Legislature(2013 - 2014)BARNES 124

02/12/2014 03:15 PM House LABOR & COMMERCE


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03:26:14 PM Start
03:26:31 PM Overview: Department of Labor & Workforce Development by Commissioner Dianne Blumer
04:27:29 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Overview: Dept. of Labor & Workforce Development TELECONFERENCED
by Commissioner Dianne Blumer
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                       February 12, 2014                                                                                        
                           3:26 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Kurt Olson, Chair                                                                                                
Representative Mike Chenault                                                                                                    
Representative Bob Herron                                                                                                       
Representative Dan Saddler                                                                                                      
Representative Andy Josephson                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Lora Reinbold, Vice Chair                                                                                        
Representative Charisse Millett                                                                                                 
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
OVERVIEW:  DEPARTMENT OF LABOR & WORKFORCE DEVELOPMENT BY                                                                       
COMMISSIONER DIANNE BLUMER                                                                                                      
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
DIANNE BLUMER, Commissioner                                                                                                     
Department of Labor & Workforce Development (DLWD)                                                                              
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the Department of Labor &                                                               
Workforce Development overview.                                                                                                 
                                                                                                                                
JAMES HARVEY, Director                                                                                                          
Central Office                                                                                                                  
Division of Employment Security                                                                                                 
Department of Labor & Workforce Development                                                                                     
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the overview of the                                                                     
Department of Labor & Workforce Development.                                                                                    
                                                                                                                                
FRED ESPOSITO, Director                                                                                                         
Division of AVTEC - Alaska's Institute of Technology (AVTEC)                                                                    
Department of Labor & Workforce Development                                                                                     
Seward, Alaska                                                                                                                  
POSITION  STATEMENT:    Testified  during  the  overview  of  the                                                             
Department of Labor & Workforce Development.                                                                                    
                                                                                                                                
WANETTA AYERS, Director                                                                                                         
Division of Business Partnership                                                                                                
Department of Labor & Workforce Development                                                                                     
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    Testified  during  the  overview  of  the                                                             
Department of Labor & Workforce Development.                                                                                    
                                                                                                                                
NANCY DAHLSTROM, Director                                                                                                       
Alaska Workforce Investment Board (AWIB)                                                                                        
Department of Labor & Workforce Development                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified and  answered questions during the                                                             
overview  of  the Department  of  Labor  & Workforce  Development                                                               
(DLWD).                                                                                                                         
                                                                                                                                
GREY MITCHELL, Acting Assistant Commissioner;                                                                                   
Director, Division of Labor Standards & Safety                                                                                  
Department of Labor & Workforce Development                                                                                     
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    Testified  during  the  overview  of  the                                                             
Department of Labor & Workforce Development.                                                                                    
                                                                                                                                
CHERYL WALSH, Director                                                                                                          
Statewide Programs                                                                                                              
Division of Vocational Rehabilitation                                                                                           
Department of Labor & Workforce Development                                                                                     
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    Testified  during  the  overview  of  the                                                             
Department of Labor & Workforce Development.                                                                                    
                                                                                                                                
MIKE MONAGLE, Director                                                                                                          
Central Office                                                                                                                  
Division of Workers' Compensation                                                                                               
Department of Labor & Workforce Development                                                                                     
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during  the overview of Department                                                             
of Labor & Workforce Development.                                                                                               
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:26:14 PM                                                                                                                    
                                                                                                                                
CHAIR KURT  OLSON called  the House  Labor and  Commerce Standing                                                             
Committee  meeting  to  order  at   3:26  p.m.    Representatives                                                               
Josephson, Herron,  Saddler, and Olson  were present at  the call                                                               
to order.  Representative Chenault  arrived as the meeting was in                                                               
progress.                                                                                                                       
                                                                                                                                
^Overview:    Department  of Labor  &  Workforce  Development  by                                                               
Commissioner Dianne Blumer                                                                                                      
   Overview:  Department of Labor & Workforce Development by                                                                
                   Commissioner Dianne Blumer                                                                               
                                                                                                                              
3:26:31 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  announced that the  only order of business  would be                                                               
an  Overview:   Department of  Labor &  Workforce Development  by                                                               
Commissioner Dianne Blumer.                                                                                                     
                                                                                                                                
3:26:44 PM                                                                                                                    
                                                                                                                                
DIANNE  BLUMER, Commissioner,  Department  of  Labor &  Workforce                                                               
Development (DLWD), began her presentation.   She stated that the                                                               
DLWD's mission  is to provide  safe and legal  working conditions                                                               
to  advance  the  opportunity for  employment.    The  department                                                               
primarily  provides  three  core   services:    protects  Alaskan                                                               
workers,  provides  income  replacement, and  oversees  workforce                                                               
development.                                                                                                                    
                                                                                                                                
3:29:06 PM                                                                                                                    
                                                                                                                                
COMMISSIONER   BLUMER    briefly   reviewed    the   department's                                                               
organization chart [slide  2].  The dark blue areas  on the chart                                                               
represent  the areas  that provide  departmental oversight  - the                                                               
commissioner's office and administration  services division.  The                                                               
light  blue areas  on the  chart represent  workforce development                                                               
functions.  The Division of  Business Partnerships reaches out to                                                               
businesses  and  industry to  provide  assistance  in design  and                                                               
implementation of training and workforce  development plans.  The                                                               
Employment  Security Division  has two  components, [Unemployment                                                               
Insurance  and Workers'  Compensation  Division]  and provides  a                                                               
public  labor exchange.   The  Alaska Workforce  Investment Board                                                               
provides policy  oversight of state  and federal funded  jobs and                                                               
job  training.   The  Alaska Vocational  Technical  Center is  an                                                               
adult  vocational  training school  in  Seward.   The  Vocational                                                               
Rehabilitation   Division  provides   two   components  of   core                                                               
services, including workforce development  in which staff assists                                                               
individuals with disabilities to  enter the workforce.  Referring                                                               
to  the  brown boxes  on  the  chart,  she identified  the  Labor                                                               
Standards  and  Safety Division  as  the  division that  provides                                                               
enforcement and  training, and monitors labor  laws, occupational                                                               
safety,  and   health.    The   Alaska  Labor   Relations  Agency                                                               
administers  the  Public Employment  Relations  Act.   The  green                                                               
areas on  the chart  relate to income  replacement for  those not                                                               
able  to  work.    The   Employment  Security  Division  oversees                                                               
unemployment  insurance and  the  Workers' Compensation  Division                                                               
administers the state's Workers' Compensation Act, she said.                                                                    
                                                                                                                                
3:31:23 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  thanked Mike  Monagle, Director  of the  Division of                                                               
Workers'  Compensation,  who  has   been  extremely  helpful  and                                                               
responsive to constituents in his district.                                                                                     
                                                                                                                                
COMMISSIONER   BLUMER    pointed   out   that    the   disability                                                               
determination   is  the   other  component   of  the   Vocational                                                               
Rehabilitation Division.                                                                                                        
                                                                                                                                
3:31:56 PM                                                                                                                    
                                                                                                                                
COMMISSIONER  BLUMER, referring  to  a map,  reviewed the  DLWD's                                                               
services by  location [slide 3].   The red dots represent  the 21                                                               
job service  centers, of  which 3 are  located in  Anchorage, the                                                               
blue   areas   represent    vocational   rehabilitation   service                                                               
locations,  and  the  green  dots  represent  all  other  program                                                               
service locations  such as  worker protection  and administrative                                                               
services.   The AVTEC has two  locations - one located  in Seward                                                               
and the other in Anchorage.                                                                                                     
                                                                                                                                
3:32:40 PM                                                                                                                    
                                                                                                                                
COMMISSIONER  BLUMER  said  the  Alaska  Labor  Relations  Agency                                                               
highlights two items [slide 4].   The agency provided training at                                                               
no cost  to the state for  a summer law intern  program through a                                                               
"Study  Law in  Alaska" program  sponsored by  the University  of                                                               
Alaska Anchorage (UAA) and the  Seattle University School of Law.                                                               
The agency  has worked to  resolve more cases  through resolution                                                               
without  using a  formal hearing  process,  which saves  everyone                                                               
time and money, she said.                                                                                                       
                                                                                                                                
3:33:23 PM                                                                                                                    
                                                                                                                                
COMMISSIONER  BLUMER said  Nancy Dahlstrom  is the  new executive                                                               
director of  the Alaska Workforce  Investment Board (AWIB).   She                                                               
highlighted  three accomplishments.   First,  the AWIB  completed                                                               
two  job center  certifications  required  for federal  Workforce                                                               
Investment  funding, which  ensures  universal standards  through                                                               
the "one-stop" centers. Second,  the AWIB participated heavily in                                                               
revision of  the oil and gas  plan with the Division  of Business                                                               
Partnerships and industry.   She explained the  plan updates what                                                               
was formerly known as the AGIA  plan.  She related the department                                                               
is rolling out a  new plan that is more in  line with the current                                                               
proposed gasline.   Third, the  AWIB has conducted  more outreach                                                               
emphasizing  it is  not possible  to  have workforce  development                                                               
without  industry  input.    The  department  took  the  AWIB  to                                                               
targeted  communities that  appeared  to  struggle with  economic                                                               
development and  workforce development.   For example,  the board                                                               
went  to  the  Kenai  and   Ketchikan  and  invited  industry  to                                                               
participate  in  panel  discussions.     Across  the  board,  the                                                               
department heard employers indicate the  need for soft skills for                                                               
youth,  which  "boils  down  to" work  ethics.    The  department                                                               
identified  areas   of  importance,  including  how   to  pass  a                                                               
background check, hold a driver's  license, pass a drug test, and                                                               
job punctuality.  Thus, the AWIB  has been focused on how to make                                                               
a difference.   She recapped  that the board has  been conducting                                                               
outreach that will reap benefits in the next few years.                                                                         
                                                                                                                                
3:36:04 PM                                                                                                                    
                                                                                                                                
COMMISSIONER BLUMER  stated that the Alaska  Vocational Technical                                                               
Center  (AVTEC)  has  new  dorms.    She  indicated  the  AVTEC's                                                               
director will review its accomplishments,  Ms. Ayers will discuss                                                               
the Business Partnerships,  and the new director  of the Division                                                               
of  Employment Security  will highlight  the Employment  Security                                                               
Division.                                                                                                                       
                                                                                                                                
3:38:08 PM                                                                                                                    
                                                                                                                                
JAMES HARVEY,  Director, Central  Office, Division  of Employment                                                               
Security,  Department of  Labor &  Workforce Development  (DLWD),                                                               
reviewed the  division's accomplishments.  The  division recorded                                                               
a 22  percent lower unemployment  insurance rate for  2014, which                                                               
was essentially the  result of passage of HB 76  last year.  This                                                               
allowed the  solvency tax  adjustment to  fall to  the calculated                                                               
difference  rather  than  just three-tenths.    The  unemployment                                                               
insurance  program  exceeded all  of  the  federal UI  management                                                               
acceptable level  of performance goals  for core measures.   This                                                               
means that the  division is doing its job well.   He related that                                                               
from July 1 until the  current time, the division has experienced                                                               
over 150,406 job center visits  exceeding the number of visits in                                                               
2013.    In response  to  a  question,  he clarified  that  these                                                               
figures  pertain  to  physical  visits   to  the  23  job  center                                                               
locations statewide.                                                                                                            
                                                                                                                                
MR.  HARVEY stated  that  in  FY 13  the  division had  1,840,000                                                               
visits to  the online labor  exchange.  He emphasized  that since                                                               
July  1,  2013, the  division  helped  1,635 general  educational                                                               
development (GED)  students graduate,  which exceeds  last year's                                                               
figures of  1,600 graduates.   He surmised  this has been  due to                                                               
changes made to the GED test.                                                                                                   
                                                                                                                                
CHAIR OLSON remarked that these are significant accomplishments.                                                                
                                                                                                                                
3:41:05 PM                                                                                                                    
                                                                                                                                
FRED ESPOSITO,  Director, Division of AVTEC  - Alaska's Institute                                                               
of  Technology,  Department  of Labor  &  Workforce  Development,                                                               
stated that AVTEC  has had a long history  of providing workforce                                                               
development  and training  in  Alaska.   He  reported that  AVTEC                                                               
graduated 366  students in long-term  programs and 758  in short-                                                               
term  programs in  FY 13.   He  said the  AVTEC is  proud of  its                                                               
graduation rates,  including its  87 percent completion  rate and                                                               
92 percent  training-related job  placement rate for  FY 12.   He                                                               
pointed out  that the AVTEC  follows its students one  year after                                                               
graduation and reports these statistics.   The dorm, which opened                                                               
to students January 4, 2014, was  completed on time and on budget                                                               
this year.                                                                                                                      
                                                                                                                                
MR. ESPOSITO  related that the  AVTEC's Alaska  Maritime Training                                                               
Center implemented  the first-ever U.S. Coast  Guard approved ice                                                               
navigation course.   He  emphasized that this  has put  the AVTEC                                                               
maritime  program   on  an  international  status   of  providing                                                               
training to meet the  International Maritime Organization's (IMO)                                                               
Polar Code, necessary for artic  work.  The AVTEC's programs have                                                               
been  embraced by  industry, particularly,  with  respect to  the                                                               
maritime field.   The AVTEC  uses up to date  maritime technology                                                               
and understands  regulations and innovations  used on ships.   He                                                               
outlined a few maritime contract  programs including working with                                                               
ConocoPhillips Alaska, Inc. polar  tankers, Norton Sound Economic                                                               
Development Corporation  and others to provide  contract training                                                               
to  specifically  meet  industry  needs.   He  characterized  the                                                               
AVTEC's  maritime  programs  as   being  "area  specific,  vessel                                                               
specific, and  company specific."   In FY  13, the  AVTEC enjoyed                                                               
partner and corporate support of more than $350,000.                                                                            
                                                                                                                                
3:44:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON  referred  to  the  92  percent  training-                                                               
related job placement  rate and asked about  the one-year follow-                                                               
up figures.                                                                                                                     
                                                                                                                                
MR. ESPOSITO  clarified that in  FY 12, the AVTEC  experienced an                                                               
87 percent program completion and 92 percent employment.                                                                        
                                                                                                                                
3:45:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER  asked  for the  measurable  analysis  on                                                               
whether the new dorms improve retention or graduation rates.                                                                    
                                                                                                                                
MR.  ESPOSITO  responded that  the  new  dorm replaced  an  aging                                                               
facility.    He  anticipated  more students  will  be  living  on                                                               
campuses and  will have  a better experience,  which may  lead to                                                               
improved  completion rates.   Further,  the AVTEC  hopes the  new                                                               
dorm will increase enrollment by attracting more students.                                                                      
                                                                                                                                
3:47:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   SADDLER   asked   whether   students   pay   for                                                               
residential costs.                                                                                                              
                                                                                                                                
MR.  ESPOSITO answered  yes.    He said  the  AVTEC's program  is                                                               
funded the same way as for any other college campus.                                                                            
                                                                                                                                
3:47:45 PM                                                                                                                    
                                                                                                                                
WANETTA  AYERS,  Director,   Division  of  Business  Partnership,                                                               
Department  of Labor  & Workforce  Development,  stated that  the                                                               
Division of Business Partnership's role  is to manage the state's                                                               
investments in  workforce development  [slide 7].   In FY  13 the                                                               
division's  efforts  resulted  in  training  over  5,500  Alaskan                                                               
workers and  the delivery of  career awareness, guidance  or work                                                               
experience  to 21,000  students.   The division  has listened  to                                                               
employers,  training  providers,  and   other  grantees  and  has                                                               
rebuilt its  grant making process.   This allows the  division to                                                               
operate a combined solicitation  for its competitive grant, which                                                               
is  currently "on  the street."    This will  enable awardees  to                                                               
develop their  programs and optimize  grant funds.   Finally, the                                                               
division  has been  working  with  the oil  and  gas industry  on                                                               
development of workforce development  plan, which she hoped would                                                               
be finalized the next 30 to 35  days.  In response to a question,                                                               
she deferred to  Mr. Harvey to answer efforts  the department has                                                               
been taking  with the  announcement of  the Flint  Hills refinery                                                               
closure.                                                                                                                        
                                                                                                                                
3:50:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON,   referring  to  slide  5,   which  read,                                                               
"Completed  2  job  center certifications  required  for  federal                                                               
Workforce Investment  Act funding."   He asked whether  the state                                                               
needs to certify more job centers.                                                                                              
                                                                                                                                
NANCY  DAHLSTROM,  Director,  Alaska Workforce  Investment  Board                                                               
(AWIB),  Department of  Labor &  Workforce Development,  answered                                                               
that  every job  center  is  certified in  a  timely  basis.   At                                                               
present the department is current on certifications.                                                                            
                                                                                                                                
3:50:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON  asked  whether  the  AWIB  is  regionally                                                               
balanced.                                                                                                                       
                                                                                                                                
MS. DAHLSTROM  answered that  currently the  board does  not have                                                               
representation  from  Bethel.   She  acknowledged  that as  seats                                                               
become open  that the  department has  worked to  ensure adequate                                                               
representation from all  areas of the state.  She  said the board                                                               
is interested in  having someone from the Bethel  region apply to                                                               
serve on the board.                                                                                                             
                                                                                                                                
REPRESENTATIVE  HERRON pointed  out he  also represents  Unalaska                                                               
and asked whether anyone from the Aleutians serves on the AWIB.                                                                 
                                                                                                                                
MS. DAHLSTROM answered no.                                                                                                      
                                                                                                                                
3:52:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON asked  whether  the  administration has  a                                                               
current   position  on   the  allocation   of  Alaska   Technical                                                               
Vocational Education Program grant fund dollars.                                                                                
                                                                                                                                
MS. DAHLSTROM  answered that  AVTEC has applied  for some  of the                                                               
grant  funds so  she couldn't  comment  on the  allocation.   She                                                               
hoped  the   information  AVTEC   has  provided  will   help  the                                                               
legislature determine fund allocation.                                                                                          
                                                                                                                                
REPRESENTATIVE HERRON suggested that  it might mean that entities                                                               
get "a smaller slice of the pie."                                                                                               
                                                                                                                                
3:53:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON  asked how the department  defines success,                                                               
noting that some entities do well and others under perform.                                                                     
                                                                                                                                
MS.  DAHLSTRON   answered  that  AWIB  has   been  reviewing  the                                                               
definitions  and is  working with  Ms. Ayer's  group to  ensure a                                                               
means exists to  measure performance.  For  example, not everyone                                                               
has  access  to  the  same  centers or  facilities  so  it  isn't                                                               
possible to do a straight rating across the board, she said.                                                                    
                                                                                                                                
3:54:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER  noticed [on slide 5],  that AWIB assisted                                                               
in revising  the oil and  gas plan.  He  asked for any  trends or                                                               
directions in employment in the oil and gas industry.                                                                           
                                                                                                                                
MS.  DAHLSTROM said  she does  not  have information  on any  new                                                               
directions  but  she recalled  Ms.  Ayers  mentioning the  report                                                               
should be ready in 30 to 35 days.                                                                                               
                                                                                                                                
3:56:20 PM                                                                                                                    
                                                                                                                                
MR. HARVEY stated that the  division has dedicated staff response                                                               
specialists,  similar   to  the  ones  who   assisted  the  Kenai                                                               
Peninsula area when  Agrium, Inc. closed its plant.   He reported                                                               
that the  division's staff  has reached  out specifically  to the                                                               
Flint Hills refinery  in an effort to inform  employees about the                                                               
services  the job  center provides  with respect  to unemployment                                                               
insurance and hoped it would coincide with the warning notices.                                                                 
                                                                                                                                
CHAIR OLSON  lauded the Division of  Employment Security's staff.                                                               
He said he  was extremely grateful for  the division's assistance                                                               
on the Kenai Peninsula with the Agrium plant closure.                                                                           
                                                                                                                                
COMMISSIONER  BLUMER added  that the  administration has  reached                                                               
out to work  with the [Alaska Support] Industry  Alliance and the                                                               
Resource Development  Council to assist  those who may  be facing                                                               
layoffs.                                                                                                                        
                                                                                                                                
3:57:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON asked for further clarification.                                                                       
                                                                                                                                
MR. HARVEY  answered that employers  with more than  15 employees                                                               
must  file a  warning  notice  within 60  days  in  advance of  a                                                               
layoff.                                                                                                                         
                                                                                                                                
3:58:16 PM                                                                                                                    
                                                                                                                                
COMMISSIONER BLUMER, in response  to a question by Representative                                                               
Herron,  stated that  the department  welcomes applications  from                                                               
his region and that she  has been seeking applicants from Bethel,                                                               
Barrow, and Unalaska.                                                                                                           
                                                                                                                                
REPRESENTATIVE HERRON  offered to advise the  Aleutian region and                                                               
the Yukon-Kuskokwim Delta area.                                                                                                 
                                                                                                                                
3:59:11 PM                                                                                                                    
                                                                                                                                
GREY MITCHELL, Acting  Assistant Commissioner, Director, Division                                                               
of Labor  Standards & Safety,  DLWD, highlighted  the components,                                                               
noting  that  the  wage and  hour  administrative  staff  handles                                                               
enforcement  of all  the  wage and  hour laws.    This group  has                                                               
focused  effort on  employers, noting  that staff  conducted over                                                               
12,000 employer briefings.  He  said the briefings help employers                                                               
understand the  laws since  most employers want  to do  the right                                                               
thing,  but  laws  can  be  confusing.    The  division  takes  a                                                               
proactive  effort  to ensure  that  employers  are aware  of  the                                                               
rules.    The department  notices  the  correlation between  this                                                               
effort and the reduction in the number of wage claims filed.                                                                    
                                                                                                                                
4:00:29 PM                                                                                                                    
                                                                                                                                
MR.  MITCHELL stated  that  the  mechanical inspection  component                                                               
inspected   over  5,000   boilers,  557   elevators,  and   1,577                                                               
electrical/plumbing  inspections.    One   outcome  has  been  to                                                               
achieve the goal of 90 percent  timeliness.  He reported that the                                                               
division  increased worksite  inspections, performing  15 percent                                                               
more inspections, with 60 percent  resulting in consultations and                                                               
40 percent enforcement  actions, typically due to  an accident or                                                               
a complaint.  He emphasized  significant results last year in the                                                               
occupational safety  and health category.   The division observed                                                               
a  7 percent  reduction  in  the overall  "lost  time and  injury                                                               
rate,"  which is  the second  lowest rate  ever experienced.   He                                                               
reported   that   in   two    focus   areas,   construction   and                                                               
transportation  warehousing, that  the rates  dropped 24  percent                                                               
and 17 percent, respectively.                                                                                                   
                                                                                                                                
4:02:28 PM                                                                                                                    
                                                                                                                                
MR.  MITCHELL  stated  that  the  Governor's  Safety  and  Health                                                               
Conference  is scheduled  on March  4-6  at Anchorage's  Dena'ina                                                               
Center.   He welcomed legislators  attending or dropping by.   He                                                               
explained  that  the conference  is  a  tremendous outpouring  of                                                               
educational information.   The youth outreach  effort is "growing                                                               
exponentially."   The  division has  been working  with the  King                                                               
Career Center to expose youth  to occupational safety and health.                                                               
This year  West High  School has  joined the  effort and  will be                                                               
busing students  from throughout  the Anchorage  School District.                                                               
He anticipated  that approximately  2,000 students will  be given                                                               
seminars in workplace safety and health awareness.                                                                              
                                                                                                                                
4:03:53 PM                                                                                                                    
                                                                                                                                
COMMISSIONER   BLUMER  reviewed   the   Division  of   Vocational                                                               
Rehabilitation highlights.   The DVR's counselors  are trained to                                                               
address the unique employment barriers  faced by individuals with                                                               
disabilities  and  conviction histories.    The  department as  a                                                               
whole   has  been   working  closely   with  the   Department  of                                                               
Corrections   for  recidivism   reduction.     Consequently   the                                                               
department has been focused on  assisting those released into the                                                               
communities overcome barriers and become employed.                                                                              
                                                                                                                                
CHAIR OLSON  asked whether the  program has been in  existence to                                                               
give any figures.                                                                                                               
                                                                                                                                
COMMISSIONER BLUMER answered that  20.8 percent of the population                                                               
has been served.  After  consulting with staff, she answered that                                                               
21 percent of the case load have prior convictions.                                                                             
                                                                                                                                
4:05:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON  recalled the  Bethel region  faces similar                                                               
issues in tribal  health.  He compared a teen  with a shoplifting                                                               
conviction  to more  serious  convictions of  crimes.   He  asked                                                               
whether the legislature should revisit barrier crimes.                                                                          
                                                                                                                                
COMMISSIONER BLUMER  answered that  the Criminal  Justice Working                                                               
Group  is  currently considering  this  and  has identified  many                                                               
barrier crimes,  not only in  Alaska, but nationally.   The group                                                               
has been  interested in ensuring that  a nexus is applied  to the                                                               
barrier.                                                                                                                        
                                                                                                                                
4:06:57 PM                                                                                                                    
                                                                                                                                
CHERYL   WALSH,  Director,   Statewide   Programs,  Division   of                                                               
Vocational Rehabilitation,  DLWD, stated  the division  has found                                                               
an  increasing  number  of people  have  misdemeanor  and  felony                                                               
convictions.   The  division develops  unique relationships  with                                                               
employers, who  will often  give these clients  a chance,  so the                                                               
barrier  doesn't become  a  lifelong issue  once  the person  has                                                               
served time.                                                                                                                    
                                                                                                                                
CHAIR  OLSON  asked whether  the  crimes  fall under  misdemeanor                                                               
nonviolent criminal acts.                                                                                                       
                                                                                                                                
4:07:51 PM                                                                                                                    
                                                                                                                                
MR. WALSH answered that the division covers the whole spectrum.                                                                 
                                                                                                                                
REPRESENTATIVE  HERRON  asked whether  she  had  a timeframe  for                                                               
completion.                                                                                                                     
                                                                                                                                
COMMISSIONER  BLUMER  answered  that  she  was  unsure,  but  she                                                               
offered  to report  back  to the  committee.   In  response to  a                                                               
question, she said was unsure if  the report would be done during                                                               
the legislative session.                                                                                                        
                                                                                                                                
4:08:50 PM                                                                                                                    
                                                                                                                                
MR.   WALSH   explained   that   the   Division   of   Vocational                                                               
Rehabilitation has  established a  "business team"  of counselors                                                               
to assist  employers hire  qualified employees  with disabilities                                                               
or criminal history.  The  division assisted 598 individuals with                                                               
disabilities  find employment.    The  division has  collaborated                                                               
with the  Department of Administration to  increase the knowledge                                                               
of the  provisional hiring program.   This program  allows people                                                               
with  disabilities  to  have  access   to  state  jobs,  with  an                                                               
additional  four months  of provisional  hire.   The  competitive                                                               
interview  process  is  difficult  for  the  disabled,  plus  the                                                               
process doesn't  indicate how well  they can perform  once hired.                                                               
She pointed out the statute has  been underutilized.  The DOA has                                                               
been  working with  hiring managers,  for example,  managers must                                                               
fill out a checklist indicating  whether they have considered the                                                               
provisional hire program to raise awareness.                                                                                    
                                                                                                                                
4:11:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON   asked  whether  the   division  could                                                               
provide an  executive summary on employment  barriers rather than                                                               
providing a full report.   He's primarily interested in the crime                                                               
and the  employment barriers.   For  example, a  theft conviction                                                               
would understandably  prevent a  person from  working in  a bank,                                                               
but the person may be able to work in another field.                                                                            
                                                                                                                                
COMMISSIONER  BLUMER recalled  that when  the department  started                                                               
the process  approximately 435  barriers exist  in statute.   The                                                               
department strives to pare that  number down and do a "crosswalk"                                                               
to specific jobs and specific crimes.                                                                                           
                                                                                                                                
4:13:04 PM                                                                                                                    
                                                                                                                                
MIKE  MONAGLE, Director,  Central  Office,  Division of  Workers'                                                               
Compensation,  DLWD,   stated  that   last  year,   the  Workers'                                                               
Compensation  Board formed  a working  group consisting  of labor                                                               
and  industry  who conducted  "listening  sessions"  to obtain  a                                                               
sense  of the  employee and  employer issues.   He  characterized                                                               
this effort as being instructive,  noting the group received good                                                               
feedback.   It's been  so successful that  the division  made the                                                               
working group a permanent subcommittee  of the board.  This year,                                                               
the division  rolled out  a new  computer case  management system                                                               
that improves data  capture but also allows the  division to take                                                               
advantage  of  electronic  data interchange.    That  interchange                                                               
allows  insurance  companies, claims  administrators,  employers,                                                               
and self-insured  employers the ability to  report information to                                                               
the division electronically.   He described the  changes as being                                                               
a simplified process which eliminates paperwork.                                                                                
                                                                                                                                
MR.   MONAGLE  reported   that   the  division   has  a   special                                                               
investigations unit  that ensures  compliance with  the insurance                                                               
requirements  of  the  workers'  compensation act.    He  further                                                               
reported  that  an  employer  who fails  to  carry  insurance  is                                                               
subject to fairly  steep civil penalties.  The  division has been                                                               
working  to be  more proactive  and has  held employer  education                                                               
workshops statewide  since employers are  often not aware  of the                                                               
legal   requirements  or   are   misinformed  about   independent                                                               
contractors  or  employee  labor.    The  division  would  rather                                                               
educate  people "upfront"  to ensure  compliance  than to  assess                                                               
large  civil penalties.   In  response to  a question,  he agreed                                                               
that employee claims can trigger investigative actions.                                                                         
                                                                                                                                
4:15:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  recalled  learning that  some  trades,                                                               
such  as  dry  wall,  carpentry,  or  roofing,  have  experienced                                                               
rampant  workers' compensation  issues since  some employees  are                                                               
being treated as employees for tax purposes only.                                                                               
                                                                                                                                
MR. MONAGLE  acknowledged that it  is common in  the construction                                                               
industry  to treat  employees as  independent contractors  rather                                                               
than as employees, which is not  appropriate.  He pointed out the                                                               
division receives complaints from  industry, a specific employer,                                                               
or an  employee.  He related  that the division has  a Memorandum                                                               
of  Understanding  with  the Division  of  Insurance  (DOI)  with                                                               
respect to  procedures for  handling this.   For example,  if the                                                               
employer  doesn't  have  any insurance,  it  becomes  a  workers'                                                               
compensation issue  as an  uninsured employer.   However,  if the                                                               
employer has  an insurance policy,  the matter is handled  by the                                                               
DOI, who treats  it as a misclassification or premium  fraud.  To                                                               
recap,  the  workers' compensation  division  does  follow up  on                                                               
complaints, he said.                                                                                                            
                                                                                                                                
4:18:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON asked whether  the statutes are adequate                                                               
for enforcement.                                                                                                                
                                                                                                                                
MR.  MONAGLE offered  his belief  that the  workers' compensation                                                               
laws are  adequate.  He said  this as a "hot  topic country wide"                                                               
and not  unique to  Alaska.  Many  states have  adopted statutory                                                               
language specific  to independent contractors to  the extent that                                                               
people   must  register   with  the   state  as   an  independent                                                               
contractor.  He said he doesn't  think the state is interested in                                                               
more bureaucracy; however, the workers'  compensation has a well-                                                               
defined  litmus  test  to  differentiate  between  employees  and                                                               
independent contractors.   Thus, the workers'  compensation board                                                               
has a "fact set" to make the correct determination.                                                                             
                                                                                                                                
4:19:22 PM                                                                                                                    
                                                                                                                                
CHAIR  OLSON offered  his belief  that this  problem likely  will                                                               
arise when  someone is  consistently the  low bidder  on projects                                                               
since the company doesn't have the labor burden.                                                                                
                                                                                                                                
MR. MONAGLE answered that lots of  people "play by the rules" but                                                               
they must compete  with those that don't.   The division receives                                                               
complaints when  companies consistently underbid since  they have                                                               
12 independent contractors working for them.                                                                                    
                                                                                                                                
4:19:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON  recalled   that  people  appreciated  the                                                               
Division of Workers' Compensation "listening."   He asked for the                                                               
top two complaints the division has heard.                                                                                      
                                                                                                                                
MR.  MONAGLE answered  that the  number  one complaint  employers                                                               
raised  was  the   cost  of  the  premiums   and  medical  costs.                                                               
Additionally, some  injured workers  complained about  the amount                                                               
of time it takes to settle disputes  since it can take up to 8-10                                                               
years to  complete the process.   He characterized this  as being                                                               
horrific, that  people need solutions  faster, and the  outcome -                                                               
either a  denial or  an award  - must happen  more quickly.   The                                                               
workers' compensation does  mediations which has cut  time.  Last                                                               
year  the division  conducted 60  mediations.   He remarked  that                                                               
what is  nice about this is  that the mediations result  in about                                                               
90  percent  resolution;  however,   the  process  is  voluntary.                                                               
Finally,  the   division  receives   complaints  about   the  re-                                                               
employment process.   For example, if a person is  hurt and can't                                                               
perform the same  work, the division has a  statutory process for                                                               
retraining,  which includes  a  cash stipend.    He reported  the                                                               
success rate  in retraining  people is  about eight  percent with                                                               
only 10-13  people become retrained  annually.  Most  people just                                                               
take the  cash and settle out.   In those instances  the division                                                               
is not really  assisting the injured worker in  getting back into                                                               
gainful employment.                                                                                                             
                                                                                                                                
4:22:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON  recalled   Ms.  Dahlstrom  indicated  the                                                               
department  is working  on success  definition under  ATVEP.   He                                                               
understood  several vocational  education  schools  want to  take                                                               
advantage of ATVEP  dollars.  He said the "800  pound gorilla" is                                                               
that the  UA receives a substantial  amount of this funding.   He                                                               
asked whether the  UA will be held to the  same standards as "all                                                               
the  little  guys"  including  AVTEC.     He  asked  whether  the                                                               
legislature should be working in  concert with the DLWD to define                                                               
the success  definition.  Secondly,  he asked whether  instead of                                                               
making the slice smaller for  the "little guys" shouldn't some be                                                               
sliced from the university.                                                                                                     
                                                                                                                                
COMMISSIONER  BLUMER   answered  that  the  ATVEP   fund  has  10                                                               
recipients,   with   50   percent  going   to   the   university.                                                               
Additionally, funds go  directly to the organizations  and do not                                                               
pass  through  the  department.    The rest  of  the  grants  are                                                               
administered through  the department and the  department provides                                                               
the legislature with  a report.  She offered her  belief that the                                                               
legislature should have received  that report recently.  However,                                                               
the  department does  not have  any authority  to garner  all the                                                               
information required  by statute.   She  suggested that  a slight                                                               
adjustment needs  to occur, which  is outlined in  the governor's                                                               
bill, which  requires an articulation  agreement.  She  said each                                                               
ATVEP  recipient must  have at  least one  articulation agreement                                                               
encouraging them to  work with youth and the  school districts to                                                               
provide  a  "running start"  for  students  graduating from  high                                                               
school.   Secondly, another component  in the governor's  bill is                                                               
the  authority to  reduce  funding by  20  percent the  following                                                               
year,  if those  measurements are  not  met and  provided to  the                                                               
department.    She  further  said   she  thinks  that  should  be                                                               
sufficient   to  assist   the   department   in  gathering   that                                                               
information and providing it to the legislature.                                                                                
                                                                                                                                
COMMISSIONER  BLUMER,  in  terms  of  cuts,  responded  that  the                                                               
department is  very neutral on  formula funding.   The department                                                               
will  provide  the information  needed  in  terms of  performance                                                               
measures  but   it  is  up   to  the  legislature  to   make  the                                                               
determination.                                                                                                                  
                                                                                                                                
4:26:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON  acknowledged that the legislature  has the                                                               
purse strings.   He wondered whether the  legislature should work                                                               
in concert  on the "success  definition" since it's  important to                                                               
think  about  what a  "success  definition"  and the  legislature                                                               
should be  part of  the debate  "before we trot  it out  into the                                                               
world."                                                                                                                         
                                                                                                                                
COMMISSIONER BLUMER  agreed.  She  highlighted that  three strong                                                               
measurement   components  exist:   the   participant  rate,   the                                                               
employment  after  completion,  and  the  wage  component.    She                                                               
acknowledged that the other two  components are difficult to get,                                                               
such   as  measuring   participant   satisfaction  and   employer                                                               
satisfaction.    She  said,  "That's   hard  information  to  get                                                               
sometimes, frankly."                                                                                                            
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
4:27:29 PM                                                                                                                    
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Labor and  Commerce Standing Committee  meeting was  adjourned at                                                               
4:27 p.m.                                                                                                                       

Document Name Date/Time Subjects
DOLWD Interim Progress Report 02-12-2014.pdf HL&C 2/12/2014 3:15:00 PM
Dept of Labor presentation