Bill would let canneries deduct housing from wages

Posted: Wednesday, March 27, 2002

JUNEAU (AP) -- Seafood processors in remote areas of Alaska want to be able to deduct the cost of room and board from the minimum wage they're required to pay workers.

The House Labor and Commerce Committee is considering a bill this week that would allow the change.

The Department of Labor and Workforce Development is ''strenuously opposed'' to the measure, Commissioner Ed Flanagan said. But Rep. Pete Kott, R-Eagle River, said seafood processors need the help.

''They've told us it's going to be very difficult for them to make ends meet this year,'' Kott told the committee Monday. He is chairman of the House Rules Committee, which introduced the bill.

Some processors can already deduct room and board, even if that means their workers' net pay falls below the minimum wage. State Labor Department regulations allow the practice in communities where workers have other housing options and voluntarily agree to the deduction.

But Richard Mastriano, director of the Division of Labor Standards and Safety, said the regulations do not allow processors to deduct room and board in remote places where workers have no other housing options, and usually no other job options.

Kott said House Bill 504 is not related to a proposal to increase the minimum wage from $5.65 an hour to $7.15 an hour next year.

The wage increase bill passed the House and is moving through Senate committees. If the measure doesn't pass the Legislature, a citizens' initiative will put the question before voters this fall.

''Within the industry right now, regardless of what happens with the minimum wage, it's a depressed situation,'' Kott said.

But Stephanie Madsen, vice president of the Pacific Seafood Processors Association, said the possible wage increase is a big concern for the association's members.

Trident Seafoods expects an impact of more than $5 million a year from the wage increase, she said.

She said processors are struggling to stay afloat while facing increased costs from many directions, including European Union import requirements and tamperproof product guidelines prompted by the Sept. 11 terrorism attacks. On top of that, the industry faces intense competition from the global farmed salmon industry.

''The bottom line in that global market is that we need to be cost competitive,'' Madsen said. ''Every increment that is added to our cost prevents us from being that cost competitive producer in the global marketplace.

''Some of you may believe that this alone doesn't throw us over the edge, but it does,'' Madsen said.

Labor Commissioner Flanagan said he sympathizes with the problems the industry is facing, but said the proposed legislation is not the answer.

''To have the brunt of the hardship that the industry is facing be borne by the low-wage workers, I think, is unconscionable,'' Flanagan said.

Mastriano said, in an interview, that the department already fields numerous complaints about former seafood workers who quit their jobs and wind up stuck in remote communities without the $800-$900 for airfare out.

Deducting the costs of their housing would exacerbate that problem by leaving them with fewer resources, he said.

Mastriano also said he's concerned many of the workers are immigrants who lack fluency in English and may not understand what they've agreed to when they take a job.

The Labor and Commerce Committee is scheduled to take up the bill again Wednesday.

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