HB 372-ELIMINATE MINIMUM WAGE EXEMPTION  9:13:16 AM CO-CHAIR SPOHNHOLZ announced that the next order of business would be HOUSE BILL NO. 372, "An Act relating to exemptions from minimum wage." 9:13:58 AM MICHAEL MASON, Staff, Representative Chris Tuck, Alaska State Legislature, introduced HB 372 on behalf of Representative Tuck, prime sponsor. He stated that HB 327 and its Senate companion bill, SB 185, would clean up an unneeded section of state law that has not been used since 2018. He explained that in 2018 the State of Alaska repealed the regulations that allowed employers to hire a worker with a physical or mental disability and pay them a subminimum wage. Despite the repeal of the regulation, the section of state law authorizing the payment of the subminimum wage remains on the books, and the bill seeks to change that. Currently, nothing is in place to stop future regulations that would allow a subminimum wage for workers with disabilities. This bill would remove all reference to those with earning capacity that is impaired by physical or mental deficiency or injury, making it no longer legal in Alaska to pay a disabled person a wage below the minimum wage. MR. MASON pointed out that, to date, Alaska, Hawaii, California, Colorado, Oregon, Texas, Washington, and several other states have eliminated these subminimum wages for people with disabilities. Also, legislation is currently pending in Georgia, North Carolina, Missouri, New Mexico, New York, South Carolina, and Virginia to eliminate or modify payment of subminimum wages to disabled persons. This bill, he continued, is important because paying a subminimum wage to those with physical and mental disabilities is a discriminatory policy. Disabled persons should be able to earn what they are worth, with the minimum wage as the floor for compensation rather than the ceiling. Disabled persons in Alaska should never be paid less than other workers based on their perceived capabilities rather than demonstrated abilities. Every day in Alaska, persons with disabilities prove those assumptions wrong. Mr. Mason read a quote from Tom Ridge, chairman of the National Organization on Disability: There is no excuse for treating an entire class of American workers differently from others based solely on the characteristics of disability, yet that is exactly what current law allows. MR. MASON noted that any proposal to exempt minimum wage must be approved by the commissioner of the Alaska Department of Labor and Workforce Development. He said HB 372 adds an additional minimum wage exemption to state law for anyone under 18 years of age who is temporarily employed by a qualified nonprofit organization. He further noted that HB 372 leaves in place the current exemptions for student learners and apprentices. He pointed out that the Alaska minimum wage is currently set at $10.34 an hour, and the federal minimum wage, which has been in place since 2008, is at $7.25 an hour. 9:17:29 AM CO-CHAIR SPOHNHOLZ asked why HB 372 allows for a minimum wage exemption for people under the age of 18 if they are employed by a nonprofit. MR. MASON responded that AS 23.10.070(1) currently reads, an individual whose earning capacity is impaired by physical or mental deficiency, age, or injury, at the wages and subject to the restrictions and for the period of time that are fixed by the commissioner. He explained that HB 372 was drafted to remove the language dealing with disability, but it was wanted to leave in the exemption based on age, so that is where the language that is being inserted was put in there. He noted that Senator Micciche spearheaded this on the Senate side, so [Representative Tuck] basically took the Senate version and introduced it in the House side. 9:18:34 AM REPRESENTATIVE SNYDER stated that she had the privilege of carrying this bill in a previous committee, and that was the very question she had asked. The answer received, she related, was that it would be appropriate in certain training settings. She requested confirmation that that is the case or that it could be the case but not in all instances. MR. MASON replied that it gives the commissioner the flexibility for those training opportunities for people 18 years or younger. REPRESENTATIVE SNYDER offered her understanding that it isnt an automatic ability to pay under minimum wage at nonprofits for those under 18 years of age; it must be an exemption approved by the commissioner. MR. MASON answered yes, any proposal to exempt minimum wage must be approved by the commissioner of the Department of Labor and Workforce Development. He said it will be heard in testimony that the minimum wage exemption for disabled persons had not been used for several years prior to 2018. 9:19:56 AM CO-CHAIR SPOHNHOLZ requested a description of the context in which an exemption for paying minimum wage for people under age 18 working for nonprofits would be appropriate and how the department currently approaches this and would intend to approach it moving forward. 9:20:21 AM TANYA KEITH, Program Manager, Wage and Hour, Labor Standards and Safety Division, Department of Labor and Workforce Development (DLWD), replied that the regulation has been removed which addressed how that specific exemption would be approved. So, currently, there isnt an exact process for that, and one would have to be developed. However, there would be strict guidelines about it, and since the provision says temporarily employed there would be a set period that they would be allowed to work. 9:21:05 AM REPRESENTATIVE SNYDER recalled hearing conversation about individuals being paid less than minimum wage at Juneaus Eaglecrest Ski Area, which she believes operates as a nonprofit. She inquired as to whether this has any relationship to the exemptions allowed under current statute and how HB 372 might change things. MS. KEITH confirmed there is a current statute that exempts individuals aged 18 and older from the Alaska Wage and Hour Act entirely, which would probably be the exemption that [Eaglecrest] is using now. REPRESENTATIVE SNYDER requested clarification as to whether there is a different exemption for those 18 and older. MS. KEITH answered yes, AS 23.10.05. 9:22:44 AM CO-CHAIR FIELDS offered his understanding that the ability to pay subminimum wage for minors is an anachronism and it is not being used right now. If it was going to be used, he continued, then new regulations would need to be promulgated to provide guidance on how to use it. MS. KEITH replied yes, under that current statute there is nobody and there is no mechanism to ask for the exemption in that. CO-CHAIR FIELDS commented that this exemption could therefore be eliminated, and it would have no impact on any actual people. It would just provide statutory clarity around something that already exists, and he is inclined to think that this should be done. It is the same situation with HB 372, he continued, because under a previous commissioner the department eliminated the regulations allowing subminimum wage payment to people with disabilities and HB 372 cleans up the statute to align with that. So, it seems exactly like the same scenario. CO-CHAIR SPOHNHOLZ agreed with Co-Chair Fields. 9:23:59 AM MR. MASON drew attention to the [3/1/22] memorandum from the sponsor to the House Judiciary Standing Committee regarding the Alaska Wage and Hour Act. Regarding Representative Snyders question, he said the memorandum includes the exemptions that were listed under AS 23.10.050. 9:24:31 AM CO-CHAIR SPOHNHOLZ opened invited testimony on HB 372. 9:24:43 AM MYRANDA WALSO, Acting Executive Director, Governor's Council on Disabilities and Special Education (GCDSE), provided invited testimony in support of HB 372. She stated that as the State Council on Developmental Disabilities (state DD), GCDSE works with community and other state agencies to ensure that people with intellectual and developmental disabilities (I/DD) and their families receive the services and supports that they need, as well as participating in the planning and design of those services. MS. WALSO noted she is joined today by several GCDSE council members and self-advocates. However, she continued, one member, Corey Gilmore, chair of the Community Inclusion, Supports, and Services Committee, could not attend due to his assisted living facilitys schedule which governs when he is able to get out of bed in the morning and provides the transportation he depends on for basic care. She said challenges like this are an incredible barrier and are the reality that Mr. Gilmore faces every day, including affecting his participation in the public process. She related that Mr. Gilmore believes passionately in HB 372 and his written testimony has been submitted to the committee. MS. WALSO specified that since the federal minimum wage was established in 1938, a special reduced compensation rate known as the subminimum wage was allowed for those with disabilities, which lets employers holding a 14(c) certificate from the US Department of Labor to pay those with disabilities less than the federal or state minimum wage using worker productivity rates as the sole factor for evaluating the performance of those with disabilities. She said this discriminatory method determines compensation only for those with disabilities and requires that they measure up to a standard their non-disabled coworkers are not evaluated on nor held to. What if all individuals over the age of 65 had to prove they deserved to earn minimum wage at their job, but younger individuals did not? she asked. This scenario, she argued, is just as archaic as this provision in Alaska law which holds to the notion that those with a disability do not have the same standing in the job market as their non-disabled peers, regardless of the quality of their work, talents, or skills. MS. WALSO pointed out that [new] federal, state, and local policies have developed over the decades. At the federal level, she said, the new understanding is reflected in the Americans with Disabilities Act, the Individuals with Disability Education Act, the Workforce Innovation and Opportunity Act, and others. In Alaska, the Employment First Act requires vocational services be provided to help people with disabilities become gainfully employed at or above the minimum wage. In 2018, the regulations enacting subminimum wages for those with disabilities was repealed, but the issue remains unsettled. She said GCDSE supports repeal of the statutory provision allowing any such regulations to be reintroduced in the future. 9:28:25 AM HEIDI LIEB-WILLIAMS, Chair, Governor's Council on Disabilities and Special Education (GCDSE), provided invited testimony in support of HB 372. She shared that she has multiple disabilities but has broken barriers and received awards. She said those with disabilities have gifts and talents to offer, their work is just as valuable as that of others, and they should be paid fairly for their time and knowledge. Being judged based on a disability and being offered less pay than someone is worth is demeaning, she continued. People often define themselves to have purpose in life by doing work that serves others in the community and it matters that they are paid accordingly for making a difference to other Alaskans. MS. LIEB-WILLIAMS read a statement from Mr. Corey Gilmore: In 2018 we advocated for the DD shared vision, which put Alaskans receiving services in charge of their own care, and this bill is the next step in realizing the vision for all of Alaska. Not only does the vision give us the right to direct our own care but the repeal of the subminimum wage further solidifies that we are competent Alaskans with something to offer our state. She urged the committee to do what is right for a better future in Alaska. 9:31:03 AM CO-CHAIR SPOHNHOLZ thanked Ms. Lieb-Williams for her work as chair of the Council and congratulated her for the awards she has received. 9:31:28 AM RIC NELSON, Chair, Self-Advocacy and Leadership Committee, Governor's Council on Disabilities and Special Education, provided invited testimony in support of HB 327. An assistant read from Mr. Nelsons written statement as follows: This bill is so important because all people no matter their disability should get paid at least minimum wage to do the same job as their able-bodied peers. Having a law that singles someone out as not deserving the same pay solely because of their disability is dehumanizing. As a person with a disability who has worked hard to have a successful career and earned a master's degree, I find that this statute reinforces the misconception that individuals with disabilities are somehow a liability for an employer. Keeping this statute sends the message that Alaska is the land of opportunity only if you are not disabled. 9:33:08 AM MR. NELSON, responding to Co-Chair Spohnholz, stated that his masters degree is in Public Administration. CO-CHAIR SPOHNHOLZ thanked Mr. Nelson for his service to Alaska through the Governor's Council on Disabilities and Special Education. 9:33:59 AM CO-CHAIR SPOHNHOLZ announced that HB 372 was held over.