Alaska witnesses, contractors and labor groups urge stronger enforcement and reporting for wage theft in House Bill 97 hearing

Anchorage — Supporters of House Bill 97 told the Alaska House Judiciary Committee on April 2 that wage theft and worker misclassification are widespread in construction and other industries and that the bill’s enforcement provisions could give investigators better tools.

Bronson Frey, president of the Building and Construction Trades Council of South Central Alaska, said wage theft is “a plague in the construction industry,” and described a system in which the Department of Labor typically investigates only when the aggrieved employee files a claim: “right now, the Department of Labor only investigates wage claims if they are brought forward by the aggrieved employee themselves.”

The nut graf: proponents including union leaders, contractors and jobsite representatives urged the committee to add or preserve measures in House Bill 97 that would (1) broaden who can trigger investigations, (2) strengthen penalties or debarment for repeated violations on public projects, and (3) provide tools for investigating suspected patterns of misclassification and cash pay that can mask unpaid wages or human‑trafficking indicators.

Several invited witnesses described common practices they say undercut law‑abiding employers. Michael Gould, president of Excel Construction, said some firms pay workers in cash or misclassify employees as independent contractors to lower labor costs and avoid payroll taxes and workers’ compensation. Jesse Sumner, a former House Judiciary Committee member, testified that misclassification and cash payroll are common in residential construction and reduce legal protections for injured workers and for creditors such as child‑support collectors.

Chris Diamond, lead representative for the Western States Regional Council of Carpenters, testified about investigations his organization has supported and said such schemes can involve transportation, withheld identification, and pay on check‑cashing cards. “I bet 95 percent of all construction workers have experienced some form of wage theft,” Diamond told the committee, and urged more accessible, anonymous reporting and stronger enforcement staff for the Department of Labor.

Department of Labor testimony described how wage claims and public‑project prevailing wage audits are handled. Jeremy Applegate, chief of Wage and Hour, said the department accepts third‑party referrals and can dispatch investigators after a tip; for a formal Title 23 wage claim the department generally asks the aggrieved worker to file a claim so the department can pursue it on the worker’s behalf. Applegate said the statute of limitation for minimum wage and overtime claims is two years and that the department aims to resolve claims within six to 12 months on average, though complex cases or a large number of claims against a single employer can lengthen that timeline. Applegate also said prevailing‑wage audits can trigger debarment of contractors from public bidding when violations are found.

The Department of Law told the committee it does not conduct routine criminal wage investigations. John Skidmore, deputy attorney general, said the Department of Labor currently conducts criminal‑type investigations and may refer matters to the Department of Law, but he told lawmakers he could not identify criminal wage prosecutions in recent years: “I don’t remember a case ever being referred to us,” he said when asked about criminal enforcement under existing statutes.

Committee members pressed both agencies about enforcement capacity and practical barriers. Members repeatedly asked whether third‑party complaints were accepted (Applegate said they are), how the department handles cash‑under‑the‑table situations when records are thin (Applegate said those cases are difficult to pursue when no documentation exists), and whether longer lookback periods in the bill would conflict with existing limitation periods (Skidmore said the bill’s aggregation language would change the legal proof required and might broaden the period prosecutors could consider).

Public testimony echoed invited testimony. Patrick Fitzgerald of Teamsters Local 959 described recurring payroll errors and employer practices that repeatedly underpay workers and said the union supports the bill as drafted. Ryan McGovern of the United Association testified about overtime disputes on federal and state projects and said identifying the applicable wage determination for some federal contracts can be difficult in practice.

The committee did not take a vote during the hearing. Advocates urged lawmakers to couple any new criminal or civil penalties with resources for Wage and Hour investigators, a prominent tip line for workers, and mechanisms to protect workers who are fearful of retaliation.

Ending: The committee moved House Bill 97 aside after public testimony and continued with other agenda items. The bill remains under consideration and lawmakers asked departments for follow‑up information on enforcement capacity, average times to resolution, and whether additional administrative or legislative tools would be needed to implement the bill’s proposals.