Legislature(2003 - 2004)

05/06/2003 01:35 PM Senate L&C

Audio Topic
* first hearing in first committee of referral
+ 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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