HB 161-PAID SICK LEAVE EXEMPTION  5:35:13 PM CO-CHAIR FIELDS announced that the next order of business would be HOUSE BILL NO. 161, "An Act relating to minimum paid sick leave requirements; and providing for an effective date." 5:35:35 PM REPRESENTATIVE JUSTIN RUFFRIDGE, Alaska State Legislature, as prime sponsor, presented HB 161. He stated that, upon the passage of Ballot Measure 1, there were concerns across the small business community in Alaska about the effect on small businesses. He asserted that the proposed legislation would not change key provisions of or repeal Ballot Measure 1, "most notably the increase to minimum wage," which he stated was broadly supported across Alaska. He explained that HB 161 would alter some sections regarding change to paid sick leave requirements for businesses. He stated that the adjustments made by HB 161 would alleviate some of the burden on small businesses under Ballot Measure 1. 5:37:34 PM BUD SEXTON, Staff, Representative Justin Ruffridge, Alaska State Legislature, presented HB 161 on behalf of Representative Ruffridge, joint sponsor of HB 161. He began on the second slide of the PowerPoint [included in the committee file] and drew committee members' attention to a graph representative of comparisons between Ballot Measure 1 and HB 161 with regards to the number of employees, leave cash out option, employer notification, and seasonal workers. The second slide read as follows [original punctuation provided]: # of employees  [Ballot Measure 1] Leave accrual applies to small businesses with 15 or more employees, not more than 56 hours a year [HB 161] Leave accrual applies to businesses with 50 or more employees # of employees  [Ballot Measure 1] Leave accrual applies to small businesses with fewer than 15 employees, not more than 40 hours a year. [HB 161] Applies to businesses with 50 or more employees Leave cash out  [Ballot Measure 1] No language [HB 161] An employer may, at the employee's request, allow an employee to exchange accrued sick leave for the cash value of the accrued sick leave. Notify employer  [Ballot Measure 1] No requirement for good faith effort by employee to notify the employer before the workday begins [HB 161] Requires the employee to make a good faith effort to provide notice to the employer in advance of the use of paid sick leave and before the start of the workday. Seasonal workers  [Ballot Measure 1] No language [HB 161] Exempt seasonal workers from sick leave accrual. MR. SEXTON moved to the third slide of the presentation and drew committee members' attention to the image which listed entities in support of HB 161. He concluded by reading the third slide as follows [original punctuation provided]: Enables Alaskan businesses to thrive Taking care of our local businesses means taking care of our workforce Allows employees to cash out their accrued sick leave 5:39:50 PM REPRESENTATIVE CARRICK asked how HB 161 compared to the law pre- Ballot Measure 1. REPRESENTATIVE RUFFRIDGE responded that prior to Ballot Measure 1, there were no requirements regarding paid sick leave. He further noted that everything in Ballot Measure 1 was "essentially new." He explained that HB 161 was constitutional in allowing the amending of Ballot Measure 1, as it would be unconstitutional to repeal it or return to law pre-Ballot Measure 1. 5:41:19 PM The committee took a brief at-ease at 5:41 p.m. 5:42:03 PM REPRESENTATIVE COULOMBE stated that most of the businesses in her district, while aware of the minimum wage provision, were not aware of the provisions for paid sick leave under Ballot Measure 1. She stressed that, without the amendments under HB 161 to Ballot Measure 1, small businesses would close, increase prices, or lose workers. She noted that she and Representative Ruffridge worked with Legislative Legal to ensure that they were within legal parameters and not undermining the intent of Ballot Measure 1. She opined that HB 161 would help small businesses transition into the paid sick leave requirements of Ballot Measure 1. 5:44:07 PM CO-CHAIR FIELDS facilitated a brief discussion of the remaining agenda items. 5:45:18 PM KATI CAPOZZI, President & CEO, Alaska Chamber, began her invited testimony by introducing the Alaska Chamber, noting that it represents businesses of "all sizes and industries across the state." She emphasized that the legislature has broad powers to amend initiatives and encouraged committee members to "fix the most harmful records" of Ballot Measure 1. She stated that small businesses owners, particularly those in hospitality and tourism, have experienced a lot of hardship, including a global pandemic, workforce shortages, inflation, and newly introduced tariffs. She stated that Ballot Measure 1 introduced a "one- size-fits-all" mandate across Alaska. She stated that since its passage, many voters did not understand the true implications of the ballot measure. She cited the Alaska Chamber's most recent public opinion survey, reporting that 40 percent of Alaska residents did not know that mandated paid sick leave was included in the ballot measure. Additionally, she reported that 58 percent of respondents affirmed that they would support a paid sick leave exemption for employers with fewer than 50 employees. She asserted that exemptions to paid sick leave [under HB 161] were necessary because Ballot Measure 1 had duplicative compliance measures for employers that already provided comprehensive paid sick leave and paid time off. She asserted that Ballot Measure 1 would cause recordkeeping and administrative complications for small- and medium-sized employers and additionally asserted that it would cause operational disruptions due to inflexible accrual and usage standards, particularly with regard to seasonal and hospitality businesses. MS. CAPOZZI stated that the Alaska Chamber supports HB 161 because it would introduce "critical guardrails and clarifications that would allow businesses to comply with the spirit of paid sick leave while reducing regulatory overreach and economic harm." She stated that HB 161 would reduce compliance burdens, clarify sick leave definitions, exempt seasonal employers whose operations peak at six months or less, and provide flexibility by permitting employees to cash-out unused sick leave. She said that HB 161 would encourage voluntary compliance over mandates. She asserted that HB 161 encourages job protection and growth and protects remote and rural businesses in Alaska. She thanked the committee for their consideration and stated that she was available for questions. 5:50:26 PM JOHN WEDDLETON, Business Owner, began his invited testimony by stating that his business was celebrating 41 years. He reported that his business had provided paid time off for the past 20 years. He noted that in his first 10 to 20 years of business, Ballot Measure 1 would have proved difficult for his business. He opined that the cap at 50 employees [under HB 161] was important, noting that it's likely that most businesses in Alaska have less than 50 employees. He suggested that HB 161 would set a standard that all businesses provide paid time off. He offered appreciation for the option under HB 161 that would allow employees to cash out paid time off. He offered his support for HB 161 and encouraged committee members to support the proposed legislation. 5:52:50 PM MS. CAPOZZI, in response to a question from Co-Chair Hall on the history of the Alaska Chamber's position on Ballot Measure 1, responded that her organization had been leading in their efforts to oppose Ballot Measure 1 for over a year. 5:54:07 PM REPRESENTATIVE COULOMBE commented that the Alaska Chamber had been in opposition for a long time, but that the Anchorage Chamber did not declare an official position. 5:54:44 PM REGINA DAVIS, Vice President, Davis Block & Concrete, began her invited testimony by stating that her business has supplied concrete for construction projects throughout the state for over 50 years, employing locals. She asserted that HB 161 was a practical solution that balanced "worker protections with the realities of running a small business in Alaska's unique economy." She said that HB 161 would protect small businesses by mitigating the burdensome paid sick leave requirements imposed by Ballot Measure 1. She said that the mandate to provide paid sick leave to every employee, including temporary staff, would strain their finances and administrative resources. She stated that HB 161 would raise the threshold to businesses with 50 or more employees. She further stated that HB 161 would support Alaska's seasonal economy, noting that her business projects increase in the summer and rely on seasonal workers. She asserted that requiring paid sick leave for seasonal workers creates administrative challenges and costs that do not align with the temporary nature of seasonal workers. She asserted that the exemption for seasonal workers under HB 161 would ensure that her business could continue to hire locally during the summer months. Additionally, she asserted that her business would need to raise prices or cut jobs to meet the requirements of Ballot Measure 1. She echoed other speakers in acknowledging the many obstacles small businesses have faced in recent years. She concluded by urging committee members' support of HB 161 and said that she was available for questions. [HB 161 was held over.]