solidifies that we                                                              
are competent  Alaskans with something  to offer our state.    She                                                              
urged the  committee to do  what is right  for a better  future in                                                              
Alaska.                                                                                                                         
                                                                                                                                
9:31:03 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  SPOHNHOLZ  thanked Ms.  Lieb-Williams  for  her work  as                                                              
chair  of the Council  and congratulated  her  for the awards  she                                                              
has received.                                                                                                                   
                                                                                                                                
9:31:28 AM                                                                                                                    
                                                                                                                                
RIC  NELSON,   Chair,  Self-Advocacy  and   Leadership  Committee,                                                              
Governor's   Council  on  Disabilities   and  Special   Education,                                                              
provided invited  testimony in  support of HB  327.   An assistant                                                              
read from Mr. Nelsons written statement as follows:                                                                             
                                                                                                                                
     This bill is  so important because all people  no matter                                                                   
     their disability  should get paid at least  minimum wage                                                                   
     to do the  same job as their able-bodied  peers.  Having                                                                   
     a  law that  singles someone  out as  not deserving  the                                                                   
     same  pay   solely  because   of  their  disability   is                                                                   
     dehumanizing.   As a  person with  a disability who  has                                                                   
     worked  hard to have  a successful  career and earned  a                                                                   
     master's  degree, I  find that  this statute  reinforces                                                                   
     the  misconception  that individuals  with  disabilities                                                                   
     are somehow  a liability for an employer.   Keeping this                                                                   
     statute  sends the message  that Alaska  is the land  of                                                                   
     opportunity only if you are not disabled.                                                                                  
                                                                                                                                
9:33:08 AM                                                                                                                    
                                                                                                                                
MR.  NELSON, responding  to Co-Chair  Spohnholz,  stated that  his                                                              
masters degree is in Public Administration.                                                                                     
                                                                                                                                
CO-CHAIR SPOHNHOLZ  thanked Mr. Nelson  for his service  to Alaska                                                              
through  the  Governor's  Council   on  Disabilities  and  Special                                                              
Education.                                                                                                                      
                                                                                                                                
9:33:59 AM                                                                                                                    
                                                                                                                                
CO-CHAIR SPOHNHOLZ announced that HB 372 was held over.