Legislature(1997 - 1998)
04/28/1997 03:27 PM House 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
HB 223 - NO OVERTIME EXEMPT FOR CONTRACT FLEXTIME [Contains discussion of HB 68.] Number 0046 CHAIRMAN NORMAN ROKEBERG announced the first order of business would be HB 223, "An Act removing the exemption from overtime pay requirements for work performed under a flexible work hour plan included as part of a collective bargaining agreement." Number 0065 REPRESENTATIVE JEANNETTE JAMES, sponsor of HB 223, came before the committee. She explained one of the issues that came up on the House floor regarding HB 68 was that there isn't a level playing field in that if you want to do something, and you're covered by a collective bargaining agreement, you could do it. If you aren't covered by a collective bargaining unit, you couldn't do it. She said there seems to be some dichotomy, in statute, that would mandate that people should have a collective bargaining agreement which some people disagree with. She explained that there needs to be a level playing field and the first way to do that is to do away with exemption 13. Representative James said she checked to see how many collective bargaining agreements currently exist that have a flexible work plan and that wouldn't necessarily pay overtime after 8 hours, but would pay overtime only after 40 hours. According to the Department of Labor, there are three such agreements and there may be four. She said HB 223, however, doesn't make it retroactive as it is not her intent that it interfere with any existing agreements. It would only preclude any new agreements from being made under this. Representative James said, "I think it's probably really proper that I mention that on the issue of House Bill 68, that I have been working extensively since the bill was filed in the first place, to come to some agreement on language with all the interested parties that that bill could be addressed. Quite frankly, I cannot support House Bill 68 the way it is currently drafted because it is too drafty. And so it needs to have some more definition and whether or not we can get that definition is still to be researched. But I still am interested in getting this particular part because if we wanted to put this back in the legislation, we can do it. And I'm successful in getting some other legislation that would address the concerns with House Bill 68. We can certainly put this back in that process and, in the meantime, with what we've got on the table I still would like to take this part away so we do have a level playing field." REPRESENTATIVE JAMES explained something expressed in the resolution from the Greater Fairbanks Chamber of Commerce is that they really do hope that there is a level playing field and HB 223 does that in a simple way. She said she would be happy to answer any questions. Number 0331 REPRESENTATIVE JOHN COWDERY referred to previous Labor and Commerce Committee hearings on HB 68 and said the committee members received information listing existing exemptions from the overtime requirement. He said there were over 800 agreements currently in Alaska. REPRESENTATIVE JAMES said, "Well if I could respond to that, Representative Cowdery, I think you're probably referring to the `4 - 10s.' That is under I believe 14 -- the 14 which whether you're a collective bargaining or not collective bargaining, you can file a plan with the Department of Labor to work `4-10s.' That allows you to not pay overtime over 8, however, you cannot work longer than 10 on the regular schedule and you cannot work over four days, in other words, to do that. So it's a plan where you work `4-10s.' It might be a proper way to insert that right now. I think that law is being misused, personally, that's my personal opinion because this way they can put in eight days in a row without any overtime by working `4-10s' and `4-10s' at opposite ends of the week. And I'm personally opposed to working anything that circumvents the requirement of 40 hours in a week and so I'm not really interested. I think that there is a problem with that particular law that we have on the book and I'm not here to fix it. But that 800 people that you're talking about are probably that number 14 exemption and a lot of those are construction that only work in the summers, so there is a good argument for them to work 10 hours without overtime." Number 0532 REPRESENTATIVE COWDERY noted it isn't 800 people, it is 800 businesses. REPRESENTATIVE JAMES said she understands. REPRESENTATIVE COWDERY said some people who work for the Department of Corrections work "7-12s." There are other exemptions for the Alaska Marine Highway System. REPRESENTATIVE JAMES indicated she has repeatedly reviewed those exemptions. She said she believes there are 17 and almost every one of those exemptions are for certain types of businesses that really can't work on a normal work week or normal work day, such as newspapers, et cetera. Representative James said exemption 13 sticks out like a soar thumb, like carte blanche for unions to make this kind of an agreement. If it is not allowable for people who are nonunion, then it shouldn't be allowable for a union. She said that is her point with the legislation. All the other exemptions have nothing to do with whether or not collective bargaining can do something than others. Number 0613 REPRESENTATIVE TOM BRICE said the bill won't impact standing collective bargaining agreements, so he assumes that once the contract is over and they renegotiate, at that point in time they would lose the 12 hours. REPRESENTATIVE JAMES said it isn't her intent for that to happen. She suggested asking someone from the Department of Labor. Number 0700 REPRESENTATIVE GENE KUBINA pointed out that you don't have to belong to a union to get an exemption under exemption 13. The people that are at Fort Knox have sent legislators a petition that states that they want to be exempt from this law. If the wording is changed on the petition just a little bit to say that as a group, they collectively want to be done with that - negotiate out of that, they can sit down and do that. They don't have to join any union in the state. They can do that as group of employees by themselves. REPRESENTATIVE JAMES indicated that is Representative Kubina's interpretation of the law and not her interpretation. She said she doesn't think that's true because it says, "...by collective bargaining." She pointed out there are really strict regulations that pertain to collective bargaining. It depends on how much the employer is involved in that issue and there also has to be some kind of a plan that meets the national labor standards as to what really collective bargaining is. It might be considered coercion. REPRESENTATIVE KUBINA said his point is that they could say they want to be represented for that issue and that issue only. REPRESENTATIVE JAMES said, "That only responds to that list of employees. Tomorrow, the employees may be a different group. What about the new people that come in? They haven't agreed to that and they're not a member of a union. It gets complicated." Number 0851 ED FLANAGAN, Deputy Commissioner, Office of the Commissioner, Department of Labor, came before the committee to testify in support of HB 233. He said there has been a lot of contention and a lot has been made of the fact that there are specific exemptions in the private sector for work places that modify their work week under a collective bargaining agreement. Mr. Flanagan said, "What is now 13 and 14, 14 is the `4-10s' flex plan, they were initiated in 1981, and initially in the House side it was one exemption and it just related to `4-10s,' and the two options for doing it were either boom, (A) a collective bargaining agreement; or (B) a written voluntary plan approved by the department in the case of a nonunion employer. Even though it was only 16 years ago, the legislative record is remarkably sketchy. And it went into the Senate and they had, at that time, a labor and management committee and it came out two separate exemptions and the `4-10s' language remained, and the one for work places not covered by a collective agreement. The exemption under what is now number 13 appeared to give carte blanche. It's hard to determine if that was the intent and it has been only utilized, to our knowledge, by three or four private sector employers. We did become aware of a fourth utility that may have some powerhouse employees covered by it at Golden Valley Electric. But the total number of employees in the 16 years the law has been extant is very small, probably something like 20 or 30 employees. When I spoke with the sponsor on this bill, she did declare her intent to grandfather the few existing agreements and the bill seemed to addressed that. I guess it might require an attorney general or your leg. counsel to take a look at that - if Representative Brice's possible interpretation would prevail. I don't know. It looked, at first blush, like that could work to grandfather the three or four existing units in there." MR. FLANAGAN referred to the 800 exemptions and said that would be the list the department provided of all the "4-10" agreements. He noted some of them are union employers and it applies to their nonunion employees, like the office staff of a construction firm that has signed with the union. They will also have a voluntary "4-10s" plan for its nonunion employees. He noted a lot of those employers are no longer in business. Mr. Flanagan indicated the department keeps the plan on file. He said, "If the employer goes out of business or if the plan - they don't even have to notify us if the plan goes out, the employees can elect to opt in and out of the `4-10s' plan every November - December. Under regulation, there is a window period where they can -- but once they elect then they're locked in for the year. So that's not an accurate count of who is out there. If we get a complaint or if we have a wage and hour problem with an employer and they say, `Well we have a 4-10s plan,' then we go -- if we have it on file and unless there has been some notification, it's still considered to be active. So whether there are 800 work places out there, that's probably pretty high, but we did compile that list from our three regional our three wage and hour offices." MR. FLANAGAN referred to the petition question and said the department's interpretation of the existing exemption 13 is a collective bargaining agreement. While there is nothing to keep a group of employees from creating their own independent union, he believes they would have be organized and recognized as a union and have a valid collective bargaining agreement in effect. Mr. Flanagan informed the committee that during testimony on HB 68, there was discussion about forming a union to do this. He said he doesn't think that is really the intent of the law. The department doesn't feel that people should form a union just for the purpose of giving up overtime. MR. FLANAGAN said he thinks that HB 223 does address what has been a perceived unlevel playing field. He said let's remove any hint of inherent unfairness and have everybody, when it comes to modifying workweeks, play by the same set of rules, which currently exist in AS 23.10.060(d)(14). REPRESENTATIVE KUBINA asked Mr. Flanagan if there are any other exemptions he would recommend getting rid of. MR. FLANAGAN said he thinks some of them are archaic. There might be a switchboard operator in the state with an exchange of 750 customers or less, but he doubts it. He said some of them are in the federal lair, and in some cases they represent what the political realities were at the time that the Wage and Hour Act was promulgated. Mr. Flanagan explained that generally, the Department of Labor doesn't support additional exemptions. The department would probably look favorably on a review of the existing exemptions to see if they are still appropriate. He said from a pragmatic point of view, the department isn't really proposing that at this time since the trend has been more to adding exemptions rather than to remove them. He noted this exemption is a unique exemption. Number 1250 CHAIRMAN ROKEBERG said, "Right now, the existing law with the flextime is such that unless you had a collective bargaining agreement, there is no ability, even if all the employees agree to go beyond the 10 hours without paying overtime, but as I understood it there is not even an ability to allow 12 hours even with a paid overtime, under a flex plan. Is that correct?" MR. FLANAGAN responded, "Yes, not under a flex plan. Of course an employer can work 12 hours, they can work 18 hours - whatever, but they pay over 8. When it comes to an approved `4-10s' plan under existing exemption 14, the department -- the regulation we only approve work schedules that are based on `4-10s.' Not on -- if you were regularly scheduled for `4-12s,' we would not approve that and say, `Okay, but you can pay straight time for 40 and overtime over 10.' There is language in the exemption of 14 that refers to overtime in the event it goes over 10, but that is for the inevitable or unforeseen emergency situation or unanticipated overtime or somebody doesn't show up on the next shift. So there is a mechanism for paying overtime over 12, but the regulation only allows plans based on `4-10s' or no more than 10 hours a day." Number 1344 CHAIRMAN ROKEBERG said there seems to be a gap in terms of the statute. He said if an employee group, working with the employer, came to the department and requested the flex plan, they would not be able to work beyond the 10 hours even if they wanted to pay overtime over 10 hours. He asked if any thought has been given to giving the commissioner the ability to review the circumstances. He noted that currently the commissioner isn't allowed to do that. Number 1393 MR. FLANAGAN responded, "We looked at the regulation when the question came up. We stand by the interpretation that under the current law, and the inclination of the commissioner and the department that regularly scheduled work that is regularly scheduled for more than 10 hours should pay overtime over 8 -- that the flexibility could be in a `4-10' situation or one of the `9-80' like the feds work. We have accommodated those type of plans where an employee works 9 hours -- in a two week period they work 9 hours for eight days then 8 hours on their ninth day and then they have every other Friday off. We've accommodated those, but we have not made the jump and are not, at this point, willing to make the jump to something scheduled regularly for more than 10 hours with a overtime break - with a break on the overtime pay." CHAIRMAN ROKEBERG asked Mr. Flanagan if he is saying that any kind of scenario that provides for a 40-hour week, at regular time and anything over 40 hours being overtime, is something the department wouldn't necessarily agree to given the number of hours in a day. MR. FLANAGAN said that is correct if it included a regularly scheduled shift of 10 hours. Number 1480 REPRESENTATIVE JOE RYAN said there are two statutes, one says anything over 8 hours a day is premium time and anything over 40 hours a week is premium time. He said, "The purpose of the 10-hour day with the 2 hours of time and a half - the premium time, and the flexibility allowed, did that tie into the 8 hours a day or 40 hours a week -- or how was that brought about that the regulations stipulated no more than 10." MR. FLANAGAN explained it is his understanding that all anybody was looking for in 1981 was "4-10s." That was the alternative workweek that the union group which had come forward seeking that the legislation requested because the employees wanted to work "4-10s" and the employer wanted to make sure the department wasn't going to ding them. It evolved into two exemptions instead of one. He noted he believes the company was Wien Airlines. Number 1546 CHAIRMAN ROKEBERG indicated there were no further witnesses to testify on HB 223. He said HB 223 would be held over for further consideration.
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