Legislature(2023 - 2024)BARNES 124
01/19/2024 03:15 PM House LABOR & COMMERCE
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Audio | Topic |
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Start | |
HB119 | |
HB186 | |
Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
+= | HB 119 | TELECONFERENCED | |
+= | HB 186 | TELECONFERENCED | |
+ | TELECONFERENCED |
HB 186-VOLUNTEER LABOR COMPLIANCE OFFICER PRGM 3:54:37 PM CHAIR SUMNER announced that the final order of business would be HOUSE BILL NO. 186, "An Act relating to volunteer labor compliance officers; and providing for an effective date." CHAIR SUMNER explained that he is a homebuilder, and during his time in the industry he has seen many unfortunate incidents that could potentially be addressed by this type of legislation. In the private construction industry cash pay and misclassification of employees as independent contractors is pretty rampant, and this is something that the legislature should take a look at. 3:55:38 PM SARENA HACKENMILLER, Staff, Representative Jesse Sumner, Alaska State Legislature, introduced HB 186 on behalf of Representative Sumner, prime sponsor. The bill would establish a volunteer labor compliance officer program which would help address some of the difficulties Alaska construction workers face because of wage theft. She stated that the construction industry is a vital part of Alaska's economy. While many employers uphold fair labor practices, there are those who engage in exploitative behaviors that undermine workers' rights and jeopardize their well-being. She recounted a number of ways contractors exploit their workers, avoiding just treatment and affecting worker's compensation. To address this state and national issue, HB 186 proposes the establishment of a volunteer labor compliance officer program. The program would enhance worker protection, promote compliance of Alaska's labor laws, and foster a fair and competitive industry environment. The program will empower more workers with knowledge of their wage-related rights. Trained volunteers will visit worksites and conduct interviews, noting potential violations and encouraging proactive adherence to labor standards. 3:59:31 PM MS. HACKENMILLER presented the sectional analysis for HB 186 [included in the committee packet], which read as follows [original punctuation provided]: HB 186 Volunteer Labor Compliance Officer Program Sectional Analysis Section 1: Adds new Article to AS 23.05 directing the Department of Labor and Workforce Development to create a Volunteer Labor Compliance Officer Program for said volunteers to inspect construction sites in order to document compliance with state labor laws. The Department of Labor and Workplace Development through the Volunteer Labor Compliance Officer Program will ensure the state has a roster of qualified individuals to inspect constructions sites by providing the proper training, safety equipment, granting them the authority to enter a worksite and inspect records outlined in AS 23.05.100. The Department will also outline regulations for volunteers such as ID badges, required safety equipment, as well as specifying the insurance coverage needed by volunteers. Article 6 adds new statues to AS 23.05 outlining powers and duties of the volunteer labor compliance officer. These powers and duties include the ability to access and inspect a construction site on behalf of the department and initiate labor compliance investigation, require volunteers to visibly display the Dept. issued ID card and wear the required safety equipment on site, email a report of the Department visit within 48 hours, document that the officer is covered by workers compensation, and maintain required confidentiality. A volunteer labor compliance is not allowed to be a state employee, issue citations or enforce state labor laws. While conducting the investigation the volunteer is not allowed to wear attire of any other organization other than the department, disparage the employer, organize, or promote or display insignia for any other entity or organization, or preform any type of work outside the scope of the volunteer labor compliance officer while acting the capacity of a volunteer labor compliance officer. Article 6 also adds statues to AS 23.05 outlining to the department the requirements a potential candidate must fill to be a volunteer labor compliance officer, and the ability to permanently revoke a volunteer's badge in certain instances. Section 2: Provides an immediate effective date. 4:02:02 PM REPRESENTATIVE PRAX asked how objectivity and equal treatment could be ensured under the law. MS. HACKENMILLER responded that HB 186 includes a conflict-of- interest provision; however, the regulations will be determined by the Department of Labor and Workforce Development (DLWD), which will find a fair and equitable way to ensure the conflicts of interests are acceptable by the industry. REPRESENTATIVE PRAX requested clarification that the issue would be addressed by regulations. 4:03:05 PM CHAIR SUMNER explained that the legislature shouldn't administer in fine detail, but HB 186 directs DLWD to create regulations to that effect. 4:03:36 PM REPRESENTATIVE SADDLER noted that HB 186 seems to envision deputizing private citizens to enforce state regulations and laws. He asked whether there are other instances in state government where the inspection and applications of regulations and laws are outsourced to private individuals. CHAIR SUMNER gave the example of a tip line for poor drivers and suggested that there are other examples where members of the community would like to help enforce laws especially considering there are not adequate employees or money to cover all areas of the state. He said there are a significant number of rural projects, so it is envisioned that this would allow community members to help with the enforcement of the laws. REPRESENTATIVE SADDLER asked whether the notations of violations would be anonymous. CHAIR SUMNER responded that would be a good question for DLWD as to whether it takes anonymous tips. He said he would provide Representative Saddler's office with a copy of the wage and hour report form. 4:05:44 PM REPRESENTATIVE CARRICK questioned whether there was anything in HB 186 to prevent a volunteer compliance officer from being paid, for example: a competing construction company wants to send its employee to do compliance work with private contractors. She asked if the company would be allowed to do that. CHAIR SUMNER posited that the DLWD would have sideboards in the regulations so that one company could not send its employees to a competitor in an abusive manner. REPRESENTATIVE CARRICK asked what compels the Department of Labor and Workforce Development to set up provisions around the program creation. She commented that there were some gray areas in the language. 4:07:46 PM REPRESENTATIVE RUFFRIDGE explained that he wanted to better understand the qualifications in Section 1 for the compliance officer. In the initial introduction to the bill there was a lot to do with wage theft, but the qualifications in the bill seem more focused on construction experience and safety orientation. He questioned whether the volunteer compliance officers would be doing an accounting of the books or looking at employee paychecks. 4:08:41 PM MS. HACKENMILLER said she could not answer the question at that time but will provide the information to Representative Ruffridge's office. 4:09:12 PM CHAIR SUMNER asked invited testifiers to speak. 4:09:49 PM CHRIS DIAMOND, Representative, Western States Regional Council of Carpenters, began his testimony by defining worker misclassification, human trafficking of laborers, and construction industry tax fraud. He explained that these problems affect the Alaska construction industry. 4:11:35 PM GABE SHADDY FARNSWORTH, Representative, Western States Regional Council of Carpenters, spoke about his background in the construction industry and his personal experiences of wage theft. He cited the Century Foundation which found that 14.6 percent of Alaska construction workers were victims of wage theft or misclassification, which resulted in an estimated $4.7 million dollars in unpaid overtime wages, as well as $23 million in lost tax revenue in 2021. He said this is a major issue in Alaska, and there are not enough resources to enforce existing wage and hours laws in the industry. He stated that HB 186 is a creative and cost-effective approach to maximize state resources, namely, wage and hour investigators, through leveraging voluntary wage and compliance officers. 4:14:18 PM MR. DIAMOND added that there is an economic boom coming to the construction industry in Alaska with the federal Infrastructure Investment and Jobs Act, which is going to be put towards public projects all over Alaska. He explained that the state currently does not have resources to ensure fair treatment of workers; currently Alaska does not have enough contractors or workforce, and outside contractors will come up and potentially use unscrupulous practices. MR. FARNSWORTH said that, in terms of the conflict-of-interest question, HB 186 addresses that issue. He acknowledged that the bill was somewhat sparce in how the department would implement the program. He noted that the bill does contain a provision that the gives the department the ability to terminate the volunteer's badge. MR. DIAMOND commented that the idea is to follow current department rules and regulations on how information can be gathered and how to submit the information to the department. MR. FARNSWORTH pointed out that the fiscal note includes a coordinator between the department and the volunteers, with the department providing oversight. 4:18:48 PM REPRESENTATIVE SADDLER questioned whether the organizations, like the brotherhoods or unions, carry out any of the services that might be performed by the proposed voluntary compliance officers. MR. DIAMOND answered that, as a member of the carpenters union, he has visited union and non-union job sites where workers have reported various issues with wage theft. He said that he cannot file a claim on the worker's behalf, but the worker has to file the claim. He offered scenarios of the challenges workers face in this regard, like not working on the next project if they report problems. REPRESENTATIVE SADDLER asked for clarification regarding whether he or other union representatives could file claims, and if so, how it would work. MR. DIAMOND explained that, as a union representative, he was not able to perform that function, and if a member doesn't want to answer questions, they don't have to. He said that if a contractor asks him to leave, he will leave. He pointed out that this differs from wage and hour investigators whose questions need to be answered because they are protecting public money. 4:20:50 PM REPRESENTATIVE PRAX observed that the focus of the testimony was on public projects. He shared his experience in working for a private company, and there was always a union contractor, and for state projects there would be a project manager. He commented on the difficulty in removing the conflict of interest. He asked whether a project manager could be required for each construction project whose duties would include wage and hour monitoring. MR. FARNSWORTH said he had no problem with having one of a construction company's staff whose job would include checking the work that is performed and ensuring enforcement. REPRESENTATIVE PRAX clarified that the hypothetical staff member would be part of the state's condition of the contract, and that the state be allowed to check whether the company is following wage laws. MR. FARNSWORTH responded that the contractor is required to submit a certified payroll to the Wage and Hour Office. Typically, a wage and hour technician examines the reports and looks for discrepancies. Some of the work requires "boots on the ground" to witness certain types of violations. If there was a requirement in the statute for public projects to have a wage and hour enforcer, that would be a great idea; it would not, however, cover private construction. 4:26:14 PM MR. DIAMOND commented that, in such a case, it should be a state employee rather than someone affiliated with the contractor or company. MR. FARNSWORTH followed up that it is a good idea but would be very expensive. 4:26:57 PM REPRESENTATIVE WRIGHT shared his experience working with Davis Bacon wages and expressed his approval of HB 186. He agreed that having a wage and hour investigator on site all the time would be very expensive. He recalled employer training, documentation that the employees understand their rights, and random compliance visits. 4:28:22 PM REPRESENTATIVE RUFFRIDGE referred to language on page 2, line 9, of HB 186, which addresses the powers and duties of a volunteer compliance officer. He then drew attention to page 3, line 14, describing the compliance officer's qualifications. He said he was not sure that five years of construction experience and the completion of a 10-hour Occupational Safety and Health Administration (OSHA) workshop would qualify someone to perform a relatively detailed check. MR. DIAMOND explained that there would be DLWD training to ensure officers would be following department guidelines. 4:30:20 PM MR. FARNSWORTH pointed out a section in the bill that addressed training by the department. He said that the five-year requirement is needed for them to identify the work that workers are doing. 4:31:31 PM REPRESENTATIVE SADDLER asked Mr. Diamond and Mr. Farnsworth how their organizations view the status of Alaska's enforcement and compliance of labor laws. MR. DIAMOND responded that his organization continually asks for more oversight and enforcement. He said the state of Alaska currently does not have the capacity to check all the job sites for compliance. REPRESENTATIVE SADDLER observed that a person who qualifies as a volunteer compliance officer would be more likely to take a job with wages and benefits. 4:33:05 PM MR. FARNSWORTH explained that there would be some retired construction workers as well as other interested individuals but conceded that it is a point well taken. 4:34:34 PM CHAIR SUMNER announced that HB 186 was held over.