Legislature(1997 - 1998)
04/29/1998 03:22 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 347 - OVERTIME WAGE EXEMPTION FOR MECHANICS Number 0121 CHAIRMAN ROKEBERG announced the committee's next order of business would be HB 347, "An Act relating to an exemption from overtime wage requirements for certain motor vehicle mechanics." Number 0122 REPRESENTATIVE JOHN COWDERY said the Department of Labor (DOL), the mechanics and the shop owners had worked on this bill for some time. He said they had come to an agreement, suggesting "somebody from labor or somebody from here" might like to speak to the last amendment, and then the committee could hear from Mr. Allwine. CHAIRMAN ROKEBERG stated the chair would entertain a motion to adopt the proposed committee substitute for HB 347, Version F, labeled 0-LS1390\F, Cramer, dated 4/24/98. REPRESENTATIVE HUDSON made a motion to adopt Version F. There being no objection, Version F was adopted. CHAIRMAN ROKEBERG asked Representative Cowdery if he would speak to the proposed committee substitute. REPRESENTATIVE COWDERY indicated he would prefer to have Mr. Allwine of the Alaska Auto Dealers Association (AADA) testify on Version F, noting they had worked out the proposed committee substitute. Number 0137 STEVE ALLWINE, Vice President, Alaska Auto Dealers Association, came forward to testify. He stated he wished to read a statement which clarified what the association believed to be everyone's understanding and offered copies to the committee. CHAIRMAN ROKEBERG indicated the statement would be entered into the record, asking Mr. Allwine to describe it briefly as best he could instead of reading it. Mr. Allwine's written statement reads: It is the intent of this amendment to the Alaska Wage and Hour Act to simplify the computation of the regular rate of pay for flat rate mechanics. When a flat rate mechanic is paid an amount equal to or in excess of his/her straight time hours (up to 8 hours in a workday or 40 hours in a workweek) at the flat hourly rate defined in subsection (B) of the bill, and is paid for all hours worked in excess of 8 hours in a workday or 40 hours in a workweek, whichever is greater, at 1.5 time such flat hourly rate the mechanic is exempt from the overtime requirements of the Alaska Wage and Hour Act. This is true whether the flat hourly rate earnings (billable hours times the mechanic's flat hourly rate) are less than or greater than the mechanic's compensation computed in accordance with subsections (C) and (D). If the flat rate mechanic's billable hours times his/her flat hourly rate are greater than the amount computed under subsections (C) and (D) then the billable hours amount shall be paid as the employee's gross pay for the workweek and no overtime premium, daily or weekly, is due. Two examples follow using a flat hourly rate of $20.00. Example One The mechanic works 9 clock hours and bills 9 hours each day Monday through Friday. The minimum amount due the mechanic per 23.10.060(d)(17)(C) and (D) is 40 straight time hours (five 8 hour days) at $15.00 [75 percent of $20.00 is $15.00 or twice the Alaska minimum wage of $5.65 ($11.30), so that $15.00 is used] or a total of $600.00 regular time plus five hours in excess of 8 hours in a day or 40 in a week, figured on a weekly basis, at 1.5 times $15.00 or $22.50 for overtime pay of $112.50 which yields $712.50. The mechanic's flat rate pay is $900.00 (45 billable hours times $20.00) so that the employee is paid $900, because this amount exceeds the minimum compensation due under the (d)(17) exemption no additional overtime premium is due. Example Two The mechanic works 9 clock hours and bills 8 hours on Monday and Tuesday and works 8 clock hours and bills 4 hours on Wednesday through Friday. The minimum amount due the mechanic under the (d)(17) exemption is 40 straight time hours (five 8 hour days) times $15.00 [75 percent of $20.00 is $15.00 or 2 times Alaska minimum wage is $11.30 so that $15.00 is used] or $600 of straight time hours plus 2 hours in excess of 8 hours in a day or 40 in a week figured on a weekly basis times $22.50 (1.5 times $15.00) or $45.00 which yields $645.00. The mechanic's flat rate of pay is 28 (8+8+4+4+4) billable hours times $20.00 or $560.00. Therefore the employee is paid $645.00 of which $45.00 was pay for the 2 overtime hours which includes half-time overtime premium of $15.00. [Tables for Example 1 and Example 2 listing hours, days of the week and dollar amounts were attached to Mr. Allwine's statement. The bracketed [] or parenthesed text () in Mr. Allwine's statement is part of his original text.] Number 0144 MR. ALLWINE said they have, essentially, through the auspices of the committee and Representative Cowdery, the bill sponsor, worked with the DOL at the chairman's direction. He said they have reached what they believe is a reasonable compromise. At the outset they did not feel this was what the automobile dealers or the technicians wanted, but after lengthy discussions and with the help of a number of people, he said they have reached something they believe they can support. He stated, "This bill will remove a restriction that we, as employers are faced to place on our employees. It will permit them to work overtime in such a way that's reasonable, and in the same vein, it will give us an opportunity to not be encumbered with an additional liability that currently the Department of Labor is required to work under. That's kind of it in a nutshell. We do support the committee substitute. My understanding is there is a clarification amendment to go with this substitute that clarifies a couple of technical issues. We also support that." He thanked the bill sponsor, the chairman, and the individuals at DOL and the AFL-CIO who helped them reach this agreement. CHAIRMAN ROKEBERG asked if Mr. Allwine could speak to the amendment, confirming the amendment was technical in nature. MR. ALLWINE agreed that was its nature. Number 0159 ED FLANAGAN, Deputy Commissioner, Department of Labor, came forward to testify. He stated, in brief, "You have before you a [AS] 23.10.060(d)(17) that the Department of Labor can live with." Mr. Flanagan said there has been a lot of work by a lot of people, and the department feels this addresses the need expressed by the industry but still maintains a "floor" and the concept of time and a half after 8 [hours per day] and after 40 [hours per week]. He said the amendment may be "belt and suspenders kind of protection" but it is to make it clear the intention, as was discussed all a long between the parties, is that it's figured on a weekly basis. He said, "Somebody doesn't pick and choose if one day they do better under the flat rate and the next day they do better under the minimum. The minimum owed is figured at the end of the week on a weekly basis against what they earned under the flat rate." Mr. Flanagan said the department appreciated the cooperation of everyone involved, particularly the chairman, the committee and the sponsor, and he stated the department withdrew its objection to the bill as reflected in the proposed committee substitute and the amendment. CHAIRMAN ROKEBERG said, "So briefly then, you gross it up and then you make sure that they've met the minimums, is that how the formula works, or is...?" MR. FLANAGAN said that was correct, stating, "You figure what they get under the flat rate, sir, and then do this calculation as a minimum check." Number 0172 CHAIRMAN ROKEBERG said, "If you put the hours in, it will not be paid less than the minimum base that you've agreed to under the formulation." He asked if that was correct. MR. FLANAGAN stated, "They will not be paid less on a weekly amount figured on the hours worked." CHAIRMAN ROKEBERG asked if there was anyone else who wished to testify on HB 347. There being no one, he stated the public hearing was closed and asked the will of the committee. REPRESENTATIVE HUDSON indicated the committee needed to amend the proposed committee substitute. Number 0176 REPRESENTATIVE RYAN made a motion to adopt Amendment 1, on page 2, line 7. There being no objections, Amendment 1 was adopted. Amendment 1 read: Page 2, Line 7 After "paragraph" replace ";" with "." Delete the remainder of lines 7,8, & 9. Insert new subsection to read: "(E) The minimum amount due the employee under (C) and (D) of this section shall be figured on a weekly basis." Number 0180 REPRESENTATIVE HUDSON made a motion to move the proposed committee substitute for HB 347, Version F, as amended, with individual recommendations and zero fiscal note, asking unanimous consent. There being no objections, CSHB 347(L&C) was moved out of the House Labor and Commerce Standing Committee.
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