03/25/2024 01:30 PM Senate LABOR & COMMERCE

                 SB 153-OVERTIME PAY EXEMPTION                                                                              
                                                                                                                                
2:35:44 PM                                                                                                                    
CHAIR  BJORKMAN   reconvened  the   meeting  and   announced  the                                                               
consideration  of  SENATE  BILL  NO. 156,  "An  Act  relating  to                                                               
commercial  passenger vessel  environmental compliance;  relating                                                               
to commercial passenger vessel  fees; establishing the wastewater                                                               
infrastructure grant fund; repealing  the authority for citizens'                                                               
suits  relating  to  commercial  passenger  vessel  environmental                                                               
compliance; and providing for an effective date."                                                                               
                                                                                                                                
2:36:15 PM                                                                                                                    
CATHY  MUNOZ,  Commissioner  Designee, Department  of  Labor  and                                                               
Workforce Development (DOLWD), Juneau,  Alaska, introduced SB 153                                                               
on behalf  of the  administration. She said  that the  purpose of                                                               
this legislation  is to add  a section AS 23.10.060  that creates                                                               
an exemption for  overtime pay for full-time  employees working a                                                               
flexible work  schedule for up  to 12  hours per day,  three days                                                               
per week.  She stated that  eligible entities  include ambulatory                                                               
surgical centers,  child placement agencies, foster  homes, birth                                                               
centers,  hospices,  nursing  facilities,  residential  childcare                                                               
facilities,  and residential  psychiatric treatment  centers. She                                                               
explained that,  under statutory authority, overtime  pay applies                                                               
to work performed  over 40 hours in  one week or over  8 hours in                                                               
one day.                                                                                                                        
                                                                                                                                
MS.  MUNOZ  explained  that  state   law  currently  provides  an                                                               
exemption of  state overtime requirements  in flexible  4/10 work                                                               
schedules -  that is, ten hours  per day for four  days per week.                                                               
She noted  that these are  voluntary agreements  between employer                                                               
and  employee (a  written, signed  document is  submitted to  the                                                               
Department of Labor in order  to authorize these agreements). She                                                               
stated  that  SB  153  would  add  an  additional  flexible  work                                                               
schedule of  12/3 -  that is,  twelve hours a  day, three  days a                                                               
week. This  would provide employers  with a new  recruitment tool                                                               
and  prospective   employees  with   the  opportunity   to  enjoy                                                               
additional downtown during the week.                                                                                            
                                                                                                                                
2:39:00 PM                                                                                                                    
JEREMY  APPLEGATE,  Chief  Wage  and Hour,  Labor  Standards  and                                                               
Safety Division,  Department of  Labor and  Workforce Development                                                               
(DOLWD), Anchorage, Alaska, offered a  presentation on SB 203 and                                                               
advanced to slide 2:                                                                                                            
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Purpose                                                                                                                  
                                                                                                                                
     Increase the hours of flexible work hour plans from 10                                                                     
     hours to 12 hours per day for certain businesses.                                                                          
                                                                                                                                
      Allow more flexibility in staffing for the following                                                                      
     entities:                                                                                                                  
        • ambulatory surgical centers                                                                                           
        • child placement agencies                                                                                              
        • foster homes                                                                                                          
        • free standing birth centers                                                                                           
        • hospices                                                                                                              
        • agencies providing hospice services or operating                                                                      
          hospice programs                                                                                                      
        • nursing facilities                                                                                                    
        • residential childcare facilities                                                                                      
        • residential psychiatric treatment centers                                                                             
                                                                                                                                
MR. APPLEGATE stated that the  covered entities are defined by AS                                                               
47.32.010.                                                                                                                      
                                                                                                                                
2:40:22 PM                                                                                                                    
MR. APPLEGATE advanced to slide 3:                                                                                              
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Overtime                                                                                                                   
                                                                                                                                
        • Employers must pay overtime to employees who:                                                                         
             • Work more than 8 hours per day                                                                                   
             • Work more than 40 hours per week                                                                                 
                                                                                                                                
               Alaska Statute 23.10.060                                                                                         
                                                                                                                                
MR. APPLEGATE  explained that  Alaska is  a dual  overtime state,                                                               
meaning there  is a daily  and weekly overtime.  Federal overtime                                                               
is based  on the week. He  clarified that the changes  made by SB
 apply  to the  daily overtime, as  state law  cannot override                                                               
the federal requirement.                                                                                                        
                                                                                                                                
2:41:18 PM                                                                                                                    
MR. APPLEGATE  advanced to  slide 4  and explained  that overtime                                                               
applies to all  employees who are not otherwise  exempt. The flex                                                               
time provides for a partial overtime exemption.                                                                                 
                                                                                                                                
2:41:44 PM                                                                                                                    
MR. APPLEGATE advanced to slide 5:                                                                                              
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Flexible Workhour Plans                                                                                                  
        • Allow employees to voluntarily work up to 10                                                                          
          hours    without    overtime    (Alaska    Statute                                                                    
          23.10.060(14))                                                                                                        
        • Are reviewed and approved by the Department of                                                                        
          Labor (8 AAC 15.102)                                                                                                  
        • Require overtime payment for hours worked outside                                                                     
          the agreement                                                                                                         
                                                                                                                                
MR. APPLEGATE emphasized that an  employee must voluntarily enter                                                               
into a flexible  workhour plan and briefly  explained the process                                                               
of plan approval. He stated that  employees can choose to opt out                                                               
of  their flexible  workhour  plans  (without employer  approval)                                                               
between November 1  and December 31 (the  standard yearly opt-out                                                               
period). The  employer can allow the  employee to opt out  at any                                                               
time.                                                                                                                           
                                                                                                                                
2:43:12 PM                                                                                                                    
MR. APPLEGATE stated  that hours worked beyond the  plan that are                                                               
considered incidental  to employment are paid  overtime; however,                                                               
if  the employer  schedules  the employee  beyond  the ten  hours                                                               
allowed  by  the  plan,  this is  not  considered  incidental  to                                                               
employment.  In   the  latter   case,  the  agreement   would  be                                                               
considered invalid,  and the  employer would  be required  to pay                                                               
overtime for all hours worked in  excess of eight hours in a day.                                                               
The  standard overtime  pay (1.5  times  the rate  of pay)  would                                                               
apply.                                                                                                                          
                                                                                                                                
2:44:11 PM                                                                                                                    
MR. APPLEGATE moved to slide 6:                                                                                                 
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Summary                                                                                                                  
                                                                                                                                
        • The legislation would allow employees to work up                                                                      
          to 12 hours                                                                                                           
       • Require overtime for work over 12 hours in a day                                                                       
        • Remain voluntary on behalf of the employee                                                                            
        • Only apply to businesses licensed under Alaska                                                                        
          Statute 47.32.010(b)                                                                                                  
                                                                                                                                
2:45:24 PM                                                                                                                    
SENATOR MERRICK asked why this would be limited to 47.32.010.                                                                   
                                                                                                                                
MR. APPLEGATE answered  that, to his understanding,  this was the                                                               
industry  asking  for  the  change.  He added  that  he  has  had                                                               
conversations  with those  in this  industry  and explained  that                                                               
their need  stems from the  shift change standard of  practice in                                                               
the medical  industry and a need  to have all staff  on a similar                                                               
shift change  schedule. This  allows for  continuity of  care and                                                               
good  communication. However,  he  added that  this change  could                                                               
easily be extended to all businesses in the state.                                                                              
                                                                                                                                
2:46:33 PM                                                                                                                    
SENATOR  DUNBAR  asked  how employers  would  be  prevented  from                                                               
making these shifts a requirement for employment.                                                                               
                                                                                                                                
MR. APPLEGATE answered  that there is no way  to directly prevent                                                               
employers  from  making  this a  requirement  of  employment.  He                                                               
stated  that  the  Labor  Standards and  Safety  Division  is  an                                                               
evidence  based, fact  finder agency.  He explained  that once  a                                                               
violation has occurred,  the division would look  for evidence of                                                               
the  violation and  take the  appropriate enforcement  action. He                                                               
acknowledged  that  unless  a  violation   is  brought  to  their                                                               
attention - or if the  investigation of a reported violation does                                                               
not turn up demonstrative evidence  that a violation has occurred                                                               
- there would be no enforcement action.                                                                                         
                                                                                                                                
SENATOR  DUNBAR  shared  his experience  working  overtime  as  a                                                               
cannery employee and surmised that  many interviewees do not know                                                               
that this statute exists - and  are therefore not aware that they                                                               
are entitled to overtime for hours  worked in excess of 8 hours a                                                               
day (unless they  have signed a contract for  a flexible workhour                                                               
plan).  In addition,  he surmised  that employees  are not  aware                                                               
that they  cannot be denied employment  if they refuse to  sign a                                                               
flexible workhour contract. He observed  that the division has no                                                               
way  to  proactively  enforce  this  statute  and  asked  if  the                                                               
division  ever sends  staff through  the hiring  process to  test                                                               
these practices.                                                                                                                
                                                                                                                                
2:48:54 PM                                                                                                                    
MR. APPLEGATE answered that the  division does not engage in this                                                               
type  of activity.  He explained  that cases  are brought  to the                                                               
division via a  wage claim process. He added  that when employees                                                               
are presented  with a flexible  workhour plan, the  forms contain                                                               
the relevant statutory information.                                                                                             
                                                                                                                                
2:49:44 PM                                                                                                                    
SENATOR  DUNBAR expressed  concern  with a  request to  massively                                                               
expand this program in a  sophisticated industry with high-demand                                                               
professionals.  He  commented  about the  potential  for  abusive                                                               
labor  practices and  the ability  for  employees in  high-demand                                                               
industries  to   find  employment  at  less   abusive  locations;                                                               
however,  this is  not the  case in  every industry.  He directed                                                               
attention to AS  47.32.010 (b) and shared  his understanding that                                                               
the  Municipality  of Anchorage  would  like  to expand  this  to                                                               
include behavioral  health providers. He  noted that the  list of                                                               
allowed  facilities  includes residential  psychiatric  treatment                                                               
centers and subacute mental health  facilities and asked if there                                                               
are  any behavioral  health providers  that are  not included  in                                                               
this program.                                                                                                                   
                                                                                                                                
MR. APPLEGATE replied  that he would have to look  into this more                                                               
closely to make a determination.                                                                                                
                                                                                                                                
SENATOR  DUNBAR  suggested that  this  could  be a  question  for                                                               
someone in  the department to  answer before the next  hearing on                                                               
SB  153.  He  commented  that  drug  treatment  facilities  where                                                               
patients require 24-hour  monitoring is one example  of when this                                                               
shift work would  be appropriate. He suggested  that reaching out                                                               
to  behavioral health  organizations to  find out  if they  would                                                               
want to  make this change  and opined that these  providers would                                                               
benefit from this.                                                                                                              
                                                                                                                                
2:52:11 PM                                                                                                                    
SENATOR DUNBAR asked if the  department has spoken with employees                                                               
and bargaining units regarding this change.                                                                                     
                                                                                                                                
2:52:41 PM                                                                                                                    
MS.  MUNOZ answered  that this  was brought  to the  department's                                                               
attention  a year  ago by  individuals  involved with  ambulatory                                                               
surgical centers  as a means to  boost recruitment opportunities.                                                               
She   explained  that   this  industry   is  experiencing   labor                                                               
shortages, and this  would be a recruitment  incentive. She added                                                               
that, beyond  this there has  not been expansive  discussion with                                                               
other employers or employees.                                                                                                   
                                                                                                                                
MS.  MUNOZ  stated  that the  division  would  gather  additional                                                               
information  regarding  behavioral  health providers  that  could                                                               
possibly be  incorporated into the legislation  and would provide                                                               
this to the committee.                                                                                                          
                                                                                                                                
2:54:11 PM                                                                                                                    
CHAIR BJORKMAN held SB 153 in committee.