An Act relating to the computation of overtime; and providing for an effective date.

If an employer finds it necessary to employ an employee in excess of 40 hours a week or eight hours a day, compensation for the overtime at the rate of one and one-half times the regular rate of pay shall be paid.

The court's decision is contrary to the interpretation always used by Alaska's Department of Labor and to the understanding of Alaska's employers. The court's decision has ignored the historical application by Labor and all employers in the State.

The best way to bring the problem to the forefront is to give an example of what will happen under the court's decision:

Assume Employee worked the following schedule for a total of 43 hours:

As to Monday, everyone agrees that Employee is entitled to 3 hours of overtime. The issue is as to Friday. Under the Department's interpretation and the interpretation of employers, no overtime would be due as to Friday since Employee worked 43 hours during the week and has already been paid for 3 hours overtime. Under the Court's ruling, Employee would receive overtime for 3 hours on Friday because in computing the 40 hours under the statute, one must include the 3 overtime hours worked on Monday. Consequently, Employee received 6 hours of overtime pay for the week even though he/she only worked 43 hours. Such a system as the court's interpretation would allow is referred to as "pyramiding".

CSHB 201 (FIN) am would clarify that the Employee above would only receive pay for the 3 hours of overtime worked. This would statutorily clarify the law and its interpretation for all involved, including the courts. Failure to correct the court's interpretation will have significant impacts on all Alaskan businesses.

During consideration of this legislation by House committees, the Department of Labor expressed its strong support for this legislation.

We urge your support of this legislation.