Legislature(2007 - 2008)BELTZ 211
02/28/2008 09:00 AM Senate STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SJR12 | |
| SB276 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SJR 12 | TELECONFERENCED | |
| *+ | SB 276 | TELECONFERENCED | |
| *+ | SB 208 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | SB 218 | TELECONFERENCED | |
SB 276-STATE CONSTRUCT'N PROJECT LABOR AGREEMENT
9:21:03 AM
CHAIR MCGUIRE announced the consideration of SB 276.
9:21:42 AM
SENATOR BUNDE moved to adopt a committee substitute (CS) to SB
276, labeled, 25-LS1247\M. Hearing no objection, Version M was
before the committee. The bill represents a fairness issue, he
said. His mother-in-law was a single mother working as a
waitress. She belonged to a union, paying her small dues out of
her tips. She visited him in Alaska for about six months. Her
union contract had a proviso about a break in service, so when
she retired she never received any benefits. There is something
similar in Alaska. There are people working under a labor
agreement who are not union members, but they are required to
pay into the union retirement and benefit plan.
9:23:46 AM
SENATOR BUNDE said these non-union workers never have access to
that money. It benefits the union retirement plan, because it
provides funds that will never be drawn on, but it is not fair
to the laborer. This is substantial money, like $40,000 worth of
benefits accumulated by someone working on the Alaska pipeline.
He spoke of a worker who passed away and his wife couldn't
collect because he hadn't been a union member. The gas line will
have $17 per hour that the employer pays into a benefit package,
and a non-union worker will never get that benefit. It isn't
fair. SB 276 gives employees the option of the union plan or
their current employer's plan. Non-union employees will have
benefits available if they never join the union and are covered
by the non-union employer plan. If that person joins the union,
the benefit contributions can be placed in that program.
9:27:16 AM
VINCE BELTRAMI, President, Alaska AFL-CIO, Anchorage, said he
applauds Senator Bunde for looking out for all employees who may
work under the terms of a project labor agreement (PLA). He said
he is not opposed to the bill but has recommendations. The
notion that PLAs discriminate against non-union workers is a
fallacy. Most non-union workers have realized superior benefits
that are offered by a joint labor management trust fund. Once
they realize how good the benefits are, they stay on with the
unions after the project is completed. Representative Mike Kelly
has a companion bill in the House, and he provided a press
release that identified three primary fringe benefits that he
said would discriminate against non-union employees working
under a PLA: health, training, and pension plans. Contrary to
claims bandied about by non-union employers and by
Representative Kelly's press release, the fringe benefit plans
that are offered under PLAs do not discriminate against non-
union employees. The medical plans are often superior. In a
typical plan an employee becomes a participant as soon as the
minimum qualifying requirements have been met, which is 300
qualifying hours and usually not more than a month and a half
when on a seven/ten schedule. It is no different from what a
long-time union member would need to qualify. Unlike typical
non-union plans, participants build up an hour bank that can
cover them with the good medical plans for as much as a year
after the project is completed, because that hour bank has been
built up. Typically coverage under non-union plans end with the
termination of the employee.
9:30:23 AM
MR. BELTRAMI said contributions that make participants eligible
for training are available to union and nonunion members if that
contribution is being made on their behalf. That entitles them
to OSHA training, HAZWOPER [hazardous waste operations and
emergency response], CPR, first aid, and any other skill-
specific upgrade training that many of the union training
programs provide. He doesn't know of any comparable training
programs in the non-union sector. The question that often
arises, and what probably was the impetus for SB 276, is the
pension contributions. Universally, defined benefit plans
require five years of vesting -- not ten years, as it was under
TAPS. At this point, the gasline project may not last long
enough for a participant to vest. "However they would vest if
the project was longer than that and they worked on it."
Accordingly, labor expects the licensee or whoever is
negotiating the terms of the PLA to bring up alternatives to
defined benefits. Many of the unions offer both defined benefit
and defined contribution plans. He fully expects the unions to
agree to a hybrid that allows fully-vested union members to
continue with their existing plans and an option for something
like is being suggested in this bill. The slippery slope is in
oversimplification of this element by a simple declaration of
benefits by the employee. The unions will fully agree to allow
its plans to be open and examined by all parties. The same must
be true of any non-union employers who work on the project and
who have some type of fringe benefit plans that they want to
have be considered for the project. Some non-union plans have
comparable benefits but many do not. Fraudulent plans are
difficult to navigate and leave employees without the benefits
that they thought they were getting.
9:32:57 AM
MR. BELTRAMI said it is imperative that the benefit options meet
the level of scrutiny that the union sponsored plan gets. Not to
include that type of provision would be a disservice to the
employees and contrary to what it seems the bill is trying to
accomplish. Another slippery slope is the precedence this bill
would set. He hasn't seen a legislative body legislate things
that are always mandatory subjects of collective bargaining.
"Will the legislature go on to negotiate more terms in other
collective bargaining agreements?" If this body moves in that
direction - although it might not pass legal muster -- it would
seem to be a subrogation of the duties assigned to others and a
proclamation that the legislature is ready, willing, and able to
take on more than it is typically faced with. But he is glad to
see the legislators looking out for the best interest of Alaskan
employees - "I do it everyday, and we don't just do it for our
members. Our concern and involvement over things like minimum
wage, unemployment insurance, and other issues demonstrates that
organized labor works hard on issues that do benefit working
Alaskans other than our union members." He urged the committee
to make sure that SB 276 protects employees who are not union
members to the same level as the union members who will go to
work under the terms of a PLA. He asked for amendments to
Sections 36.30.405 (b) 1, 2, and 3 to assure that employs will
get the same level of benefits as those provided to the typical
union members.
9:35:16 AM
CHAIR MCGUIRE asked what amendments he wants.
MR. BELTRAMI said he doesn't have a specific proposal, but he
asked for the plans to meet the same level of benefits that
exist under union plans.
CHAIR MCGUIRE asked if health, training, and pension all need to
be equal.
MR. BELTRAMI said certainly -- whatever the prevailing wage
package is. The fringe benefits need to be equal. Some plans
provide legal benefits. If a benefit plan is approved that is
contrary to the union, it has to be at least as good, so that
those who opt for it have the same coverage.
9:36:19 AM
SENATOR GREEN asked why he is concerned about that. "If I as an
employee choose to put my contribution somewhere else -- and why
you would care."
MR. BELTRAMI said, "We represent employees whether they're
members of our union or not. If you're going to go down this
slope and try to negotiate benefits…." Workers are essentially
deciding they want non-union benefits, not union benefits, so
they need to be comparable. They need to protect the employee in
the same way. The pension needs to be legitimate and approved,
and the training benefits need to be comparable.
SENATOR GREEN said, regarding vesting, Mr. Beltrami is comparing
something with a future with something without. If employees are
not going to get long-term benefits by contributing to the union
pension, wouldn't they want to put it in their existing plan?
9:37:41 AM
MR. BELTRAMI said he doesn't disagree, but if it is a defined
contribution plan, which is a mandatory subject of bargaining,
"anybody will be able to say -- from the employers' perspective
- we want this plan to be considered. We have agreed, in other
collective bargaining agreements, to have plans like that." But
the plan needs to be legitimate and recognized.
SENATOR BUNDE said retirement plans are covered under federal
regulations, so requiring a legitimate plan is already covered.
MR. BELTRAMI said he has seen some that are not legitimate and
that skirt ERISA [federal Employee Retirement Income Security
Act], and they have been problematic for non-union employees
working on Davis-Bacon jobs to be able to actually get the
benefit that they have been promised.
SENATOR BUNDE said maybe the title of the bill should be changed
to make it pro-choice. He said he can pick and choose state
health benefits. Not everyone wants the same coverage, "and I'm
suggesting that this bill should allow employees that choice."
He asked if there have been abuses of the union pension plan in
Alaska, like there have been nationally.
9:39:46 AM
MR. BELTRAMI said he saw a letter that came from Brian Miller of
Arctic Lights Electric where he makes that claim related to TAPS
- that people were left out of their benefits, and there was a
class action suit that spurned pension reform across the
country. It changed a lot of 10-year vesting to 5-year vesting.
The suggestion in the letter was that this cash went to the
union, which is inaccurate. The cash never goes to the union -
that would be a violation of ERISA -- it goes into union
management-operated joint trust funds that have all been
reformed to ensure that employees don't have that kind of abuse.
That was settled 30 years ago. Once it was settled the money was
distributed to the participants. People came to Alaska from
other parts of the country and never worked long enough to vest.
He said the I.B.E.W. set several million dollars aside in those
benefits when the suit came along. Once it was settled, the
money was distributed to those participants as was expected. He
is not aware of anything that goes on today under project labor
agreements or any other collective bargaining agreement where
employees are not entitled to the benefits they've earned. It
would be a violation of ERISA.
9:41:22 AM
CHAIR MCGUIRE said, so, "the concept would be that the benefits
program that would be offered that's non-union would meet the
same thresholds as the union."
MR. BELTRAMI said the language is too vague and subject to
challenges, because it won't do all it should do to protect
employees who might choose those options. The part about the
labor representative who negotiated the PLA should be corrected.
It is not the labor representative; it is the labor management
trust fund.
SENATOR BUNDE said it is a trust fund managed by the union.
MR. BELTRAMI said, "And the employers." He serves on the Alaska
Electrical Pension Trust Fund, and there are five union-
appointed trustees and five employer-appointed trustees. That is
the oversight of the trust; it is not the union.
MR. BELTRAMI said it is apparent that there are several
technical issues that need to be addresses. The bill in its
present form won't do what it tries to do.
9:43:56 AM
JEFF ROBINSON, Division Manager, Service and Installation, Klebs
Mechanical, Anchorage, said Klebs is the largest mechanical
contractor in Alaska. Project labor agreements place an unfair
financial disadvantage on workers who have not been subject to a
collective bargaining agreement prior to the project. They force
workers to make contributions to plans knowing full well they
will not receive the benefits. It is unethical. His employer
makes contributions to benefit plans on behalf of its employees
that range from $27,000 to $34,000 annually per worker. What
workers can make those kinds of contributions, especially those
that do not benefit them? His employer would never sign a PLA
because of that. There are smaller Alaskan contractors who might
sign an agreement on a large project, and so there are many
Alaska workers who would suffer that hardship. Many temporary
rural workers will never get vested and never see a dime of
their pension money. The most common vehicle used by open-shop
contractors is the 401K, which is what Krebs has, and that money
always belongs to the employees. If a worker leaves, the money
goes with him or her. The bill is great for both union labor and
open-shop contractors because it gives the worker the choice. It
has always been the union's assertion that it wants to do what
is best for the worker. SB 276 gives the worker the choice and
is a good compromise so that workers on large construction
projects receive the full benefit of their compensation package.
9:47:17 AM
SENATOR BUNDE said competition is good for business. Mr.
Beltrami suggested that all plans be the same. He asked if
having the option of different plans will provide competition,
and perhaps will put pressure on Krebs to change its plan to be
more competitive.
MR. ROBINSON said it could. He doesn't see how two plans could
ever be truly compared. It should be the workers' choice to
evaluate both plans and pick. Trying to make them the same would
be impossible to administer.
JEFF ALLING, President, Alcan Builders General Contracting,
Fairbanks, said he has between $5 million and $25 million worth
of work annually. PLAs discourage bidding by non-union
contractors for many reasons, including the negative financial
impact for an employer regarding pension, health and insurance.
Employers may have to double pay. There is a legal risk to not
contribute to the regular pension plan through the employees who
work on a project while contributions are made on their behalf
to union pension plans. The legal risk of suspending health
coverage while transitioning to another plan is substantial.
Benefit contributions for different crafts that he employees can
range anywhere from $13.00 to $18.00 per hour. Making double
payments makes a contractor uncompetitive in the bidding process
if it is non-union. Employees who sign on to a PLA and make
contributions to a union pension plan subject themselves for
withdrawal liability - meaning a contractor can be on the hook
for any future liabilities of a union plan. AGIA requires that
the licenses use Alaskan contractors to the maximum extant
possible, and it requires a PLA. These contradict each other. SB
276 is a good first step in removing one of the burdensome terms
of a PLA that keep contractors from bidding.
9:51:37 AM
SENATOR BUNDE asked if he continues a longstanding employee's
benefits if he or she goes to work on a PLA, while being forced
to make payments into the union plan.
MR. ALLING said that is correct. He has to follow the Davis-
Bacon prevailing wage program. A carpenter is paid $31.93 per
hour with a benefit package of $17.25 per hour. It brings the
total to $41.98. With workers compensation, Social Security and
other things, it costs him $60.00 per hour to put a carpenter in
the field. His company has been in business so long, it has
long-term employees who have chosen to stay because his company
provides a good package. "We are fair to them and they are very
comfortable working with us." They have chosen not to become
union members. If Mr. Alling is forced into a PLA he will be
non-competitive. To take care of his employees, his costs per
hour will be $77.25 as opposed to the $60.00 per hour that a
union contractor can use in bidding the same project. "That
would be union contractors from anywhere in the country. It
would give them a competitive advantage over my company." The
bill is good for the worker because it gives the worker the
option. He just had a PLA at Fort Greely, and he saw license
plates from every state brought up by union contractors.
9:54:40 AM
REBECCA LOGAN, President, Associated Builders and Contractors of
Alaska, said standard PLAs crafted in Alaska already give the
union the right to audit the books of the non-union contractors
that participate. Mr. Beltrami had mentioned adding that
provision, but it is already there. Any time a non-union
contractor signs onto a PLA they give the union a right to audit
all of their books. She is not opposed to comparable plans,
because they would be for contractors who work on the pipeline.
CHAIR MCGUIRE asked if that language could be worked on.
MS. LOGAN said something can be worked out. Mr. Robinson was
right that it would be hard to have an apples-to-apples
comparison of pension, health, welfare, and training. There are
so many ways that people train, she noted. There could be some
broad language.
SENATOR GREEN said her training program could probably be
comparable if she got as much from the state.
MS. LOGAN said, "We choose not to." The employers pay their own.
9:56:58 AM
SENATOR GREEN asked if she is saying that after the review of a
private employers plan, the union can refuse an employee from
coming on. "It's just a review - they can't reject."
MS. LOGAN said Mr. Beltrami was asking that the plans be
qualified under ERISA, and that's fair.
SENATOR GREEN asked if she really wants that in statute.
MS. LOGAN said she is open to suggestions.
SENATOR FRENCH said it sounds like the real money is in the
pension contributions; "that's where you go from $50.00 per hour
to $67.00." Perhaps there won't be an apples-to-apples
comparison, but workers need to make an informed choice, like
knowing whether they need to take five years to vest, for
example. A little more language is needed to ensure a worker can
make an informed decision. Mr. Beltrami said he is in favor of
the bill in general because it is pro-worker, "but it just
sounded like there just needs to be a little more disclosure …
at that moment that you make that decision that can have such
huge ramifications." He said he worked three years for an oil
company that had a five-year vesting plan. Whatever he
contributed to that oil company is gone forever. He was young
and didn't know any better. "When a vested non-union worker
steps into a PLA world, he's got an extremely important decision
to make."
9:59:43 AM
SENATOR BUNDE said he doesn't think the bill anticipates that a
union member would opt out of a union program. That may not be
possible. He doesn't want the bill to even suggest that
alternative. The options are only for the non-union people. But
he agrees with having more information available.
MS. LOGAN said there is a lot of discussion about what can be
done, but that is not the same as what will be done. In a PLA
often the terms are struck, and the majority of the people
covered by that will be left out of the negotiations. It is
appropriate the state is in this role as a market participant,
"that they can protect those people who don't get to participate
in the negotiations."
SENATOR BUNDE said Mr. Beltrami said the state shouldn't get too
involved in collective bargaining, and he is right except the
legislature and public employee unions are deeply involved
"because we have to fund the results of the bargaining."
10:01:22 AM
BARBARA HUFF, Director, Governmental and Legislative Affairs,
Teamsters local 959, said she had intended not to testify until
an electric company referred to the teamsters in a letter sent
to the Senate. She felt it was important to go on record,
"because what we're doing is living 30 years ago." There was a
class action suit that cost the teamsters "millions and millions
and millions of dollars." It came out of the pension plan - not
out of the teamster's general fund. It was not a cash cow. This
happened 30 years ago, she emphasized. Under ERISA there were
some drastic changes in federal law as a result of the lawsuits.
The teamsters had the deepest pockets. Everybody else fell in a
similar category. The teamsters negotiated a PLA with the owners
anticipating that if there will be a gasline, there will be
those particular managing companies who will ultimately decide
who the "subs" will be. "It is not our job to negotiate," or to
have a bill drafted here. "I'll use the convention center;
introduce a bill down here that says - and the unions are
pushing this - so that we can designate - or by law designate --
who those subcontractors are going to be on that project." That
goes back to that successful contractor who goes through a
selection process. This bill is attempting to piecemeal specific
areas of law that are mandatory subjects of bargaining.
MS. HUFF said, "We go through the negotiating process with
whomever that particular designated employer or employers … on a
project labor agreement, and we're very much aware of that."
Thirty years ago decisions were made and folks were impacted.
"Nobody talks about the health benefits that these individuals
all had; they walked in, they had free prescriptions, they had
free hospital care, they had everything that was given to them
under our negotiated health benefit plan." Nobody talks about
that or the recreation centers and medi-vac planes to take care
of workers that the union represented "during those particular
times." There were some very good things. "Yes, we were taken to
court. Yes, we went through that process, and we paid millions
and millions and millions of dollars back." They now moved on
and have negotiated many collective bargaining agreements and
represent thousands of workers around Alaska. Negotiating fair
and reasonable agreements is their job. "We want to make sure
the workers are protected and that they are knowingly offered a
benefit package that, indeed, they can survive." Vesting is five
years. The teamsters have collective bargaining agreements with
employers who have pension plans under the teamster plan, and
there are some that actually have employer plans. That is a
decision that is made when the collective bargaining agreement
is negotiated and brought back to the employees with an up or
down vote.
10:06:01 AM
MS. HUFF said, "We are open; we are transparent." It is not 30
years ago, and she wants to move forward and work together. The
teamsters don't want to make the same mistakes. They sold their
recreation centers, hospitals, and jet airplanes and now they
just represent the employees, which is the job the members want
them to do.
10:07:08 AM
ANTHONY SIVERTSEN, Juneau, said he worked under Davis-Bacon
wages for a paving company. He worked with commercial off-shore
fishing companies all the way to Hawaii and asked if he was
"paying into this."
SENATOR BUNDE said he is not aware that they were under a PLA.
MR. SIVERTSEN asked, "Who is paying for this fund that's coming
in … the money to give the worker the choice? Who's paying for
that, the union?"
CHAIR MCGUIRE said the discussion is about project labor
agreements - a very specific type of contract. The bill is
proposing that a worker would be given a choice of benefit
contributions going to the union or to some other plan. "If you
weren't under a project labor agreement, then the bill doesn't
apply to you."
10:09:40 AM
CHAIR MCGUIRE said SB 276 will be set aside.
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