Alaska Wage & Hour Law
Labor laws in Alaska set out the basic rights and obligations of the employer and employee. Federal labor laws often overlap with Alaska labor laws. Alaska workers should know that state labor laws provide minimum standards, but employers may grant workers additional benefits not mandated by state or federal laws.
Alaska wage and overtime laws are contained in Title 23 of the Alaska Statutes. Wage laws regulate payment of salaries for work. Alaska overtime laws specify the conditions under which overtime pay must be paid. Alaska wage laws apply to both exempt and non-exempt employees. Wage laws expressly cover both private and public sector employment. Alaska rest and meal period laws set out requirements regarding breaks from work. An employee is not entitled to a rest or meal period. However, if an employer provides either, he must pay the employee for time spent on a break if longer than 20 minutes . Alaska working time laws require employers to pay non-exempt workers for all time spent working. Working time includes time spent on tasks, whether during or outside the regular work. Non-exempt workers need not be paid for breaks of less than 20 minutes. An employee is not working if he is on a bona fide meal period. Alaska wage deduction laws restrict employers’ ability to make deductions for pay. The times when an employer cannot make deductions for wages include:
• Where a deduction is prohibited by statute or regulation;
• Where the deduction would result in the payment being below the federal minimum wage of $7.25; and
• Where the deduction is for a wage overpayment, the amount of the overpayment will not be deducted until the next payment date. The Alaska Division of Labor Standards and Safety oversees all labor laws in Alaska. Parties with questions regarding their rights under Alaska labor laws should contact the Division.
Alaska Exempt (Salary) Employees
In Alaska, not all salaried employees are employees who are paid a salary. Consider the following examples:
Samantha Schneider is 50 years of age and has worked at a large oil company in Anchorage for 15 years. She works as an HR manager, is paid a salary of $85,000 per year, participates in the company bonus plan (where she has earned $5,000 annually for all but one of her 15 years at the company), receives stock options, is expected to work significant overtime and to be available 24/7. She reports to the VP of human resources and has four direct reports. She is a "salaried, exempt employee" under federal and state law and do not receive overtime pay.
Jimmy Jackson is 30 years of age and has worked at the same company in Anchorage for five years. He works as an HR assistant, is paid a salary of $40,000 per year, and does not receive a bonus or stock options. He receives two weeks’ vacation per year and has no direct reports. He is a "salaried, non-exempt employee," meaning that he does not receive overtime pay for the additional time he puts in nor does he have any choice in working that time.
Andrew Andersen is 35 years of age and has recently been promoted to a corporate attorney position at the company. He is paid an annual salary of $120,000 per year, but his compensation package includes a sign-on bonus, relocation benefits and stock options. He is expected to work significant overtime and is available 24/7. He has no direct reports. He is a "salaried, exempt employee" under federal and state law and do not receive overtime pay.
Maria Minor is 28 years of age and works at the same company in Anchorage as both Andrew and Samantha. Maria works as an administrative assistant to Andrew and Samantha, is paid a salary of $39,000 per year and receives no bonus or stock options. Maria does not receive any overtime premium pay for the time she works beyond 40 hours in any week. Maria is a "salaried, non-exempt employee," although her position could be viewed, and should be viewed, as an "exempt" position, under the FLSA and the AWP, due to its administrative nature.
Minimum Wage Laws & Salary Requirements
Generally, in lieu of a fixed hourly rate, employers in Alaska may compensate salaried employees through "salary plus an award," provided that the total amount paid to the employee meets the minimum wage hourly rate requirements. As such, Alaskan employers may not pay employees on a salary basis unless the salary meets or exceeds the minimum wage that must be paid if the employee were compensated on an hourly basis.
Thus, for example, the salary paid to an employee must be enough to satisfy the following multiple: At the end of the period, if the employee has worked more than forty hours and his or her salary did not equal at least one-half of the required minimum wage for each hour worked over forty hours, then the employee must be compensated at the regular rate for all hours worked.
Overtime Requirements for Salaried Employees in Alaska
Generally, unions agree to exempt certain employees from the overtime requirements of the Alaska Wage Act. Often this exemption is agreed to because the employee is not closely supervised and time is more or less open for the employee to allocate time to particular tasks. The other circumstance where an employee is not entitled to overtime under the Alaska Wage Act is when the employee meets the "exempt" categories under the law. These generally fall into three categories: executive, administrative, and professional employees. Toforé v. Unum Life Insurance Co. of America, 2006 U.S. App. LEXIS 3028 (9th Cir.); 29 CFR §§ 541.100-400; 8 AAC 15.160 (b); 8 AAC 15.180 (d).
The general requirements for an employee to qualify as an exempt professional are:
- (1) the employee must be engaged in work directly related to the management or general business operations of the employer or the employer’s customers;
- (2) the employee’s duties must include the exercise of discretion and independent judgment with respect to matters of significance; and
- (3) the employee must regularly and customarily perform at least one of the duties set forth in subsection (a)(3)(A) through (D). 8 AAC 15.180 (d) 8 AAC 15.180(d), relating to the professional exemption, incorporates by reference 29 CFR 541.3 and 841.304, which lists the categories of employees qualifying for the professional exemptions.
For example, exempt "professional" employees include members of the medical and legal professions. However, a computer specialist paid on a salary basis and who takes his direction from the department of information technology, who has little independent decision-making authority, and who is never required to perform more than 40 hours a week would not qualify for the professional exemption. In addition, administrative personnel, such as secretaries or clerical staff generally who do not have education or experience which qualifies them for a professional exemption are not exempt under the Alaska Wage Act.
Remember, even if an employee is "exempt" from the overtime requirement, the employer is still required to pay the employee at least the minimum wage for all hours worked.
Employment Protections and Benefits
Alaska provides the following benefits and protections to all salaried employees.
Health insurance: Alaska law does not require an employer to provide health insurance, although under the Affordable Care Act (ACA), companies with 50 or more employees must offer affordable, minimum essential health coverage to avoid tax penalties. Employees who do not receive minimum essential coverage from their employers may qualify for premium tax credits to use on the Exchange.
Workers’ Comp: Alaska requires most employers to provide workers’ compensation to employees who are injured or disabled by work-related causes, including accidents, repetitive stress, or exposure to harmful agents. Workers’ compensation is a no-fault system that pays medical expenses and partial wage replacement for employees who are injured at work.
Annual leave entitlements: Alaska law does not require employers to provide vacation or paid leave. An employer generally is free to determine the amount of leave, leave entitlement rules, and carry-over rules. However, an employer may not have a rule limiting vacation pay to employees who have worked a certain period of time or limiting payment of accrued vacation benefits upon termination to certain employees.
Holiday pay: Employees in Alaska are required to receive holiday pay only if it is included in the employment contract or employer policy.
Sick leave: Alaska law does not require employers to provide sick leave. An employer generally is free to determine the amount of sick leave, leave entitlement rules, and carry-over rules. An employer may not have a rule prohibiting sick leave for employees with tenure or limiting pay for accrued sick leave to certain employees.
Parental leave: Alaska law requires employers with one or more employees to permit an employee to take an unpaid leave of absence for childbirth or adoption. The leave may not exceed 18 weeks.
Pregnancy discrimination: Alaska law prohibits discrimination against employees or applicants based on pregnancy, childbirth, or a medical condition related to either. This law requires that employees disabled as a result of pregnancy be treated the same as other temporarily disabled employees . An employer may not limit a woman’s initial or additional employment opportunities because she is pregnant or has had an abortion.
Access to public accommodations: Alaska law prohibits public accommodations from discriminating based on race, religion, color, national origin, sex, physical disability, mental disability, age, pregnancy, or parenthood.
Lactation: Alaska law allows employees to express breast milk during contracted working hours, provided the employee notifies the employer that she needs to express breast milk. Public and private employers must provide reasonable break time each time the employee needs to express breast milk. Reasonable break time may be taken near the employee’s work area and cannot unreasonably disrupt operations. The employer may require the employee to accommodate a scheduled break, but the employee must be allowed to leave to express breast milk.
Drug testing: Alaska law permits public and private employers to conduct drug testing on employees. Testing must be performed according to a written plan that specifies testing procedures and the types of licensed or certified laboratories that have permission to analyze urine specimens or conduct other drug tests. Pre-employment drug testing is permissive.
Smoking ban/indoor air pollution control: Alaska law prohibits smoking in most public places. In addition, an employer that has custody of prisoners may not allow smoking in any building or on any premises where prisoners are confined.
Credit reports: Alaska law restricts employers from inquiring about credit history or using credit information for employment purposes. However, employers may consider credit history if it is job-related and has a valid business purpose.
Criminal history checks: Alaska law restricts employers from inquiring about or using criminal history for employment purposes if the arrest did not result in a conviction, the charge was resolved with a pardon, or the charge was dismissed. Private employers with one or more employees are not permitted to require or administer polygraph tests to employees or applicants.
Alaska Obligations and Notifications
When it comes to compliance, the primary responsibility of employers in Alaska is to ensure that they are properly classifying employees as exempt or nonexempt. As part of that duty, employers should keep detailed records regarding wages and hours worked by their employees. These terms are specifically defined below, but in short, an employer must keep pay and time-keeping records for all of its employees. In fact, although there is a general statute of limitations of two (2) years, the Alaska Department of Labor and Workforce Development requires employers to maintain employee time-keeping and payroll records for at least three (3) years.
An employer also has the duty to provide and maintain a suitable place where required wages are paid. This can be demanding in Alaska because many companies have worksites located in remote areas with limited access to banks. Many employers in this position choose to comply by issuing payroll debit cards to their employees, but such payments can only be made after certain requirements are met. For instance, an employer must obtain written consent from an employee before issuing a payroll debit card, and the employee’s agreement to receive payment of wages via payroll debit card must be voluntary. Such subjectivity generally precludes an employer from forcing employees to receive their wages in the form of a payroll debit card.
Other obligations can include registering the names and addresses of all employers who have paid wages to employees, the name and address of all employers to whom any wages are owing, and the name of each employee and the amount of wages paid to that employee during the year, including deductions.
Labor Disputes
Software developers, marketing consultants, and other professional employees owe much of their hard-won job security to the "salary basis" rule under federal and state employment law. This rule holds that an employee must be paid a minimum weekly wage without computing the amount of hours worked. If an employer withholds a week’s pay from such an employee without a legal dispute taking precedence, the employee becomes entitled to make a claim against the employer under the Alaska Wage and Hour Administration.
Other employment contract violations have a similar remedy – the employee may wish to file suit in the appropriate district court if mediation fails to settle the matter out of court. This is sometimes difficult to evaluate in the case of salaried employees because, while the law provides them protection from reduction of pay or garnishment for debt under a multitude of circumstances, it does not prohibit an employer from reducing pay or garnishing wages (or even firing an employee) for other reasons. Past performance problems, repeated tardiness, failure to follow sound business practices, and similar reasons might result in a lawful termination. Only instances of a clear pay reduction in violation of law or discrimination on the basis of an enumerated protected class (e.g., age, gender, religion , etc.) could trigger a legitimate legal challenge.
Employees who stand to lose wages as a result of an employer’s choice not to follow labor laws have the right, under Alaska law, to ask the Wage and Hour Administration for a conference and mediation. At this conference, both the employee and employer describe the facts leading to the dispute in an effort to reach an amicable solution that is satisfactory to both parties.
If a mutually agreeable solution cannot be reached, the employee then has the right to bring the dispute to court via a civil action by filing the complaint with the appropriate District Court. A civil action requires payment of court costs to commence and the retention of an attorney to represent the case at law. For most individuals, the costs involved in this type of lawsuit do not prove beneficial when weighed against the benefits to be gained, leading many resolved disputes to be settled out of court, in mediation or through informal negotiations.
If a lawsuit becomes necessary, the employee’s ability to collect damages may be higher than anticipated if the employer continues to dispute the case. Each day a claim remains open, the employer may become liable for fines and penalties in addition to the amount owed to the employee. In such cases, even a lengthy lawsuit could be well worth the time and money to the majority of individuals.