HOUSE LABOR AND COMMERCE STANDING COMMITTEE January 21, 1993 1:30 p.m. MEMBERS PRESENT Rep. Bill Hudson, Chairman Rep. Joe Green, Vice Chairman Rep. Eldon Mulder Rep. Brian Porter Rep. Bill Williams Rep. Joe Sitton Rep. Jerry Mackie MEMBERS ABSENT None OTHER LEGISLATORS PRESENT Rep. Jerry Sanders COMMITTEE CALENDAR Overview of the Department of Labor WITNESS REGISTER Charles Mahlen Commissioner Department of Labor P.O. Box 21149 Juneau, Alaska 99802-1149 Phone: 465-2700 Jan Hart De Young Administrator/Hearing Examiner Department of Labor Alaska Labor Relations Agency P.O. Box 107026 Anchorage, Alaska 99510-7026 Phone: 264-2587 David Teal Director Department of Labor Division of Administrative Services P.O. Box 21149 Juneau, Alaska 99802-1149 Phone: 465-2720 Judy Knight Director Department of Labor Division of Employment Security P.O. Box 25509 Juneau, Alaska 99802-25509 Phone: 465-2712 Donald Study, CSP Director Department of Labor Division of Labor Standards and Safety P.O. Box 21149 Juneau, Alaska 99802-1149 Phone: 465-4855 ACTION NARRATIVE TAPE 93-2, SIDE A Number 001 CHAIRMAN BILL HUDSON convened the House Labor and Commerce Committee meeting at 1:34 p.m. on January 21, 1993. Members present were Rep. Joe Green, Rep. Brian Porter, Rep. Eldon Mulder, Rep. Jerry Mackie and Rep. Joe Sitton. Chairman Hudson introduced CHARLES MAHLEN, COMMISSIONER OF THE DEPARTMENT OF LABOR. Number 034 COMMISSIONER MAHLEN introduced the division directors and gave the following outline of the Department of Labor, including some of its goals: 1) foster and promote the welfare of the wage earners of the state; 2) improve their working conditions and advance their opportunities through profitable employment; 3) provide a healthy and stable workforce upon which economic development can thrive; 4) assist Alaskan employers to operate in a cost effective manner; and 5) minimize the impact the unemployed worker has on the social services. COMMISSIONER MAHLEN stated that the population was calculated at 586,900, with the workforce at 262,200. Last year there was a 1.7 percent increase in the workforce. The department's budget had been reduced an average of 4.8 percent a year for the last three years. The department's budget accounted for 1/2 of one percent of the state's general fund. COMMISSIONER MAHLEN stated that over 95 percent of the Division of Employment Security was funded by the federal government. A large portion of the Division of Administrative Services' budget came from federal funds. COMMISSIONER MAHLEN reviewed the budget reductions the department had implemented. In 1993 the department laid off four employees, deleted fifteen vacant positions, and eliminated the mid-management positions of assistant directors and some chiefs. This was in reply to the efficiency task force's recommendation to increase spans of control for managers and supervisors. COMMISSIONER MAHLEN said the department will have to reduce occupational safety inspections, wage and hour audits, investigations, and personnel, and absorb some clerical and accounting functions to operate under the prescribed budget. COMMISSIONER MAHLEN outlined the anticipated budget reductions for fiscal year 1994: one clerical position from the commissioner's office; eliminate some printing costs from administrative services; and the Division of Labor Standards and Safety will have to reduce contractor licensing, investigations and enforcement. According to COMMISSIONER MAHLEN, the department has a capital request for computer equipment that will help automate and make the programs more efficient. COMMISSIONER MAHLEN explained that further cuts will be deletion of the grant to the Alaska Health Project, combining some certification programs, and eliminating funding for the Alaska Safety Advisory Council. The department will also eliminate the review of compromise and release decisions in the Workers Comp Division, which will take legislative action. COMMISSIONER MAHLEN explained the goal is to make the department as efficient as possible and still remain as effective as possible. COMMISSIONER MAHLEN said the department also recommends: transferring the fish bonding program to the department of Revenue; legislation to allow the licensing of the electrical and mechanical administrators; and implementation of some user fees to offset declining general fund money. Number 275 COMMISSIONER MAHLEN noted further legislation recommended by the Department of Labor: 1) extend the State Training and Employment Program (STEP) for another three years; 2) increase the Labor Relations Board from three to six and provide for a $100.00 honorarium; and 3) allow the Federal Mediation Service to provide free mediation service in Alaska Railroad cases. Commissioner Mahlen's concluded his overview. Number 399 CHAIRMAN HUDSON opened the meeting for questions. REP. JOE GREEN asked for the overall responsibilities of the Department of Labor. Number 410 COMMISSIONER MAHLEN offered that some of the more detailed information would be outlined when the division directors gave their overviews. Number 426 REP. GREEN inquired how the budget cuts referenced would impact the broad scope of duties the Commissioner had outlined. Number 440 COMMISSIONER MAHLEN explained that the department does not touch the divisions that recieve federal money. The cuts only come in areas that are funded from the general fund. Number 450 REP. JOE SITTON commended the Department of Labor. He explained that for the past six or seven years he had followed the department's budget and had found that they provided the most benefit for the dollar. He further stated that they had the second lowest budget of any state department. Rep. Sitton asked for more information from the Commissioner regarding how the budget reductions related to the handling of Title 36. Number 460 CHAIRMAN HUDSON suggested that the directors address that area of concern as they give their overviews. Number 463 CHAIRMAN HUDSON asked the Commissioner to give a listing of those areas where legislation might be introduced. He also asked for more information about the transfer of the fish bonding the Commissioner referenced. Number 480 COMMISSIONER MAHLEN explained the transfer was one way the department figured it could streamline state government. Number 485 CHAIRMAN HUDSON stated that the committee's focus would be to look into just that sort of thing. He expressed his desire to work closely with the department to find ways to make government more of an asset than a liability to the business people of Alaska. The chairman also expressed his hope that the department would recognize that the committee was really looking for how the actions of the department would impact a business person. He said the committee needed to make certain that whatever government was paying the department to do was truly in the public's best interest, that it was absolutely necessary. A periodic review of the laws is necessary, according to Chairman Hudson. Number 497 COMMISSIONER MAHLEN agreed and stated that the department was moving closer and closer toward more vital necessary functions. The department felt that a good, trained, qualified labor force, with good working conditions and good wages, was good for Alaska's economy and promoted economic development. Number 502 CHAIRMAN HUDSON asked the Commissioner, if the committee were to ask some of the department's clients for a report card on the department, how would they fare? Number 518 COMMISSIONER MAHLEN assured the committee that the department had and would continue to streamline, privitize, reduce and do whatever they could to provide the most services for the least amount of money. Number 543 CHAIRMAN HUDSON asked that Commissioner Mahlen put a concept in writing regarding expanding the contributions of the state sector. Number 555 COMMISSIONER MAHLEN responded that he had a position/mission statement. Number 570 JAN HART DE YOUNG, ADMINISTRATOR, ALASKA LABOR RELATIONS AGENCY, DEPARTMENT OF LABOR, explained that the agency is part of the Commissioner's office. The agency operates with four staff, including the administrator and a three member volunteer board. TAPE 93-2, SIDE B Number 000 According to MS. DE YOUNG, the agency is responsible for administering the Public Employment Relations Act and the Railroad Labor Relations Act. The agency covers all public employers in the state, with the exception of those municipalities which have exercised the option to reject the application of the act. MS. DE YOUNG said the agency's principal role is to referee disputes between organized labor and public employees. The agency's methods can be informal (through conciliation) or formal (through quasi-judicial administrative hearing). The basic mission is to promote labor harmony between government employers and government employees with the ultimate goal to allow energy and time to be focused on the public's business rather than labor disputes. MS. DE YOUNG explained that with the contraction of government budgets the agency has seen a huge increase in labor difficulties. The agency had a 67 percent increase of claims between calendar year 1991 and 1992. The agency has adopted a comprehensive policy and procedures manual and a comprehensive rewrite of the regulations, which has assisted in handling the increased case load. MS. DE YOUNG noted that the Alaska Labor Relations Agency consolidated the railroad labor regulations with the state labor relations regulations so there would be a uniform set of regulations to apply to the public sector. These are presently under review in the Attorney General's office. MS. DE YOUNG said the budget was currently at a maintenence level and would remain so. The agency relies increasingly on the use of teleconferencing and reducing the travel expenses to make up for any shortfall. MS. DE YOUNG stated that the agency will provide an annual report with statistics to the committee after the February board meeting. Number 061 REP. BRIAN PORTER asked, Of the 100 complaints, what was the percentage between management and labor? MS. DE YOUNG responded that she had not tracked that particular statistic. Number 077 REP. SITTON asked if the agency ever explored the idea of charging the agency's costs back to those who filed frivolous complaints. Number 084 MS. DE YOUNG explained that the agency is governed by the Administrative Procedures Act, which does not provide the authority to assess costs and fees. Number 115 DAVID TEAL, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF LABOR, explained the division is responsible for the internal working of the department. The management services section of the division has 33 employees and does the payroll, personnel training, budget monitoring and preparation, grants monitoring, bill paying, mailroom, supplies, and procurement. According to MR. TEAL, another function of the division is the research and analysis section, which provides the following information and services: economic rorecasts and analysis, wage rate survey, publications and typesetting support, news releases, policy analysis, planning assistance, clerical and administrative support, as well as special information requests and reports. Number 215 CHAIRMAN HUDSON inquired where the information produced by research and analysis is deposited. MR. TEAL explained that the information is transmitted to the state library in some form and much of the information is published and available from the research and analysis section of the division. Number 265 REP. PORTER asked what the length of residency was that the division used in their research. MR. TEAL replied that the residency requirement was 30 days, but the division uses the permanent fund file to a great extent; so in actuality, the data was one year. Number 275 REP. ELDON MULDER inquired what the total budget was for the department, and what were some of the other sources of funding. COMMISSIONER MAHLEN pointed out that the money from the general fund only constitutes 1/2 of one percent of the general fund. MR. TEAL interjected that some funds come from other state agencies. Number 352 JUDY KNIGHT, DIRECTOR, DIVISION OF EMPLOYMENT SECURITY, DEPARTMENT OF LABOR, spoke to the committee regarding the mission and goals of her office. She said the mission as they saw it was to "promote employment and economic stability by meeting the needs of employers and job seekers statewide." MS. KNIGHT noted, to this end, the employment office had three main goals: 1) to provide an effective labor exchange; 2) to coordinate with employment and training entities; and 3) to support Alaska's economic growth and development. MS. KNIGHT went into detail regarding the size of her division and the number of unemployed persons coming to the employment service. She noted that in Fiscal Year 1992, 100,000 persons came through the employment offices looking for jobs. She pointed out that there are only approximately 500,000 people in the state. Ms. Knight commented that the number was significantly up; three years ago the number of persons utilizing the employment office was 60,000. Number 443 REP. GREEN asked if those were all people residing in the state. MS. KNIGHT responded, "Yes, they were all individuals and not repeat clients." She added that the office maintains 800 numbers for the benefit of rural areas that don't have an employment office. Number 554 MS. KNIGHT noted there had been a significant increase in unemployment. The agency paid 61,550 people benefits last year, which added up to $152,000,000. Ms. Knight further noted that the unemployment scene did not look like it would change in the near future. MS. KNIGHT said she was very concerned about the workforce in Alaska. She noted that her office sees more and more people who simply don't have work skills or work ethics; in short, they don't have a clue about what work is. Ms. Knight noted that the employment service is working towards educating young people in this area. The agency has created a partnership between the Job Training Partnership Act, the employment agency, and some schools to test a pilot program to teach kids the skills they need out of high school. Number 624 DON STUDY, DIRECTOR, DIVISION OF LABOR STANDARDS AND SAFETY, DEPARTMENT OF LABOR, spoke to the committee regarding the division's primary mission, which is to oversee and provide for the health and safety of Alaskan workers and the citizens of this state. He said the division is made up of three sections - occupational safety and health, mechanical inspection, and wage and hour. TAPE 93-3, SIDE A Number 001 MR. STUDY explained that the occupational safety and health section enforces safety and health regulations and standards to protect employees from work related injuries and illnesses and assists employers in developing workplace safety programs by providing consultation and training services. MR. STUDY noted that the mechanical inspection section oversees the safe installation of mechanical facilities for the safety of the workers and the public, and inspects existing facilities such as elevators, escalators, amusement rides, boilers, pressure vessels and plumbing. MR. STUDY said the wage and hour program was modeled after the federal Fair Labor Standards Act. The program includes the enforcement of minimum wage and overtime, the collection of wage claims, the enforcement of child labor laws, and the enforcemnt of return transportation rights. It also includes the licensing and monitoring of private employment agencies, and the enforcment of the Public Contracts Act and the conduct of the wage survey, the enforcement of construction contractor licensing, and enforcement of resident hire on a statewide basis. Number 320 CHAIRMAN HUDSON asked that the rest of the overview be held at another time since the committee was pressed for time. ADJOUNMENT The meeting was adjourned by Chairman Hudson at 3:20 pm.