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Alaska subpoenas oil company accounting, employment records
Matt Volz, Associated Press Writer
The state of Alaska has subpoenaed records from Alaska’s major oil producers to determine where their employees live, how the workers are classified and whether all paid wages have been reported, Labor Commissioner Greg O’Claray said Jan. 7.
At least four oil companies operating in Alaska are being audited, O’Claray said, although he declined to name them. Two companies — BP and ConocoPhillips — told The Associated Press their records had been subpoenaed.
The companies have until Jan. 24 to make their records available to department officials.
The audits are being conducted to find out whether the companies are following an administration initiative that calls for a company’s work force to be made up of at least 90 percent Alaska residents, O’Claray said.
The industry has too many nonresident workers in high-paying jobs, he said, although he acknowledged that Gov. Frank Murkowski’s Alaska Hire initiative is a policy, not a law, and that companies cannot be punished for falling short of the 90 percent threshold. Independent contractors will be investigated But the investigation will also look at whether the companies are reporting all the wages paid for services in Alaska and whether workers who are hired as independent contractors have been misclassified.
Classifying a worker as a contractor and not an employee allows a company to avoid paying some taxes and paying into the state’s Unemployment Insurance Trust Fund, according to the Department of Labor and Workforce Development.
O’Claray said he has seen anecdotal evidence of misclassified workers and said the audits will provide department officials with the knowledge of whether there is a problem.
“The more we turned over a rock, the more complaints we found,” O’Claray said. “The reason the tax auditor hit those companies was not to give them a hard time, but to find out” the facts, he said.
He said department records show that out of the 3,975 workers on the North Slope last year, 825 were not Alaska residents. The nonresidents averaged about $10,000 more a year in salary than resident Alaska workers, he said.
“The department and administration are trying to send a clear message: We must make them understand that Alaskans come first,” he said. BP, ConocoPhillips being audited Daren Beaudo, spokesman for BP Exploration (Alaska) Inc. acknowledged the company was subpoenaed and is being audited. He said BP complies with all reporting requirements, is confident in the way it classifies its employees and prefers hiring Alaskans.
He said the company defines residency differently from the labor department. The department determines a resident as somebody who is eligible for an Alaska Permanent Fund dividend. Eligibility for the payment comes after living a full year in Alaska.
Beaudo said 84 percent of BP Alaska workers are Alaska residents, but only 70 percent would be considered residents under the labor department’s interpretation.
Many the company’s North Slope employees are hourly workers who spend a period of days or weeks on site, then a period off site. About 30 percent of those workers live outside Alaska, Beaudo said.
He said he understands the administration’s interest in hiring Alaskans, and that the company shared that interest, too, but, “this is also America, and we can’t tell employees where to live.”
ConocoPhillips spokeswoman Dawn Patience acknowledged that her company also was subpoenaed, and that ConocoPhillips was complying with their commitment to hire Alaska residents.
She said 91 percent of the company’s 915 workers live in Alaska.
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