Legislature(2003 - 2004)
05/06/2003 01:35 PM Senate L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 210-WAGE AND HOUR OVERTIME COMPUTATION
CHAIR BUNDE announced SB 210 to be up for consideration.
MS. JANE ALBERTS, committee aide to the Senate Labor and
Commerce Committee, said SB 210 closes a loophole in statute
regarding the payment of overtime wages. She explained:
In 1999, the legislature passed a law to correct an
erroneous court interpretation of a statute that
authorized the pyramiding of overtime hours, which is
the payment of overtime wages both daily and weekly
for the same hour of work.
In 1999, at the last minute on the floor the
retroactive date in that bill was taken out, which
left a loophole for the years 1997 to 1999, thereby
leaving employers vulnerable to pyramiding lawsuits.
The bill made clear the future claims would be
forwarded, but it did not address the two lawsuits
filed in 1997 that are still active cases at this
time.
In those cases, the employers computed the overtime in
accordance with the Alaska Department of Labor
methodology. The purpose of this bill is to close this
loophole, [and to] make clear the interpretation on
computing overtime wages under Alaska's Wage and Hour
Act that prohibits the use of pyramiding in overtime
pay....
COMMISSIONER GREG O'CLARAY, Department of Labor and Workforce
Development, said in his 38 years of representing laborers he
had never seen an interpretation of the Wage and Hour Act like
this particular court's interpretation. He told members:
Under the Alaska State law, if you work more than
eight hours in a day or 40 hours in a week, you are
entitled to overtime and time and a half times the
basic straight time rate. If a worker worked 10 hours
on Monday and then a series of four-eights, he got two
hours of overtime for his two extra hours on Monday
and then nothing further for the week, but this
particular court interpreted that to mean he got paid
for overtime again, because he worked 42 hours in a
week - unheard of anywhere in the country that I can
see. This particular bill will correct that problem.
It will also wipe out the continuing liability of
those two companies. The Department of Labor supports
the bill, supports the concept of cleaning up this
particular misinterpretation of the law....
MR. JOHN SHIVELY, Vice President, Government and Community
Relations, Holland America Line, said a lawsuit against Holland
America [filed by an employee] prompted this legislation. The
case started in a superior court, went to district court, and
then back to a superior court, which ruled the employee was
entitled to double accounting of his overtime, or pyramiding.
Holland America paid the claim because it was only $21, but the
plaintiff appealed and it went to the Supreme Court, which
remanded it and allowed a class action suit. So, Holland America
is potentially faced with millions of dollars in liability if
Judge Weeks' decision is found to be correct. A counter decision
by Judge Collins found the Wage and Hour Law interpretation to
be exactly as Commissioner O'Claray said it should be.
MR. SHIVELY said this legislation is retroactive. It puts the
finishing touch on a piece of legislation that passed in 1999
that had a retroactive provision that was taken out at the last
minute. He thought this is a reasonable bill; legal research had
been done on the issue of retroactivity and that is within the
purview of the legislature. No constitutional right is being
violated and there has been no final judicial decision.
CHAIR BUNDE informed members that he also asked Legislative
Legal and Research Services counsel to provide an opinion, which
says that retroactivity is constitutional.
SENATOR FRENCH asked if it is true that there was no decision
made on the pyramiding aspect of Judge Weeks' ruling.
MR. SHIVELY replied that is correct.
SENATOR FRENCH asked if any other state has ruled that
pyramiding is the way to calculate overtime.
MR. SHIVELY answered that he had not done that kind of research,
but the commissioner had indicated that he was unaware of it
anywhere.
MR. DON ETHERIDGE, AFL-CIO, supported SB 210. The AFL-CIO worked
in 1999 to create the current statute and believes that the
commissioner's interpretation is correct.
SENATOR SEEKINS moved to pass SB 210, Version A, from committee
with individual recommendations and attached zero fiscal note.
SENATORS FRENCH, DAVIS, STEVENS, SEEKINS and BUNDE voted yea;
and SB 210 moved from committee.
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