SB 68-EMPLOYMENT OF MINORS  3:41:30 PM CHAIR KAWASAKI reconvened the meeting and announced the consideration of SENATE BILL NO. 68 "An Act relating to employment; relating to voluntary flexible work hour plans; relating to the employment of minors; and relating to hours worked by minors employed in the state." 3:42:06 PM CATHY MUNOZ, Commissioner, Department of Labor and Workforce Development, Juneau, Alaska, presented SB 68 sponsored by the Rules Committee by Request of the Governor. She stated the two primary components of SB 68. The first component is the child labor laws: -Removes the work permit requirement for 16-year-olds. She said the department processes more than 2500 work permits a year for 16-year-olds and takes a lot of staff time. -Section 5 allows businesses to get one blanket approval for employing 14- and 15-year-olds instead of filing individual permits. -Extends permit exemptions to include extended family-owned businesses not just parent owned businesses. -Section 4 increases allowable work hours for young people: up to 10 hours a day combined with school and up to 40 hours a week in the summer for 16-year-olds. She said the second component is flexible work scheduling: -Creates an option for employees and employers to agree to a 3/12 schedule (three 12-hour days per week, four days off). -Exempts workers on this schedule from daily overtime rules (though weekly overtime at 40 hours still applies). -Requires mutual consent between the employer and the employee and approval by the Department of Labor. -Expands flexibility beyond hospitals to other industries. 3:47:31 PM SENATOR YUNDT asked whether this policy change will affect surgery centers that operate Monday through Friday with eight- hour days. 3:47:53 PM MS MUNOZ replied that the policy change is a voluntary option and would have to be approved by the employer and the employee. She stated that the surgical centers asked the Department of Labor to allow the 3/12 work schedule so they can compete with hospitals in attracting workers. 3:48:46 PM SENATOR WIELECHOWSKI referenced [AS 23.10.060(d)(14)(A)] Section 1, lines 8-11, and asked if there is a limit to how many hours a child can work in a week. 3:48:58 PM MS. MUNOZ answered that the proposal sets a 40-hour weekly work limit for 16-year-olds during summer employment. 3:49:31 PM TANYA KIETH, Director, Division of Labor Standards and Safety, Department of Labor and Workforce Development, Anchorage, Alaska, delivered the presentation on SB 68 and stated that 14- and 15-year-olds are only allowed to work 23 hours per week and are not allowed to work overtime. SENATOR WIELECHOWSKI asked if this proposal changes the hours allowed to work. 3:50:20 PM MS. KIETH responded that the proposal allows 14- or 15-year-olds to work 40 hours a week, during summer or school breaks, not while school is in session. SENATOR WIELECHOWSKI asked if that's a maximum of 40 hours allowed without overtime. MS. KIETH replied yes, 14- and 15-year-olds are not allowed to work daily or weekly overtime. SENATOR WIELECHOWSKI asked how a work week is defined in this legislation. MS. KIETH answered that a work week is a 7-day period with the employers setting the start and end date. SENATOR WIELECHOWSKI gave an example. He asked whether there can be any manipulation of the work week to get a minor to work more than 40 hours. MS. KIETH answered that the employers must set a fixed work week and cannot change it to avoid paying overtime. 3:52:44 PM SENATOR YUNDT asked for clarification on whether SB 68 allows 14-year-olds and above to work 40 hours a week when school is not in session. 3:53:10 PM MS. KIETH answered that 16-year-olds are already allowed to work 40 hours a week. She stated that SB 68 would allow 14- or 15- year-olds to work 40 hours a week only when school is out of session. 3:53:31 PM CHAIR KAWASAKI asked what defines when school is in session and not in session and how does it apply to homeschool situations. 3:53:51 PM MS. KIETH answered that school hours for home school would be the same 6 hours as public school. 3:54:27 PM SENATOR WIELECHOWSKI asked whether there is a restriction on the time of day a student can work and can students work graveyard shift. 3:54:37 PM MS. KIETH answered that students are not allowed to work before 7am or past 9pm. 3:55:49 PM MS. KIETH moved to slide 2, Purpose, and stated that SB 68 updates child labor laws to make it easier for businesses to hire minors, reduce paperwork, and expand job opportunities in fields like retail, hospitality, and apprenticeships. The legislation aims to support youth skill development and safe work experiences; while also allowing more flexible work schedules, such as shifts over 10 hours, to help address staffing shortages and meet modern workforce needs. 3:57:17 PM MS. KIETH moved to slide 3, Summary of Child Labor Changes, and stated that SB 68 makes three main changes to child labor laws: -Expanded exemptions: Removes permit requirements for 16 and 17- year-olds and broadens family business exemptions to include parent, sibling, aunt, or uncle-owned businesses. -Simplified permitting: Replaces individual work permits with a registration system, letting businesses get approval once to hire minors. -Adjusted work limits: Increases daily school-and-work hours from 9 to 10, allows 1415-year-olds longer after-school shifts, and raises their summer work limit from 23 to 40 hours per week. 3:59:27 PM CHAIR KAWASAKI asked whether a 14-year-old needs permission from a parent before accepting a job from a business. 3:59:40 PM MS. KIETH replied the 14-year-old does need a parent to sign a work permit to begin working at a business. 3:59:50 PM CHAIR KAWASAKI asked if this would include 16-year-olds. 3:59:56 PM MS. KIETH responded that currently 16-year-olds are required to have a signed work permit. CHAIR KAWASAKI asked for confirmation that 16-year-olds would not need a signed work permit upon the passage of SB 68. MS. KIETH answered yes, but the law still requires the parent's approval of the work. The legislation doesn't remove the parent approval it just removes the requirement for the business to submit the work permit to the Department of Labor and Workforce Development for approval. CHAIR KAWASAKI asked how this new legislation would be enforced if a 16-year-old gets a job without parent approval, and would it be the employers' job to tell the department they hired a 16- year-old. MS. KIETH replied if the above situation was brought to the department, then the department would inform the employer they need a work permit for the 16-year-old employee. 4:01:27 PM SENATOR WIELECHOWSKI asked for the average number of violations the department receives concerning labor laws on weekly work hours. 4:01:45 PM MS. KIETH replied that currently the department is not seeing very many violations regarding labor law hours. 4:02:00 PM SENATOR WIELECHOWSKI asked if the department has done any research on the impact to kids; by increasing the number of hours worked per week. According to the National Institute of Health Studies, increasing the number of hours worked for teenagers to 40 hours has a negative impact. 4:02:28 PM MS. KIETH replied it is her belief that there hasn't been any research completed. SENATOR WIELECHOWSKI asked Ms. Kieth whether she thinks it is important for Alaska to do its own research on the impact of a 40-hour work week on 14-year-olds. MS. KIETH answered yes, she opined that it would be important to the department. 4:03:25 PM CHAIR KAWASAKI jumped ahead and referenced slide 5, "Wage and Hour's primary duty is to ensure safety for youth workers. Rigorous enforcement efforts are essential in ensuring a safe and just environment for the youth. 4:04:02 PM MS. KIETH moved to slide 4, Work Permits Process for Employers and Youth Workers: [Original punctuation provided.] • Complete work permit for each youth worker, all job duties and tools must be included • Employer must obtain a parent or legal guardian signature on the work permit • A work permit must be submitted to the department for approval • Youth worker cannot begin working until the work permit is approved • A new work permit is required to be approved before a current youth worker can be assigned: -Any new job duty -Any new tool assigned to the youth worker 4:05:27 PM MS. KIETH moved to slide 5, Work Permit Processing by Wage and Hour: [Original punctuation provided.] • From 2020 to 2024, Wage and Hour received a total of 29,719 work permits across 3,345 employers, averaging approximately 5,944 permits per year. -63% of work permits are received May-August -Peak season wait time to approve work permits, four days to five weeks -3 to 4.5 investigators working solely to process work permits during this time • Due to workload created by work permits, Wage and Hour was only able to conduct a total of 402 inspections of child labor worksites, averaging 80 inspections each yearequating to 1.5 inspections per week. Wage and Hour's primary duty is to ensure safety for youth workers. Rigorous enforcement efforts are essential in ensuring a safe and just environment for the youth. 4:08:16 PM SENATOR WIELECHOWSKI asked about the bottom of slide 5; what aspects of safety the department is concerned with. 4:08:31 PM MS. KIETH stated its her belief that detecting unsafe working conditions requires on-site inspections, not paperwork, since employers evading the law can still complete permits. She emphasized the need to prioritize investigators being in the field to ensure safety and compliance. 4:09:24 PM SENATOR WIELECHOWSKI asked whether she feels the department is unable to protect the safety of youth workers with the current staffing levels. 4:09:38 PM MS. KIETH responded that processing excessive paperwork prevents the department from using its resources effectively to ensure youth workers' safety. 4:10:10 PM SENATOR WIELECHOWSKI restated his question. 4:10:24 PM MS. KIETH replied it is her belief that resources should focus on on-site inspections, but the heavy workload of processing work permits prevents this from happening. SENATOR WIELECHOWSKI asked if there is a law preventing the department from shifting investigators from processing permits to conducting field inspections to protect youth workers. MS. KIETH replied no, the Wage and Hour unit has nine investigators in Alaska, and they already handle many responsibilities, including wage claims, public construction, and child labor enforcement. She stated it is the department's belief that this administrative task does nothing to protect youth workers. 4:11:47 PM CHAIR KAWASAKI asked of what type of errors the three to four and a half investigators find when processing work permits. He questioned whether the process involves identifying specific mistakes or if it is simply a yes-or-no determination of validity. 4:12:11 PM MS. KIETH responded that the investigators find a lot of paperwork errors. The employer's paperwork has to be filled out correctly with a list all duties and tools they will be using or doing. 4:12:35 PM CHAIR KAWASAKI asked what kind of violations the inspectors find during the inspections. 4:13:04 PM MS. KIETH replied that the investigators have found minors that don't have work permits and find that employers are not aware that minors need breaks during their shift. CHAIR KAWASAKI requested further analysis of work site violations that the Wage and Hour unit conducts for child labor and other labor violations that occur and what happens after the violation is found. He stated the committee would like to know what happens after a citation is issued, has the minor been paid on time, has the Wage and Hour unit ever shut down businesses because of work permit violations. 4:14:19 PM SENATOR WIELECHOWSKI asked how long it takes to conduct a workplace inspection. 4:14:36 PM MS. KIETH responded that on average it can take 2-4 hours to conduct an inspection, it depends how many minors are employed at the work site. 4:14:50 PM SENATOR WIELECHOWSKI calculated there are nine total investigators and four and a half are dedicated solely to processing permits, that leaves about four and a half investigators available for field inspections. If each inspection takes two to four hours; he asked why those four and a half investigators are averaging only about one and a half inspections per week, given they're working roughly 36 to 40 hours each week. MS. KIETH answered that on top of child labor inspections the investigators are also investigating wage claims, in addition to public construction investigations and enforcement. She stated there are currently over 5,000 projects the department is overseeing. SENATOR WIELECHOWSKI suggested the department needs more investigators and asked if in the last 6 budgets, has the department asked for more staffing. MS. KIETH replied that in the previous legislation the department has asked for more staff. SENATOR WIELECHOWSKI asked if she needs legislation to get additional investigators or can the executive branch override and approve the department to hire more investigators. MS. KIETH replied that the department has asked for permission to hire more investigators whenever new legislation or new work duties arise that increase the workload for the Wage and Hour unit. SENATOR WIELECHOWSKI requested a list of all departmental requests made in the last six years for additional investigators. 4:17:30 PM SENATOR YUNDT asked if approving blanket work permits for each establishment would allow investigators to conduct more inspections, and whether investigators could use the blanket approval in the field to verify a businesss compliance. 4:18:21 PM MS. KIETH replied that under the new process, employers would submit one application per business instead of multiple individual permits. This would let the department track where minors are working and better focus child labor investigations. 4:18:53 PM SENATOR YUNDT stated that he hopes this new legislation, if passed, will help get more inspections done during the week. 4:19:40 PM MS. KIETH moved to slide 6, Youth Employment Registration Process, and stated that the legislation would create a new registration process for businesses employing 1415-year-olds. Employers would apply for approval at each work location, confirm compliance with state and federal child labor laws, and attend mandatory training sessions for supervisors overseeing minors. She said employers will provide parents of minors detailed job descriptions, be informed of work restrictions, and give written consent, which employers must keep on file for inspections. This system ensures the department knows where minors are working, strengthens compliance, and frees up staff time for more on-site inspections. 4:22:33 PM MS. KIETH moved to slide 7, Benefits of Improvement to Child Labor, and stated that the legislation would reduce bureaucratic barriers for businesses, making it easier to hire youth workers. Employers vetted by the department could bring minors on quickly, giving young people earlier access to valuable job experience and skill development. She said youth would be able to move between jobs without needing new permits, while the department could shift its focus from paperwork to on-site inspections, compliance monitoring, and education. The changes aim to create safer workplaces for minors, ensure labor laws are followed, and provide more opportunities for youth employment. 4:25:09 PM MS. KIETH moved to slide 8, Summary of Flexible Work Hour Changes, and stated that SB 68 allows a voluntary flexible work plan that extends the daily work limit from 10 to 12 hours, providing businesses and employees with more scheduling flexibility while keeping existing worker protections in place. 4:25:53 PM SENATOR WIELECHOWSKI asked if an employer can schedule a minor two weeks on two weeks off schedule. 4:26:16 PM MS. KIETH clarified that the flexible work hours mentioned in slide 8 are for adult employees over the age of 18. 4:27:15 PM MS. KIETH moved to slide 9, Flexible Work Hour Plan Laws; [AS 23.10.060(14)], and stated that Alaska law allows flexible work hour plans that let full-time employees work longer days to finish their schedules in fewer days, while still protecting overtime rights. These plans are voluntary as employers cannot require them or make employment conditional on participation and must be approved by the Department of Labor. She said currently, employees can work up to 10 hours a day under such plans, with overtime still owed for hours beyond the agreed daily or weekly limits. 4:29:09 PM SENATOR WIELECHOWSKI said he wanted to understand the practical implications of the flexible work hour plan. He asked for confirmation that the plan applies to employees over 18 years old and that SB 68 would allow employers to create flexible work plans of up to 12 hours per day without paying overtime, compared to the current 10-hour limit. 4:29:35 PM MS. KIETH answered yes, and it would allow the employee to compress their work week into a three-day work week instead of 4. MS. KIETH moved to slide 10. She went over the flexible work hour plan form. She talked about the highlighted portions on the form listed below: [Original punctuation provided.] 2. Employee participation in this plan must be voluntary and cannot be a condition of employment. 3. Flex-plans do not allow an employer to routinely impose a work schedule that deviates from the hours specified and agreed to by the employee in the plan. Only occasional deviations up to 20 percent of the weeks worked (one in five weeks) are allowed. Failure to adhere to the flex plan schedule for at least 80 percent of the work weeks will very likely result in the plan being invalidated, thus triggering all the overtime to be owed based on any hours worked over eight hours in a day or over forty straight-time hours in a week. NOTE: Variations from an approved plan other than those discussed above may void the Flex Plan entirely. 3) a statement that flexible work hour plan has not been made a condition of employment and that participation in the plan is voluntary f) A voluntary flexible week hour plan is not valid, unless the employee working under the plan has been offered an equivalent weekly schedule of hours with overtime pay after eight straight time hours in a day. h) Except for occasional deviations in an employee's work schedule that do not exceed 20 percent of the weeks worked by an employee under a voluntary flexible work hour plan, an employer shall pay overtime as required by AS 23.10.060(b) when an employee deviates from the approved flexible work hour plan. 4:32:24 PM CHAIR KAWASAKI asked if an employee switches from a standard 7.58-hour day to a four-day, ten-hour schedule would the employee need to sign a flexible work hour plan form. 4:32:46 PM MS. KIETH answered yes, any employee working a flexible work hour plan is required to have an approved plan filled out and signed. 4:33:03 PM MS MUNOZ clarified that the flexible work hour plan is a voluntary work plan that needs the consent of the employer and the employee and cant be mandated by the employer. 4:33:20 PM SENATOR WIELECHOWSKI asked when hiring, can an employer state upfront that the schedule is three 12-hour days per week, and the applicant can choose whether to accept it. In other words, the employee has the right to decline and instead request a different schedule, such as five 8-hour days or four 10-hour days. 4:33:50 PM MS. KIETH answered yes. She stated that the agreement is only valid if the employee is also offered an equivalent 8-hour shift option. An employer cannot require a 4/10 schedule. She said if the department found a business doing so, the employer would be liable for back overtime pay to all employees working at that business. 4:34:35 PM MS. KIETH moved to slide 11, Flexible work hour plans 2020-2024: [Original punctuation provided.] • Department approved flexible plans for 1,348 employers; once approved, multiple employees can be added to the plan • Department estimates between 5,300 13,500 employees work alternate work schedules • Department received a total of 563 wage claims -Of those, only one wage claim was related to violation of a flexible plan MS. KEITH stated that the program has seen very few violations, and when they occur, penalties are applied. Since employers are generally compliant and already face higher penalties if they break the rules, expanding the program is unlikely to make a big difference. Overall, the flexible work hours plan has operated with low risk to the community. 4:36:40 PM SENATOR WIELECHOWSKI asked if an employer has five workers, and four agree to the 12-hour flexible schedule but one prefers a standard 5-day, 8-hour schedule, are you saying the employer would have to accommodate that one employee. 4:37:02 PM MS. KIETH answered yes. SENATOR WIELECHOWSKI asked if she had ever seen an employee laid off for asking to work a standard work schedule instead of a 12- hour flexible schedule. MS. KIETH replied no and stated that if an employee was pressured into a flexible work plan and later complained after leaving the job, the employer could be liable for up to two years of back overtime pay. 4:37:56 PM CHAIR KAWASAKI gave a personal example; he was forced to sign a flexible work hour agreement under duress after previously working 8-hour shifts and then changing to a 10-hour shift. He stated that he only signed to keep his job and continued the 10- hour night shifts, which allowed him to run for political office. He asked if there's something that can be done about that situation. 4:38:57 PM MS. KIETH replied that there's a two-year statute of limitations, so if an employee brought this forward, the employer would be required to provide up to two years of back pay. CHAIR KAWASAKI stated that many employees don't fully understand their rights, so when an employer gives them a form to sign, they usually do sign it. 4:39:42 PM MS. KIETH moved to slide 12, Benefits of Flexible Work Hour Plans, and stated that flexible work hour plans can benefit both employers and employees. Employers gain tools to address labor shortages, reduce costs, improve staffing consistency, and stay competitive by offering flexible schedules. Employees benefit through customized schedules, better work-life balance, reduced commuting costs and stress, and improved options for managing childcare and education needs. 4:42:26 PM MS. MUNOZ said that SB 68 aims to use resources more efficiently by replacing the paper processing of thousands of permits with a system that better serves the public, supports businesses, and helps young people enter the workforce. She said this legislation promotes the value of work for young people while also offering flexible scheduling options to meet the needs of families and improve work-life balance. 4:45:06 PM CHAIR KAWASAKI asked if there are any jobs where employees work more than 8 hours a day but don't receive overtime pay. 4:45:50 PM MS. MUNOZ replied that the statute includes roughly 12 exemptions from overtime, one of which applies to salaried employees. These workers generally do not receive overtime because their salary is intended to cover a standard eight-hour day or 40-hour week. CHAIR KAWASAKI asked whether there is anything preventing a business from hiring someone and telling them they are working a 12-hour shift with compensation but you have to work. MS MUNOZ replied not for adult workers. 4:46:45 PM SENATOR YUNDT opined that the 4/10 schedule is the greatest work schedule. 4:47:34 PM CHAIR KAWASAKI opened public testimony on SB 68. 4:47:52 PM SHANNON DAVENPORT, representing self, Alaska Nurses Association, Anchorage, Alaska, testified in opposition to SB 68 and stated that the first section of the bill concerning a 40-hour workweek with a maximum of 10 hours per day is like Senate Bill 153 last year that focused on adults, but SB 68 targets children. She said research on adults, like nurses working 12-hour shifts, shows longer hours lead to burnout, stress, fatigue, and errors. She said for minors, working beyond six or seven hours can harm school performance and well-being. She stated that Alaska law already limits 14- and 15-year-olds to 23 hours per week during school. Children under 18 cannot work in certain healthcare settings due to safety risks. Programs like job shadowing must cap hours at six and include proper training. She opined that more data is needed to evaluate the flexible workweek for minors and ensure their safety while balancing school and work. 4:53:13 PM CHAIR KAWASAKI closed public testimony on SB 68. 4:53:48 PM CHAIR KAWASAKI held SB 68 in committee.