SB 78-DISCLOSURE OF WAGE INFORMATION  2:03:54 PM CHAIR CLAMAN reconvened the meeting and announced the consideration of SENATE BILL NO. 78 "An Act relating to disclosure of information regarding employee compensation by employers, employees, and applicants for employment." CHAIR CLAMAN said that this is the first hearing of SB 78 in the Senate Judiciary Committee. He invited the bill sponsor to put himself on record and begin. 2:04:28 PM SENATOR FORREST DUNBAR, District J, Alaska State Legislature, Juneau, Alaska, introduced himself. 2:04:52 PM ARIELLE WIGGIN, Staff, Senator Forrest Dunbar, Alaska State Legislature, Juneau, Alaska, introduced SB 78 on behalf of the sponsor and presented the sectional analysis. She introduced SB 78, as paraphrased below: SB 78 does four key things: it prohibits employers from asking about an applicant salary history; job postings must include salary or salary range disclosures; protects a workers right to discuss wages; and bars retaliation for doing so. The bill addresses a well-documented issue called wage scarring. After mass layoffs or other events that are uncontrollable in employees' lives, displaced workers earned significantly less in their first year coming back from a recession. The 2008 recession, for example, resulted in displaced earners earning 27 percent less in their first year and 10 percent less after a decade. Much of this is due to accepting unstable or lower-quality employment post layoff or post illness. Removing salary history from the application cycle helps break the cycle by ensuring returning workers aren't anchored to lower past wages outside of their control. 2:05:52 PM MS. WIGGIN continued the introduction of SB 78: Coincidentally, yesterday was Equal Pay Day, which was observed on March 25. Equal Pay Day is a reminder that in 2024, women earned 85 percent of what their male counterparts earned, indicating that they are paid significantly less than men. It took until March 25 for women to catch up to the salaries earned by their counterparts the previous year. It takes much longer for those in other demographics who are paid much less. It may take Alaska Native individuals a full year to catch up to their previous salaries, as they earned 53 percent on the dollar in 2024. Salary transparency is a proven step forward to closing these gaps. Federal law already protects wage discussions, but this bill reinforces that protection in State law and makes compensation expectations clear from the start. This bill has an incompatibility measure allowing enforcement through fines, and also ensures pay is based on current skills, not outdated or inequitable past wages. It streamlines hiring by reducing the time spent on interviews that fall apart over salary discussions. Alaska's workforce deserves clarity, fairness, and respect. This bill is a practical next step. Thank you for your support. 2:07:21 PM MS. WIGGIN presented the sectional analysis for SB 78: [Original punctuation provided.] SECTIONAL ANALYSIS  SB 78: DISCLOSURE OF WAGE INFORMATION Sec. 1: Amends AS 23.10 Employment Practices and Working Conditions by adding Article 9. Disclosure of  Employee Compensation and the following sections: • Sec. 23.10.700. Disclosure of Discussion Wages:  (a) Requires job postings to include a salary or salary range. (b) Allows applicants and employees to discuss current wage, prohibits employers from asking applicants about their salary history with another employer (c) Clarifies that nothing in this section obligates an employee or applicant to disclose their compensation, prohibits an employee or applicant from voluntarily disclosing, or prohibits an employer from using information that is voluntarily disclosed under this subsection when determining the salary of an employee or applicant. • Sec. 23.10.705 Posting Summary Required requires an employer to post information summarizing the bill's provisions. • Sec. 23.10.710 Retaliation Prohibited prohibits an employer from retaliating against an employee for exercising a right under the bill. • Sec. 23.10.715 Damages for Retaliation allows an employee to file a civil claim against an employer if the employer retaliates. 2:08:36 PM MS. WIGGIN continued her presentation of the sectional analysis for SB 78: • Sec. 23.10.720 Statute of Limitations gives an employee no more than 3 years after a violation to file a civil claim. • Sec. 23.10.725 Penalty creates a fine between $100- $2000 for violations and directs the Department of Labor and Workforce Development Commissioner to determine the amount. An employer may, at the discretion of the Commissioner, reduce the fine or correct the violation by conducting an audit. • Sec. 23.10.735 Regulations adds language directing the Department of Labor and Workforce Development Commissioner to implement and interpret this bill and adopt regulations accordingly. • Sec. 23.10.790 Definitions exempts independent contractors from the definition of "employee." Defines an "employer" as the state, the University of Alaska, the Alaska Railroad Corporation, a political subdivision of the state, and a person who employs one or more employees. • Sec. 2: Amends the uncodified law of the State of Alaska by adding a new section specifying that this Act applies to compensation for services performed on or after the effective date of this Act. 2:09:35 PM SENATOR MYERS observed that the definition section mentions the University of Alaska and the Alaska Railroad Corporation, but does not mention other state-owned corporations, such as the Alaska Industrial Development and Export Authority, Alaska Housing Finance Corporation, and the Alaska Energy Authority. He asked why the bill does not include other entities. MS. WIGGIN expressed her understanding that those other subdivisions are, by default, included in this law because they are considered employers under the State of Alaska. In contrast, the University of Alaska is sometimes considered an independent employer, as is the Alaska Railroad Corporation, because it is largely governed by federal law. She explained that those two entities are specifically included in the definitions section because they are not, by default, subject to this law. She said she will verify with Legislative Legal Services and respond in writing. 2:10:31 PM SENATOR KIEHL stated that the legislation requires an employer to describe the compensation for a job with either a specific salary or a range of salaries. He asked what a reasonable goal is for a "range of salaries" description, wondering whether it could be as broad as between $35,000 and $185,000. MS. WIGGIN replied that the bill does not detail this, and the sponsor would like to consider the question and respond in writing. She expressed that the hope is the department would review information from one of the other twenty-two states that have enacted similar laws and use that to inform the regulations Alaska creates. She said if the bill sponsor finds it is necessary to define the range, he would consider the change. SENATOR KIEHL said that he is interested in how other states approached the subject of "range of salaries, so that it is meaningful, but also, not always a requirement that the employer post the precise salary. SENATOR KIEHL said SB 78 requires some speech, such as posting salary and benefit ranges, and also prohibits some speech by preventing an employer from asking about an applicant's previous job salaries. He asked whether the sponsor foresees the potential for First Amendment concerns or challenges from employers. 2:12:15 PM SENATOR DUNBAR replied that he did not believe this would constitute an actionable First Amendment issue. He explained that other states enacted similar laws, and it is his understanding that those laws have not been challenged. He stated that if those laws were challenged, they survived. He said that established employment law already places limits on what may be included in job postings, noting that employers cannot state, for example, that only certain races may apply. He said the bill fits within existing examples of what is considered proper or improper to include in a job listing. SENATOR KIEHL remarked that was a fair response. 2:13:23 PM SENATOR MYERS referred to page 1, line 14 through page 2, line 1, which states that an employer may not "ask an applicant for employment about compensation the applicant may have received from another employer?". He asked whether this includes not only compensation received from previous employers, but also compensation offered by potential employers with whom the applicant interviewed but did not accept a job offer. MS. WIGGIN replied that the intent of the legislation pertains to salaries that were actually received. She said she would verify her response with Legislative Legal Services. SENATOR MYERS recalled a personal example, stating that a coworker and he had both started working at the same company. The coworker shared that he had interviewed with another employer for a similar position, but the pay was too low, and the two ultimately ended up working together at the higher- paying job. The coworker relayed that information back to the first employer, explaining why he declined the offer. He said the other employer later contacted the coworker and reported that as a result of their conversation, the company increased its wages. SENATOR MYERS said he understood that the goal of the legislation is to empower workers. He said the ability to compare wages empowers not only individual workers but can also prompt employers to adjust their wages. He noted that if the goal of SB 78 is transparency, this raises a concern about the prohibition. He expressed hesitancy about the restriction and requested further explanation for the rationale behind blocking questions about previous salary history. 2:16:55 PM MS. WIGGIN replied that the intention of SB 78 is to disallow employers from asking about past wage history and other artifacts of a person's life, such as periods of illness, accepting lower-paid work due to childcare needs, performing childcare, or caring for an ill relative. She said those circumstances can create a wage record that does not reflect an applicant's true value. She stated that many studies show people's wages are artificially affected negatively by factors outside their control. She noted that recession scarring may include accepting lower-paying jobs, but the bill's intent is to prevent workers from being penalized because of the circumstances of life. She said she could return with several studies related to this issue. 2:18:06 PM SENATOR MYERS said he is interested in reviewing some of the material at some point. 2:18:11 PM CHAIR CLAMAN noted that the legislation attempts to strike an interesting balance. He explained that while the bill prohibits an employer from asking about previous wages, an employee is free to disclose that information voluntarily. He said the bill allows an employer to express interest in knowing an applicant's prior wages, provided the employer does not compel the disclosure. Many applicants may choose to provide that information, and there is nothing improper about that. He said the balance the bill seeks to createallowing an employee to disclose if they wish while preventing an employer from forcing the issue during the application processis a subtle distinction. 2:18:56 PM SENATOR TOBIN said that she served on the Association of Fundraising Professionals Women's Impact Initiative prior to serving with the legislature. The organization advocated for pay equity for all fundraising professionals within its membership of forty-nine thousand individuals, predominantly women. She emphasized that people are paid not for the work they have done, but for the work they will do. Employers pay for an individual's potential, not solely for past experience. She said an employer may be interested in a person's background, but the individual will be asked to perform tasks beyond the scope of that background, and it is that potential in which the employer invests. SENATOR TOBIN shared a story involving a close friend to illustrate her point. Her friend took a ten-year hiatus to raise her children and prepare them for school. When her friend reentered the workforce, her previous salary as a chief executive officer of a company was no longer competitive to present day salaries. She said that if her friend could be compelled to disclose her past salary and a potential employer based a new salary on that figure, the result would be inadequate given her experience and the value she would bring to any new position. She expressed her belief that the bill prudently ensures that individuals are protected from the wage impacts created by the various circumstances life may present. 2:20:35 PM CHAIR CLAMAN announced invited testimony on SB 78. 2:21:01 PM MIKE WALSH, Vice President of Public Policy, The Foraker Group, Anchorage, Alaska, offered the following testimony in support of SB 78: The Foraker Group serves as the state's nonprofit association and capacity builder for Alaska nonprofits. As the committed voice for Alaska's nonprofit sector, Foraker appreciates the opportunity to speak before the Senate Judiciary Committee on Senator Dunbar's SB 78: Disclosure of Wage Information. Our interest in this bill relates to the data that might emerge that helps us in our work related to gender pay equity. That's a topic we are generally genuinely dedicated to in our daily work and for the long haul. For context, part of our commitment to Alaska's nonprofit sector is to be a source of research that can be translated into policy action focused on improving the lives of Alaskans and the communities where we live. For more than two decades, Foraker has been gathering data and sharing information about the economic impact of nonprofits on Alaska's economy. We have gathered data on Alaska's nonprofit employment generally and specifically about Alaska's gender pay gap. While we recently released the most up-to-date information on nonprofit employment generally, we're also on the verge of publicly releasing our latest data on the persistent existence of that gender pay gap in Alaska. We understand that SB 78 is focused on pay transparency as it relates to the larger issue of workforce development, and not on ending the gender pay gap specifically. That being said, we know from our extensive research that one goes hand in hand with the other. In other words, pay transparency is a critical tool in addressing gender pay equity. 2:23:09 PM MR. WALSH continued his invited testimony on SB 78: In my limited time today, I simply want to reiterate that The Foraker Group supports SB 78, which will help with recruiting and retaining Alaska workers across all sectors of our economy, including the 34,000 jobs currently in the state's nonprofit workforce. Foraker has been committed to advancing pay transparency for more than a decade. We proudly model this commitment on our free job board, which is heavily utilized across the state as a trusted source of information on nonprofit employment opportunities. As part of that commitment, Foraker requires each organization that posts on the job board to list the pay range, and we explain why that's important. Beyond our own internal efforts, we know there is considerable documented research showing that pay transparency laws support all workers in their job searches. We know that filling vacant positions is time-consuming and expensive, and maximizing both the employees time and the job seekers time is in everybody's best interest. Alaska will not be the first state to incorporate pay transparency, and we certainly don't want to be the last to adopt this commonsense solution for our workforce. Thank you, Senator Dunbar, for introducing SB 78, and we look forward to sharing more ways we can all promote a healthy and vibrant Alaska workforce. Thank you for the opportunity to testify today. 2:25:04 PM CHAIR CLAMAN opened public testimony on SB 78; finding none, he closed public testimony. 2:25:29 PM SENATOR TOBIN cited statistics from the Department of Labor and Workforce Development publication, Alaska Economic Trends. She noted that the publication has long tracked the gender pay gap in Alaska and reported that Alaskan women earned seventy-six cents for every dollar earned by men in 2019. She emphasized that this disparity is not explained by differences in educational attainment, experience, or ability. She said it reflects a lack of adequate protections and transparency; factors known to influence whether women receive equitable pay. SENATOR TOBIN said the approach proposed in SB 78 aligns with the pay-transparency laws adopted in ten other states. She stated that such laws are known to help close the gender pay gap in a significant way. She noted that over a lifetime, women collectively lose an estimated $1.6 trillion in wage opportunity, which she said represents money that does not circulate through the economy, does not support gross domestic product growth, and does not help communities thrive. She stated that research shows 76 percent of women support closing the gender pay gap, with even higher levels of support among Black women and Alaska Native women. She expressed her belief that SB 78 is a prudent measure and said she hopes it advances during the legislative session. 2:27:14 PM CHAIR CLAMAN held SB 78 in committee.