Legislature(2003 - 2004)
02/05/2004 02:34 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
February 05, 2004
2:34 P.M.
TAPE HFC 04-21, Side A & B
CALL TO ORDER
Co-Chair Williams called the House Finance Committee meeting
to order at 2:34 P.M.
MEMBERS PRESENT
Representative John Harris, Co-Chair
Representative Bill Williams, Co-Chair
Representative Kevin Meyer, Vice-Chair
Representative Hugh Fate
Representative Richard Foster
Representative Mike Hawker
Representative Reggie Joule
Representative Eric Croft
Representative Mike Chenault
Representative Carl Moses
MEMBERS ABSENT
Representative Bill Stoltze
ALSO PRESENT
Representative Norman Rokeberg; Michael Notar, Assistant
Business Manager to IBEW Local 1547, and President, Building
Trades Council, Juneau; Chip Wagoner, Alaska Catholic
Conference; David Ford, Business Manager, Ironworkers Local
751, and Vice President, Anchorage Building Trades Council;
Don Etheridge, AFL/CIO; Pam LaBolle, State Chamber Of
Commerce; Barbara Huft-Tucknes, Director of Affairs,
Teamsters Local 359.
PRESENT VIA TELECONFERENCE
Karen Rogina, Alaska Hospitality Alliance (AHA), Anchorage;
Jon Faulkner, Owner of Lands End Resort, Homer; John Brown,
President, Central Labor Council, Fairbanks; Andrew Hodnik,
Fairbanks; James Akers, Fairbanks; David Ford, Ironworkers
Local 751, Vice President, Anchorage Building Trades
Council; Jay Quakenbush, Business Representative, IBEW
Fairbanks; Gary Niese, Fairbanks; Steve Joswiak, Union
Representative for United Food Commercial Workers Union,
Fairbanks; John Brown, Fred Meyer Employee, Fairbanks; Jack
Amon, Part Owner of Marx Brothers Cafe, Past Chair of Alaska
Restaurant and Beverage Association, Anchorage; Kevin
Batters, General Manager, Anchorage Hilton, Anchorage; John
M. Johnson, Retired Construction Worker, Fairbanks.
SUMMARY
HB 255 An Act amending the Alaska Wage and Hour Act as it
relates to flexible work hour plans, the provision
of training wages, and the definitions of certain
terms; and repealing the exemption in the Act from
the payment of minimum wages for learners.
HB 255 was heard and HELD in Committee for further
consideration.
HOUSE BILL 255
Co-Chair Williams provided the Committee with Work Draft,
23-LS0827, Version U, on behalf of Representative Rokeberg.
REPRESENTATIVE NORM ROKEBERG briefly outlined the three
provisions of Version U relating to the Alaska Wage and Hour
Act.
Section I refers to definitions and to current regulations
regarding the "80-20 Rule" and the provision for executive
salaries at 2.5 times the minimum wage for the first 40
hours. It is the sponsor's intention to conform these
definitions to the federal law and the new federal
regulations that will go into effect in March 2004. He
explained that this would repeal the "80-20" rule, which
currently means that if an employee is working as a manager
and is not eligible for overtime pay, the employee can't do
20% of an hourly employee's work. Representative Rokeberg
asserted that it is an extremely restrictive provision and
damaging to state commerce.
The Department of Labor regulations enacted several years
ago set a manager's minimum compensation at 2.5 times the
minimum wage. Representative Rokeberg explained that since
the minimum wage law has risen substantially, 2.5 times the
minimum wage would currently total $17.88 per hour.
Vice-Chair Meyer MOVED to ADOPT Work Draft, 23-LS0827,
Version U. There being NO OBJECTION, it was so ordered.
Representative Rokeberg discussed Section 3, page 3, line 17
of Version U. He explained that the language modifies the
flexible time provisions currently restricted to 10 hours
per day in a 40-hour period. The committee substitute would
change the flexible schedule to a two-week, 80-hour schedule
to provide more flex-time for working mothers. He stated
that it would accommodate the changing requirements and
patterns of the workforce.
Representative Rokeberg suggested an additional change to
the bill that would address current law that requires an
employee and employer to submit flex-time changes to the
Department of Labor for review. He said that often the
department does not approve these changes.
Section 4 of Version U would create a new section in
existing law that addresses the training wage provision.
Representative Rokeberg clarified that it would change the
period to 30 days from the 90-day period in the original
bill.
KAREN ROGINA, ALASKA HOSPITALITY ALLIANCE (AHA), VIA
TELECONFERENCE, ANCHORAGE, spoke in support of HB 255,
stating that the AHA believes all three provisions benefit
both the employer and the employee. The AHA is the principal
employer of entry-level workers.
JON FAULKNER, OWNER and MANAGER of LANDS END RESORT, VIA
TELECONFERENCE, HOMER, spoke in favor of the bill, which
impacts his small business. He believes that flex-time is
demanded by the modern workforce. He asserted that the
definition of "supervisor" must be changed because the
present definition lacks clarity, and currently in
litigation the burden is on the employer to prove that a
supervisor doesn't spend more than 20% of his time on "line
work."
JOHN BROWN, PRESIDENT of the CENTRAL LABOR COUNCIL,
FAIRBANKS, VIA TELECONFERENCE, FAIRBANKS stated that the
Council is opposed to HB 255. He explained that although
employers are unhappy with current regulations, the statute
has been in place for years and he could see no advantage to
the proposed changes which would lower the wages of
employees. He expressed doubt that 12-hour days would
provide flex-time, or that employees would want to work 12
hours a day without receiving overtime pay.
MICHAEL NOTAR, ASSISTANT BUSINESS MANAGER TO IBEW Local
1547, and PRESIDENT, BUILDING TRADES COUNCIL, JUNEAU, spoke
on behalf of about 5,000 people who are paid an hourly wage.
He stated the IBEW's strong opposition to the proposed
changes to the state wage and hour law "that would return
th
workers to pre-20 Century standards and would undo nearly
one hundred years of progressive reform." He explained that
the provision exists in state law to allow workers to
develop a bona fide voluntary flex plan within a collective
bargaining agreement. The employee is shielded from employer
coercion through the collective bargaining process. He
stated that the issue in this legislation is employer
benefit.
ANDREW HODNIK, VIA TELECONFERENCE, FAIRBANKS, referred to
Section 4, stating that he is a veteran and should not be
penalized for serving his country. He believes that anyone
over the age of 18 should be paid a fair wage, whether in
training or not.
CHIP WAGONER, ALASKA CATHOLIC CONFERENCE, JUNEAU, voiced
opposition to the training wage, which would reduce the
minimum wage by $2.00 for 30 days for newly hired workers
under 20. He stated that this represents a 28% reduction,
and it counters the public policy of the legislature, which
set the minimum wage at $7.15. Many young people have only
90 days during the summer months to earn money for the year,
and thirty days are not needed to train people in entry
level or fast food industry jobs. The training wage issue
affects those who can least afford it and cannot do anything
about it, including minorities and those with disabilities.
JAMES AKERS, VIA TELECONFERENCE, FAIRBANKS, stated that he
is a Viet Nam combat veteran and he expressed opposition to
the proposed changes in the bill.
DAVID FORD, BUSINESS MANAGER, IRONWORKERS UNION, and VICE
PRESIDENT, ANCHORAGE BUILDING TRADES COUNCIL, stated that
the proposed changes are detrimental to the employee and to
the Alaskan economy. Flex-time work weeks are not a benefit
to the employee. Mr. Ford referred to page 4, line 18,
stating that voluntary agreements between an employer and
employee do not occur. Time off for family matters is also
not a reality in the building industry. The provisions of
the bill would allow an employer to coerce a worker. He
concluded that young people would have to leave during the
summer to find work, because $5.15 per hour in Alaska is not
a fair wage for kids, or for any worker.
JAY QUAKENBUSH, BUSINESS REPRESENTATIVE FOR IBEW, VIA
TELECONFERENCE, FAIRBANKS, discussed young people who want
to remain in Alaska to earn a living, and who come up
through the ranks before they enter a career. He voiced
opposition to employees aged 16- 20 working for less than
the minimum wage when being trained. Mr. Quakenbush asserted
that this legislation will hurt Alaska's economy because
workers will leave.
GARY NIESE, REPRESENTING SELF, VIA TELECONFERENCE,
FAIRBANKS, spoke as an hourly worker opposed to the bill
because it does not benefit hourly workers. He questioned
how a single mother could afford daycare during a 12-hour
shift at straight-time pay.
STEVE JOSWIAK, REPRESENTATIVE FOR UNITED FOOD COMMERCIAL
WORKERS UNION, VIA TELECONFERENCE, FAIRBANKS stated that he
represents working mothers and kids aged 14-19. He did not
know of one mother who would benefit from the proposed flex
work plan, and he voiced opposition to the training wage.
TAPE HFC 04 - 21, Side B
JOHN BROWN, EMPLOYEE of FRED MEYER NORTH, VIA
TELECONFERENCE, FAIRBANKS stated he's been employed for 3
weeks at Fred Meyer and the training period was adequate for
mastery of the tasks. He feels this bill would not help
anyone but employers.
DON ETHERIDGE, AFL & CIO, brought up the "80-20 rule" and
stated that a supervisor could occasionally cover for an
hourly employee who doesn't show up for a shift, without
being fined. Mr.Etheridge expressed the AFL & CIO's "total
opposition" to the bill.
Representative Rokeberg asked if the Alaska Wage and Hour
Act, including the flexible work plan provisions, affect
organized labor, which is covered by collective bargaining
contracts to negotiate work conditions. Mr. Etheridge
responded "no," that organized labor has collective
bargaining contracts. He stated that under the Collective
Bargaining Act, the employee isn't threatened with being
fired if he refuses a flex work week.
PAM LABOLLE, STATE CHAMBER OF COMMERCE, stated that the bill
is very important to the employers in the state. The
training wage is a break for kids without any previous work
experience. She discussed the definition of salaried
worker, and the benefit of a salaried worker being able to
negotiating a package. She discussed her personal experience
with flex-time, which was positive. Ms. LaBolle believes
that the legislation would be beneficial to both the
employee and the employer.
JACK AMON, PART OWNER of MARX BROTHERS CAFÉ and CATERING,
PAST CHAIR OF ALASKA RESTAURANT AND BEVERAGE ASSOCIATION,
VIA TELECONFERENCE, ANCHORAGE spoke in support of HB 255.
He stated that the bill would correct the unintended
consequences of the minimum wage increase. Changing the
definition of supervisor to fit the rules of the workplace
would benefit both the employee and the employer. Mr. Amon
stated the flex plan would benefit the employee, and he was
in favor of the training wage because apprenticeships would
not be possible at a higher wage. The high turnover rate of
young people makes it difficult for an employer to start
them at a higher wage.
BARBARA HUFT-TUCKNES, DIRECTOR OF LEGISLATIVE AFFAIRS,
TEAMSTERS LOCAL 959, stated that the Federal Labor Standards
Act directly affects her public employees under collective
bargaining agreements. Those employees will look at laws on
the federal, state, and local levels with Teamsters as the
bargaining unit. Without the opportunity to assess the
impact on employees, she predicts a continuing controversy
over adoption of the federal regulations on definitions. She
asked that the section on employees in protected categories
be removed. She described a situation where an employee was
given flex-time but her total hours were reduced and her
days off were not consecutive. She voiced opposition to
Section 2 because the flex schedule would be used by
employers on unprotected, unrepresented employees to reduce
their overtime costs.
Representative Hawker brought up the current law of 40 hours
per week and not more than 10 hours per day. He asked,
would not a flex-time agreement become invalid if the work
schedule was reduced to fewer than 40 hours per week. Mrs.
Huft-Tucknes replied yes, that it would, but in the case she
described above the employee did not report the violation to
the Department of Labor.
Representative Rokeberg interjected that under the current
law the Department of Labor has oversight, which would
continue under his proposed change.
Ms. Huft-Tucknes concluded by voicing concern over the
potential inequities of the training wage.
KEVIN BATTERS, GENERAL MANAGER, ANCHORAGE HILTON, VIA
TELECONFERENCE, ANCHORAGE spoke in support of protecting the
individual and the hourly employee. He stated that the 80-20
rule has caused confusion for hotels and food and beverage
outlets. He suggested eliminating the exempt supervisory
management position and creating the hourly position in
order to avoid litigation.
JOHN M. JOHNSON, RETIRED CONSTRUCTION WORKER, VIA
TELECONFERENCE, FAIRBANKS, stated that an 8-10 hour work day
without overtime is a step backwards in the workplace. He
said that it is unfair.
HB 255 was heard and HELD in Committee for further
consideration
ADJOURNMENT
The meeting was adjourned at 4:03 P.M.
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