Legislature(1999 - 2000)

04/22/1999 01:40 PM House FIN

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

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