CS FOR HOUSE BILL NO. 68(FIN) "An Act relating to the division of labor standards and safety; relating to the division of workers' compensation; establishing the division of workers' safety and compensation; relating to employment of a minor; and providing for an effective date." 9:34:51 AM GREY MITCHELL, DIRECTOR, DIVISION OF WORKERS' COMPENSATION DIVISION, stated that the bill proposed the merging of the Division of Worker's Compensation with the Division of Labor Standards and Safety. He remarked that the Division of Labor Standards and Safety was primarily focused on preventing workplace accidents and enforcing laws related to workplace safety and wages. He explained that the Division of Workplace Compensation was focused on the division administration of benefits. The missions of the two missions complemented the other. The divisions historically worked together, and the bill would further the ability to capitalize on efficiencies. 9:45:27 AM Co-Chair von Imhof noted the two parts of the bill. She wondered why a bill was necessary to combine the two departments when it was already being done successfully. Mr. Mitchell stated that the majority of the changes would adjust the director name of the new combined division. Co-Chair Stedman queried an impact on the fishing industry with the changes of the child labor issue. He also wondered what industries were relying on the younger people to work. Mr. Mitchell responded that the changes would not affect the fishing industry. He stated that 14- and 15-year-olds were currently prohibited from working on a fishing vessel unless that fishing vessel was owned by their parent. He stated that the main industry that employed 14- and 15- year-olds was the retail sector. Co-Chair Stedman queried more clarity on the strictness of the requirement for young people to only be employed on their parents' vessels. Mr. Mitchell replied that it was very strict. The parents must own and operate the business. Senator Olson wondered whether grandparents were included in that provision. Mr. Mitchell responded that grandparents were currently not included, but under the proposed adjustment the grandparents would be included in the exemption. 9:50:07 AM Senator Olson surmised that a grandparent who hired their grandchild who was under the age of 16, would be violating current law. Mr. Mitchell replied in the affirmative. Co-Chair von Imhof stressed that the bill addressed that issue. Senator Wielechowski wondered how much ownership a parent or grandparent would need to have in order to be considered the business owner. Mr. Mitchell replied that it was 51 percent or more. Senator Wielechowski queried the definition of "operating." Mr. Mitchell replied that the parent would be on the vessel controlling the operations of the vessel. Senator Wielechowski wondered whether the bill would exempt grandparent owned business for the protections of young people against employment in dangerous industries. Mr. Mitchell responded that the current exemption for parents applied to all child labor provisions. The proposed exemptions would exempt 14- and 15-year-olds from all of the requirements under the child labor provisions of the business owned and operated by the grandparent. Senator Wielechowski wondered whether a child work in adult entertainment business that was owned by their parent or grandparent. Mr. Mitchell agreed to provide that information. Senator Wielechowski looked at the workers compensation provision and noted that it added to the powers of the director of the division. He wondered whether it had legal meaning, or whether it codified the current goals. Mr. Mitchell replied that the provision was currently under the authorities for the Division of Worker's Compensation. He stated that it would combine the first five items of the powers of duties of the other division. Senator Bishop wondered whether there would be a sectional analysis. Co-Chair von Imhof replied that the fiscal notes would be discussed, and there could be a sectional analysis. She encouraged the asking of the question. 9:55:13 AM Senator Bishop queried the occupations of the bulk of the permits. Mr. Mitchell responded that there were 8,700 work permit applications in FY 19. He stated that approximately 8,200 were approved permits. He remarked that they were all in a variety of industries. Senator Bishop surmised that there was no change in the 23 hours a week limit. Mr. Mitchell replied that there were two standards for hourly limitations for 14- and 15-year-olds: when school is in session has a 23 hour per week limit; and a limitation that was 40 hours per week in the summer months. He stated that the standard would still apply in the current bill. Senator Bishop noted the start time for in school workers had been changed to 7am. Mr. Mitchell agreed. Senator Bishop remarked that it was currently 5am. Mr. Mitchell agreed. Co-Chair von Imhof surmised that there was not a huge change to the base labor rules for young people, but the hours were slightly different and adding grandparents. She remarked that the other part merged the two departments. Mr. Mitchell agreed. Co-Chair von Imhof felt that examination of existing laws should be done outside of the meeting. Senator Wielechowski wondered whether there was a limitation of hours for a child working for their parent or grandparent. Mr. Mitchell replied that exemption applied to all Alaska law, but did not apply to federal law. There was a similar exclusion under federal law, but it did not apply to the hazardous occupations of a business owned and operated by a parent. Co-Chair von Imhof wanted to address the fiscal note. Mr. Mitchell discussed the fiscal note. Co-Chair von Imhof commended the administration to examine efficiencies and cost savings. 10:04:53 AM Senator Bishop supported the sunset because he understood the workload. Senator Wielechowski remarked that he had a current bill that would repeal the Workers Compensation Appeals Committee that would save additional money. He queried support of an amendment to include that idea in the bill. Mr. Mitchell replied that he would consult with department leadership. Co-Chair Stedman expressed concern about whether the legislation should be expanded to include more extended family. Senator Olson echoed Co-Chair Stedman's concern. Co-Chair von Imhof discussed the following day's agenda. CSHB 68(FIN) was HEARD and HELD in committee for further consideration.