SB 185-ELIMINATE MINIMUM WAGE EXEMPTION  1:32:19 PM CHAIR COSTELLO announced the consideration of SENATE BILL NO. 185 "An Act relating to exemptions from minimum wage." 1:33:16 PM SENATOR PETER MICCICHE, speaking as sponsor of SB 185, stated that this legislation repeals the unfair minimum wage exemption in AS 23.10.070 that justifies paying a substandard wage for anyone who has a physical or mental disability or is impaired by age or injury. The regulations have been changed but the offensive language remains in statute and essentially creates two classes of Alaskans: those who deserve a fair wage because they do not have any impairment and those who do not deserve a fair wage because they experience a physical or mental deficiency or are impaired by age, or injury. He related that when the Governor's Council on Disabilities and Special Education brought this issue to his attention he was surprised and offended to see that language in statute. SB 185 removes that offensive language. He said the bill also added a provision for a community group to pay less than minimum wage to individuals who are younger than 18 years old when they work on short-term special projects. SENATOR MICCICHE summarized that SB 185 removes offensive language from statute and recognizes that Alaskans with disabilities are equal on the job. 1:35:30 PM At ease 1:36:16 PM CHAIR COSTELLO reconvened the meeting and asked Ms. Govin to go through the sectional analysis for SB 185. 1:36:26 PM MADISON GOVIN, Staff, Senator Peter Micciche, Alaska State Legislature, Juneau, Alaska, presented the sectional analysis for SB 185 on behalf of the sponsor. [Original punctuation provided.] Section 1-Sec.23.10.070-Page 1, Line 8-9  Inserts a minimum wage exemption for an individual under 18 years old who is temporarily employed by a 501 (c)(3) non-profit organization. Section 1-Sec.23.10.070-Page 1, Line 10-11  Deletes the minimum wage exemption for anyone whose earning capacity is impaired by physical or mental deficiency, age, or injury. CHAIR COSTELLO mentioned who was available to answer questions. 1:37:06 PM SENATOR GRAY-JACKSON thanked the sponsor for bringing the bill forward. She asked for further explanation of the language that the bill adds to statute. 1:37:40 PM TANYA KEITH, Supervisor, Wage and Hour, Division of Labor Standards and Safety, Department of Labor and Workforce Development (DOLWD), Anchorage, Alaska, offered her understanding that the added language would provide an exemption for a minor who is temporarily employed by a nonprofit organization. SENATOR GRAY-JACKSON summarized her understanding that somebody who is age 18 or younger and employed by a nonprofit can be paid differently than somebody who is older than age 18 and is employed by another agency. MS. KEITH further explained that the exemption would not be automatic. Rather, the nonprofit would have to request the exemption from DOLWD and the commissioner would have to approve the request. CHAIR COSTELLO said her reading is that the commissioner would establish in regulation the amount individuals would be paid. MS. KEITH said that's correct. The regulation attached to the statute was eliminated years ago, so if the bill were to pass a regulation would have to be written to address how to apply for the exemption and how it would be approved. She added that the regulation would stipulate how low the wage could be. CHAIR COSTELLO directed attention to the language on page 1, line 6 that says, "by regulation or order." She observed that the implication is that a nonprofit could hire somebody 18 years old or younger and with a commissioner's order know almost immediately what wage it could pay. MS. KEITH replied that was her reading as well. 1:41:05 PM SENATOR MICCICHE provided a hypothetical example to explain his goal. He described a Boys and Girls Club planter box project in the City of Kenai that sought to teach young people how to garden and to demonstrate the financial benefit of hard work. He noted that there is a way for young people to volunteer to work on certain projects, but he didn't know whether they could be compensated with something like a gift card that would be equivalent to less than minimum wage. He asked Ms. Keith to comment. He summarized that his goal was to encourage community groups to demonstrate to young people that hard work results in some level of compensation, although not technically a minimum wage job. 1:42:43 PM MS. KEITH explained that AS 23.10.05(a)(11) provides an exemption from the Wage and Hour Act for somebody who is younger than age 18 and is employed for not more than 30 hours a week. These individuals may be paid as little as the federal minimum wage. SENATOR STEVENS expressed concern that the bill could result in the loss of jobs or fewer jobs being available to individuals with disabilities. He relayed his knowledge of an instance where a municipality was able to give a young man who had mental and physical disabilities a job, but it was not equal to that of a fireman and the young man was paid less than minimum wage. 1:45:07 PM SENATOR MICCICHE advised that in February 2018 [DOLWD] repealed Section 8 ACC 15-120 and it became illegal to hire somebody with a disability at less than minimum wage. SB 185 updates the statute to reflect that change. He restated that he finds it offensive that this is in statute even though it hasn't been used for over four years. He added that there are ways for an organization to get assistance to employ individuals with a disability. Young people deserve to be treated like everyone else on a minimum wage basis. SENATOR STEVENS said his concern is about potentially leaving some individuals behind. 1:47:26 PM CHAIR COSTELLO reported that the Alaska minimum wage is $10.34 per hour and that it will go up next year. The federal minimum wages is $7.25 per hour. She asked Ms. Keith to talk about the law that stipulates that individuals may not be paid less than the federal minimum wage. MS. KEITH said [AS 23.10.055 (a)(11)] says that "an individual under 18 years of age employed on a part-time basis not more than 30 hours in a week" could be exempt from the Wage and Hour Act. The law also provides that somebody who works less than 30 hours per week may not be paid less than the prevailing federal minimum wage. CHAIR COSTELLO asked if she had information about what jobs are paying less than minimum wage and what the current job market looks like, because employers like Fred Meyer in her community are paying much more than minimum wage and seem to be having difficulty finding workers. 1:49:33 PM MS. KEITH agreed that in most cases employers are paying more than minimum wage because employees won't work for less. CHAIR COSTELLO asked her to talk about the philosophy behind paying someone who is younger than age 18 years less than minimum wage. MS. KEITH said she's read anecdotally that the rationale for paying individuals who are 14-18 years of age less than minimum wage is that they potentially need additional oversight. CHAIR COSTELLO asked the sponsor if the intention is to help the nonprofit save money by paying less for the work it wants done. 1:51:09 PM SENATOR MICCICHE replied that was not his intention. The idea is to provide an opportunity for young people to see that there is value in hard work. Some of the organizations want to support the community and participate but they have very little money to pay for small, short-term projects. CHAIR COSTELLO asked Ms. Keith if there are Wage and Hour Act considerations if a young person wants to volunteer their services for either a nonprofit or for-profit organization. MS. KEITH replied there are instances where somebody may volunteer for a nonprofit but not for a for-profit business. 1:52:57 PM SENATOR STEVENS said, at some point, he would like to hear from municipalities. CHAIR COSTELLO said she'd make sure that happens. 1:53:18 PM CHAIR COSTELLO turned to invited testimony. 1:53:32 PM HEIDI LIEB-WILLIAMS, Chair, Governor's Council on Disabilities and Special Education, Provided invited testimony in support of SB 185. She stated that she is a national speaker advocate who experiences multiple disabilities and has also broken barriers. She submitted the following statement from her heart: We all have gifts and talents to offer and our work is just as valuable as what others bring to the table, and we should be paid fairly for our time and knowledge. It is demeaning that someone could just look at a person and judge them on the basis of their disability, and offer them less than they are worth. As Alaskans, we are better than that and this repeal will help us all acknowledge the [Developmental Disabilities Shared Vision] law becoming reality. How can you be an adult and say that you can judge others based on your automatic perception of what someone can do, rather than teach them how, just like you would someone else, and have them demonstrate their capabilities to soar to new heights. Nobody is going to be left behind, but propelled forward based on sole ability to treat them with human dignity with this law being nonexistent. People often define themselves to have purpose in life by doing work that serves others in the community by what they're contributing as the daily job. That matters. To pay them accordingly for doing things that make a difference to other Alaskans. MS. LIEB-WILLIAMS thanked the committee for the opportunity to testify and expressed optimism that it would do what is right for a better future in Alaska. 1:56:16 PM COREY GILMORE, Chair, Community Inclusion, Supports, and Services Committee, provided invited testimony in support of SB 185. He related that wherever he goes he is judged by the way he speaks, looks, and moves. In fact, when he goes to a restaurant his staff has to remind the wait person that he can order for himself. He said this is irritating to say the least but they don't know any better. The statute that SB 185 removes was written by people who also didn't know any better. MR. GILMORE stated that Developmental Disabilities Shared Vision says Alaskans who experience disabilities have the right to run their own lives and to dream big enough to have not just a job but a career. People who experience disabilities deserve to have a career if that is what they want. He shared that if he were to have kids, he would want them to know that he and others have helped to make Alaska better than it was because they know better. 1:59:18 PM RIC NELSON, Chair, Self Advocacy and Leadership Committee, Governor's Council on Disabilities and Special Education, Department of Health and Social Services (DHSS), testified by invitation in support of SB 185. Mr. Nelson's assistant read the following: This bill is so important because all people, no matter their disabilities, 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 this statute reinforces the misconception that individuals with disabilities are somehow a liability for an employer. Keeping this statute sends a message that Alaska is the land of opportunity, only if you are not disabled. 2:01:42 PM MYRANDA WALSO, Acting Executive Director, Governor's Council on Disabilities and Special Education, Department of Health and Social Services (DHSS), testified by invitation in support of SB 185. She explained that the council works with communities and other state agencies to ensure that people with intellectual and developmental disabilities and their families receive the services they need. These individuals also participate in the planning and design of the services. MS. WALSO relayed that the [Fair Labor Standards Act of 1938] established the federal minimum wage. The Act included the Subminimum Wage Provision that allowed employers with a certain certificate to employ individuals with a physical or mental disability at less than the authorized minimum wage. The basis for this was the notion that individuals with a disability had less capacity for productivity. This is discriminatory and requires disabled workers to be measured by a standard that nondisabled workers are measured by. Employers in past generations were able to exploit workers who were deemed lesser. That outdated notion is out of step today and the statute that SB 185 seeks to repeal is similarly out of step. It holds to the same notion that people with disabilities do not have the same standing in the job market as their nondisabled peers. There is a new understanding through the Americans with Disabilities Act (ADA), the Individuals with Disabilities Education Act (IDEA), and the Workforce Innovation and Opportunity Act (WIOA). Alaska has enacted the Employment First policy that requires that individuals with disabilities receive vocational services to help them become gainfully employed at or above the minimum wage. As previously mentioned, the regulations enacting subminimum wages for individuals with disabilities were repealed, but the statute remains. MS. WALSO emphasized that it is not acceptable for public policies to remain in effect when they conflict with the basic premise that people with disabilities are valuable members of society and have a right to participate in all aspects of life, which means gainful employment and the pursuit of economic self- sufficiency. 2:04:51 PM CHAIR COSTELLO opened public testimony on SB 185; finding none, she closed public testimony. 2:05:10 PM CHAIR COSTELLO held SB 185 in committee for future consideration.