An Act relating to a short-term exemption from the minimum wage for newly hired young employees.

Posted: February 24, 2000
Contact: Representative Norman Rokeberg at (907) 465-2040

House Bill 370 would permit an employer to pay an employee under age 20 at 85% of the Alaska minimum wage during the first 90 consecutive calendar days the employee is initially employed. An employer is not permitted to take any action to displace employees, including reduction in hours worked, wages, or employment benefits, to hire individuals at the wage authorized by this legislation.

Alaska has job training statutes and regulations for a training wage [AS 23.10.070(2) & (3) for exemptions from minimum wage]. A program must be submitted for approval from the Commissioner of the Department of Labor and Workforce Development (Office of the Commisioner). Alaska has never used these provisions. The Federal Labor Standards Act (FLSA) allows states to develop their own job training wage with the under 20 provisions included in HB 370. These provisions are self-enforcing and do not require affirmative action by the Department. The FLSA provides that the less than minimum wage must be at least $4.25. Under HB 370, with Alaska's current minimum wage level, the Alaska standard would be $4.80. However, it is anticipated that Alaska's minimum wage will be raised in the near future by initiative, Congressional action, or by the Legislature.

Research by the Legislative Affairs Research Division indicates that the most commonly used exemption for the minimum wage is for persons under 20 to be paid at a lower rate for their first 90 days. After 90 days or when the worker reaches 20, whichever comes first, the worker must receive the minimum wage.

The following states have some provisions for subminimum wage for persons under 20: Arizona, Arkansas, California, Colorado, Connecticut, Idaho, Illinois, Indiana, Iowa, Maryland, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, North Carolina, Pennsylvania, Rhode Island, South Dakota, Texas, Utah, Vermont, Virginia, Washington, West Virginia, and Wisconsin.

The payment of less than the minimum wage to those under 20 is limited to the first 90 days. That time period may be thought of as one where the employer decides whether the young worker will make a good addition to the business and the employee can decide if he or she is willing to continue to work for the employer. Additionally, the new employee has an opportunity to be trained for the new position while the employer has the opportunity to train a person while paying less than Alaska's minimum wage.

I urge your support of this legislation.

Sectional Analysis for HB 370