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Department of Labor and Workforce Development
 
Labor Standards And Safety Division

Minimum Wage and Paid Sick Leave Frequently Asked Questions

This FAQ will provide some clarity regarding the questions we have received on Paid Sick Leave as established by the passage of Ballot Measure 1 and the subsequent enactment of Alaska Statutes 23.10.066-23.10.069.

1. What is Ballot Measure 1 that was passed in 2024?

Ballot Measure 1 is a voter initiative that was part of the 2024 General Election. Ballot Measure 1 passed, was certified, and was enacted as law effective July 1, 2025, and can now be found in Alaska statute. The new law as adopted does three things:

  • increases the minimum wage;
  • establishes sick leave;
  • prohibits employers from holding mandatory meetings for the primary purpose of sharing political or religious opinions.

The statutes passed in Ballot Measure 1 have been incorporated into our Pamphlet 100 publication [pam100.pdf].

Regulations relating to the new laws have been drafted in accordance with the Administrative Procedure Act and will take effect on September 25, 2025. They are currently housed on the Alaska Online Public notices page [Attachment.aspx] and will be incorporated into the Pamphlet 100 publication once enacted.

2. When do the minimum wage rates increase?

Ballot Measure 1 changes the minimum wage gradually over the next three years. As of July 1, 2025, the current minimum wage is $13.00. Under the new law the minimum wage will increase to:

  • $14.00 on July 1, 2026,
  • $15.00 on July 1, 2027.

Starting January 1, 2028, the minimum wage will be adjusted annually for inflation based on the Consumer Price Index (CPI). The new law only changes the minimum wage rate, it does not change to whom the minimum wage applies.

3. What happens to Alaska's minimum wage rate if the federal minimum wage is changed?

The law contains a provision that says Alaska's minimum wage rate will be set at two dollars over federal minimum wage, then adjusted annually for inflation in subsequent years.

4. How does the minimum wage increases affect salary exempt employees?

Per Alaska Statute 23.10.055 the salary of exempt employees must be at least twice the minimum wage based off a 40-hour week. Changes to the minimum wage also affect the minimum salary level to qualify as a salary-exempt employee, which is currently $1,040/week. This will increase to:

  • $1,120.00/week on July 1, 2026
  • $1,200.00/week on July 1, 2027

Salary levels will need to be adjusted thereafter based on changes made to the minimum wage based on the CPI. Salary exempt employees must still meet the duties test for the executive, administrative, or professional to qualify for the overtime exemption.

5. Which employers are required to provide sick leave?

All employers in Alaska are required to provide paid sick leave to all employees, except for certain employees exempted by statute from the requirements.

6. Which employees are exempt from the paid sick leave requirement?

The following individuals are exempt from the requirement for paid sick leave:

  • Minors under 18 years of age that work less than 30 hours per week. If the minor works more than 30 hours in a week, they must earn sick leave for all hours worked that week.
  • Student learners on a plan approved by the Commissioner of the Department,
  • Seasonal employees of a non-profit residential summer camp,
  • Work therapy patients at a residential drug abuse or alcoholism treatment program,
  • Employed prisoners,
  • Employees covered by a collective bargaining agreement that expressly waives the right to sick leave in clear and unambiguous terms,
  • Those exempt from minimum wage and overtime under AS 23.10.055, which includes employees in agriculture, aquaculture, domestic service, and federal and state employees. Salary-exempt employees under AS 23.10.055(a)(9) are subject to paid sick leave.

7. Do employers need to provide paid sick leave to part time employees?

Yes, part time employees must be provided with paid sick leave.

8. How much sick leave must the employer provide?

Sick leave is accrued at the minimum rate of one hour of sick leave for every 30 hours of work. This ratio is used regardless of whether the hours worked are straight time, overtime, paid at different rates, or worked in the same pay period. Employees on alternative schedules, rotational schedules, or other non-traditional arrangements still earn one hour of sick leave for every 30 hours of work.

9. How much sick leave are employers required to allow employees to accrue?

Small employers, fewer than 15 employees, are required to allow employees to accrue and use up to 40 hours of sick leave per year. Employers with 15 or more employees are required to allow employees to accrue and use up to 56 hours of sick leave per year. An employee must carry their sick leave balance forward into the next year and must begin to accrue sick leave again. While usage and accrual of sick leave is capped at either 40 or 56 hours per year, an employee's sick leave balance can exceed this.

10. How are employers supposed to decide if they have less than or greater than 15 employees when their total number of employees fluctuates throughout the year?

Employers must use a Full Time Equivalent (FTE) calculation for the previous calendar year to determine employer size. Add all hours worked by all employees during the calendar year and divide this sum by the number of hours a full-time employee would work during the calendar year.

11. What employees are counted for the purpose of determining employer size?

All hours worked by part-time, full-time, or seasonal employees must be included in the FTE calculation (see question #10).

12. How is sick leave accrued for salary exempt employees?

Hours worked by salary-exempt employees for accrual purposes is the actual hours worked per week or 40 hours per week, whichever is less. They still accrue sick leave at the rate of one hour of sick leave per 30 hours of work counted.

13. Do the hours an employer pays for vacation & holiday count towards the Sick Leave Hour accrual or is it hours actually worked?

Hours worked does not include holidays, vacation, time spent not working, or other non-working hours.

14. When can sick leave be used?

Sick leave is paid leave that is allowed to be used for injury, illness, to care for a family member, or when necessary to receive care or legal help related to domestic violence, sexual assault, or stalking.

An employer cannot deny an employee's use of sick leave, penalize an employee for using sick leave, or require an employee to arrange coverage for their missed shift. When used, sick leave should be used to cover the worktime the employee missed due to illness or injury, paid out at the employee's regular rate.

Employers are not allowed to require proof of illness for paid sick leave unless it extends beyond three consecutive workdays. If requested, a signed note from a health care professional indicating that the sick leave is/was necessary will suffice. An employer is barred from requiring the employee to share the nature or detail of the illness or underlying health needs.

15. What if we already have an existing PTO plan?

The new law does not necessarily require that employers provide additional paid sick leave if their current paid time off (PTO) program meets the minimum requirements for paid sick leave and the employee is allowed to use that time for absences due to sickness or injury. In the same way that employers are free to pay an employee over minimum wage, they are free to offer a more generous leave program as long as it exceeds the requirements of statutorily required paid sick leave. Employers should review existing plans for compliance with the new law, particularly regarding leave request procedures.

If an employee with a combined PTO/sick leave plan uses their entire leave balance for a vacation and later falls ill, they are not entitled to any additional paid leave. If they accrue at least one hour of leave per 30 hours worked, and have the option to use it as paid sick leave, the employer has satisfied the requirements of the law.

16. How are employers supposed to determine if their existing PTO plan meets the requirements of the new laws or if they must provide additional paid sick leave?

To not provide additional paid sick leave, employers must have a PTO policy that meets the minimum usage and accrual standards of AS 23.10.066 and notify employees that their PTO plan will be used to meet the requirements of the paid sick leave law.

17. How should employers maintain their records to ensure they demonstrate compliance when they have a combined PTO and sick leave plan?

The recordkeeping requirements of 8 AAC 15.160(h) mandate that the sick leave used in the accrual year and the sick leave balance be included in statements of earnings and deductions. In instances where an employer combines sick leave with another paid leave program, the employer has satisfied the requirement if the statement of earnings shows the paid leave used in the accrual year and the leave balance.

18. Are employers required to pay out accrued sick leave when employment ends?

Employers are not required to pay out accrued sick leave at the end of employment.

19. Can employers choose to cash out unused PTO at the end of each calendar year?

Employers can have a policy that allows employees to request a "cash out" of accrued PTO/sick leave at the end of employment or the end of the leave year. However, employers cannot mandate payout of yearly sick leave accrual. They must allow sick leave to roll over year to year unless they front-load leave.

20. How does cashing out sick leave interact with the requirement to reinstate sick leave balances for employees rehired within 6 months of termination?

If an employee accepts a voluntary cash-out of paid sick leave upon termination of employment, they have received the benefit as required by law. No sick leave must be reinstated if they are rehired within 6 months.

21. How does front-loading of leave affect the requirement to rollover unused sick leave at the end of the year?

Employers that front-load the proper amount of sick leave are not required to carry forward any unused sick leave to the next year.

22. How are employers supposed to pay out sick leave for employees that don't have a standard hourly rate such as employees that are paid day rates, commission, at multiple rates, or through other agreements?

Employers are to be paid sick leave at their regular rate. This rate is calculated based on the applicable section of 29 CFR 778. Compensation methods specifically addressed are pieceworkers, employees paid at multiple hourly rates, employees paid in wages other than cash, employees that receive a commission, and employees that receive a bonus.

23. Are employers limited to paying out sick leave in 8-hour increments for employees who regularly work longer shifts?

Employees should be paid their regular hourly rate for all scheduled hours not worked for a qualifying absence.

24. What is the notification requirement for paid sick leave?

Upon hire, employers are required to notify their employees in writing of their entitlement to paid sick leave, the amount of sick leave, the terms of use under statute, and that retaliation is prohibited.

25. To satisfy the written notice requirement, do employers have to provide employees with their exact accrual rate or does a table that lists multiple accrual rates based on tenure suffice?

Transmission of the written notice through a handbook or manual is allowed. Accrual rates that are displayed as a table instead of a fixed number would satisfy the requirement if they meet the accrual requirements of AS 23.10.066.

Is there anything else we should know about paid sick leave?

Paid sick leave took effect on July 1, 2025. The regulations drafted and signed into law by the Lt. Governor take effect on September 25, 2025. We hope this FAQ helps clarify some of the confusion surrounding the change in labor law.

Wage and Hour provides a cost-free counseling service to Alaska employers, and we invite you to take advantage of this service. A monthly webinar is offered to the employers and employees concerning wage and hours laws. Check our website for the time of each webinar or contact our office at (907) 269-4900. An investigator is on duty Monday through Friday from 8:30 a.m. to 4:30 p.m. excluding the noon hour, to answer any questions you may have.

last updated: September 4, 2025