Legislature(2003 - 2004)
05/06/2003 01:35 PM Senate 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
SB 210-WAGE AND HOUR OVERTIME COMPUTATION CHAIR BUNDE announced SB 210 to be up for consideration. MS. JANE ALBERTS, committee aide to the Senate Labor and Commerce Committee, said SB 210 closes a loophole in statute regarding the payment of overtime wages. She explained: In 1999, the legislature passed a law to correct an erroneous court interpretation of a statute that authorized the pyramiding of overtime hours, which is the payment of overtime wages both daily and weekly for the same hour of work. In 1999, at the last minute on the floor the retroactive date in that bill was taken out, which left a loophole for the years 1997 to 1999, thereby leaving employers vulnerable to pyramiding lawsuits. The bill made clear the future claims would be forwarded, but it did not address the two lawsuits filed in 1997 that are still active cases at this time. In those cases, the employers computed the overtime in accordance with the Alaska Department of Labor methodology. The purpose of this bill is to close this loophole, [and to] make clear the interpretation on computing overtime wages under Alaska's Wage and Hour Act that prohibits the use of pyramiding in overtime pay.... COMMISSIONER GREG O'CLARAY, Department of Labor and Workforce Development, said in his 38 years of representing laborers he had never seen an interpretation of the Wage and Hour Act like this particular court's interpretation. He told members: Under the Alaska State law, if you work more than eight hours in a day or 40 hours in a week, you are entitled to overtime and time and a half times the basic straight time rate. If a worker worked 10 hours on Monday and then a series of four-eights, he got two hours of overtime for his two extra hours on Monday and then nothing further for the week, but this particular court interpreted that to mean he got paid for overtime again, because he worked 42 hours in a week - unheard of anywhere in the country that I can see. This particular bill will correct that problem. It will also wipe out the continuing liability of those two companies. The Department of Labor supports the bill, supports the concept of cleaning up this particular misinterpretation of the law.... MR. JOHN SHIVELY, Vice President, Government and Community Relations, Holland America Line, said a lawsuit against Holland America [filed by an employee] prompted this legislation. The case started in a superior court, went to district court, and then back to a superior court, which ruled the employee was entitled to double accounting of his overtime, or pyramiding. Holland America paid the claim because it was only $21, but the plaintiff appealed and it went to the Supreme Court, which remanded it and allowed a class action suit. So, Holland America is potentially faced with millions of dollars in liability if Judge Weeks' decision is found to be correct. A counter decision by Judge Collins found the Wage and Hour Law interpretation to be exactly as Commissioner O'Claray said it should be. MR. SHIVELY said this legislation is retroactive. It puts the finishing touch on a piece of legislation that passed in 1999 that had a retroactive provision that was taken out at the last minute. He thought this is a reasonable bill; legal research had been done on the issue of retroactivity and that is within the purview of the legislature. No constitutional right is being violated and there has been no final judicial decision. CHAIR BUNDE informed members that he also asked Legislative Legal and Research Services counsel to provide an opinion, which says that retroactivity is constitutional. SENATOR FRENCH asked if it is true that there was no decision made on the pyramiding aspect of Judge Weeks' ruling. MR. SHIVELY replied that is correct. SENATOR FRENCH asked if any other state has ruled that pyramiding is the way to calculate overtime. MR. SHIVELY answered that he had not done that kind of research, but the commissioner had indicated that he was unaware of it anywhere. MR. DON ETHERIDGE, AFL-CIO, supported SB 210. The AFL-CIO worked in 1999 to create the current statute and believes that the commissioner's interpretation is correct. SENATOR SEEKINS moved to pass SB 210, Version A, from committee with individual recommendations and attached zero fiscal note. SENATORS FRENCH, DAVIS, STEVENS, SEEKINS and BUNDE voted yea; and SB 210 moved from committee.
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