Alaska — Wage & Hour

Alaska's minimum wage is $13.00 per hour effective July 1, 2025. The rate increases to $14.00 per hour on July 1, 2026, and to $15.00 per hour on July 1, 2027, following the passage of Ballot Measure 1 in November 2024. Beginning January 1, 2028, the minimum wage adjusts annually for inflation based on the Consumer Price Index for all urban consumers in the Anchorage metropolitan area.

Statutory floor — federal minimum wage plus $2.00. Alaska Statute 23.10.065(d) establishes a permanent floor: if at any point the minimum wage determined under the scheduled increases or CPI adjustments falls below $2.00 over the federal minimum wage, Alaska's minimum wage must be set at $2.00 over the federal minimum wage. This provision operates independently of and in addition to the scheduled increases and inflation adjustments. The federal minimum wage has remained $7.25 per hour since July 24, 2009, under 29 U.S.C. § 206(a)(1)(C). If the federal minimum wage were to increase substantially in the future — for example, to $12.00 per hour — and Alaska's CPI-adjusted rate were $13.50, the statutory floor would require Alaska's minimum wage to rise to $14.00 (federal $12.00 + $2.00).

The federal-plus-$2.00 floor ensures that Alaska workers always earn at least two dollars per hour more than the federal minimum, regardless of whether the scheduled step-ups or CPI adjustments produce a higher or lower figure. Because Alaska's current scheduled rates ($13.00 in 2025, $14.00 in 2026, $15.00 in 2027) exceed the current federal minimum of $7.25 by more than $2.00, the floor provision is not operative under present law. However, it remains a binding statutory protection that would activate if future federal increases narrowed the gap or if Alaska's CPI adjustments failed to keep pace with a rising federal minimum.

No tip credit. Alaska employers may not apply tips or gratuities as a credit toward the minimum wage. AS 23.10.065(a) expressly provides that tip credit as defined by the Fair Labor Standards Act of 1938 does not apply to Alaska's minimum wage. Tipped employees must receive the full state minimum wage in direct wages before tips.

Source: Alaska Statute 23.10.065, Alaska Department of Labor and Workforce Development

Source: 29 U.S.C. § 206(a)(1)(C) (federal minimum wage)

Alaska requires overtime pay at 1.5 times the regular rate for hours worked over 8 in a single day and for hours worked over 40 in a workweek. Both thresholds apply independently—an employee who works 9 hours in one day is entitled to 1 hour of overtime for that day even if weekly hours remain under 40. However, hours already compensated as daily overtime are not counted again toward the weekly 40-hour threshold. Employers with fewer than four employees are exempt from Alaska's overtime requirements.

Source: Alaska Department of Labor and Workforce Development, Wage and Hour Act

Alaska law requires meal breaks only for employees under 18 years of age. Employers must provide a break period of at least 30 minutes for minors ages 14 through 17 who work five or more consecutive hours and are going to continue working. This unpaid break is mandatory under Alaska Statute 23.10.350(c).

The statute establishes two independent trigger points. First, a minor scheduled to work six consecutive hours or more is entitled to a 30-minute break during the course of the shift; the break may be scheduled at the employer's convenience but must occur after the first hour and a half of work and before the beginning of the last hour of work. Second, any minor who actually works five consecutive hours without a break is entitled to a 30-minute break before continuing to work — this prong applies regardless of the scheduled shift length.

Adult employees (age 18 and over) have no state-law entitlement to meal or rest breaks. Alaska Statute 23.10.350 applies only to minors, and Alaska has not enacted a general meal-period or rest-break requirement for adults. Employers who voluntarily provide breaks must comply with federal Fair Labor Standards Act payment rules: breaks of less than 20 minutes are compensable work time, while bona fide meal periods of 30 minutes or more may be unpaid if the employee is completely relieved of duties.

Exemptions. The minor-break requirement does not apply to individuals employed in the catching, trapping, cultivating or farming, netting, or taking of fish, shellfish, or other aquatic life, nor to individuals employed by a member of their family (defined as spouse, parent, stepparent, grandparent, step-grandparent, great grandparent, step-great grandparent, brother, sister, uncle, aunt, great-uncle, or great-aunt, whether of the whole or half blood, by adoption, or by marriage). AS 23.10.350(e).

Remedy for violation. Failure to provide the required unpaid break creates a minimum-wage liability under AS 23.10.065 for the break the employee did not receive or received late. A claim for minimum wage in lieu of the unpaid break is enforceable under AS 23.10.110. AS 23.10.350(d).

Modification by agreement. The break requirement may be modified by the terms of a collective bargaining agreement or on occasion by mutual agreement between the employer and the minor employee. AS 23.10.350(c).

Source: Alaska Department of Labor and Workforce Development, Wage and Hour FAQ

Alaska requires all employers with at least one employee to provide paid sick leave, effective July 1, 2025. The requirement was enacted through Ballot Measure 1, approved by voters in November 2024, and codified at Alaska Statutes 23.10.066–23.10.069.

Accrual rate. Employees accrue a minimum of one hour of paid sick leave for every 30 hours worked. AS 23.10.066(1)–(2). This accrual rate applies regardless of whether the hours worked are straight time or overtime, or paid at different rates. Employees on alternative or rotational schedules still earn one hour of sick leave for every 30 hours worked. Exempt employees under 29 U.S.C. § 213(a)(1) are assumed to work 40 hours in each work week for purposes of sick leave accrual unless their normal work week is less than 40 hours, in which case paid sick leave accrues based on that normal work week. AS 23.10.066(3).

Annual usage and accrual caps — employer size determines the limit. Alaska imposes different caps depending on employer size:

• Employers with 15 or more employees: Employees may accrue and use up to 56 hours of paid sick leave per year. AS 23.10.066(1).
• Employers with fewer than 15 employees: Employees may accrue and use up to 40 hours of paid sick leave per year. AS 23.10.066(2).

Employers may set higher limits. Employer size is calculated based on the average number of employees employed per day during the entire previous calendar year, including all full-time, part-time, seasonal, and temporary employees. 8 AAC 15.106 (regulation effective September 25, 2025).

Carryover. Paid sick leave carries over to the following year. AS 23.10.066(4). However, an employer is not required to allow an employee to use more than the applicable annual cap (40 or 56 hours) per year. For example, an employee of a large employer (15+ employees) who accrues 56 hours in year one but uses only 20 hours may carry over the unused 36 hours to year two. In year two, the employee accrues another 56 hours (total bank: 92 hours), but the employer may cap usage at 56 hours in that year.

When accrual begins. Paid sick leave begins to accrue at the commencement of employment or July 1, 2025, whichever is later. AS 23.10.066(5). Employees are entitled to use paid sick leave as it is accrued — there is no waiting period before use.

Rehire and transfer. When an employee is rehired within six months of separation by the same employer, previously accrued and unused paid sick leave must be immediately reinstated. AS 23.10.066(7). An employee transferred to a separate entity or location but remaining employed by the same employer is entitled to all paid sick leave accrued at the prior entity or location.

Exemptions. Certain employees are exempt from the paid sick leave requirement, including minors under 18 years of age who work less than 30 hours per week, and several narrow categories (apprentices, employees in work therapy programs, prison inmates, employees subject to the Railroad Unemployment Insurance Act). AS 23.10.069.

No payout at termination. Employers are not required to pay out accrued, unused sick leave upon an employee's termination, resignation, retirement, or other separation, unless otherwise required by law. AS 23.10.068(6).

Source: Alaska Statute 23.10.066–23.10.069, Alaska Department of Labor and Workforce Development

Alaska sets its white-collar overtime exemption salary threshold at twice the state minimum wage for a 40-hour workweek, creating an automatic escalation mechanism that diverges significantly from the federal floor. Under Alaska Statute 23.10.055(b), an employee in a bona fide executive, administrative, or professional capacity must be compensated on a salary or fee basis at a rate of not less than two times the state minimum wage for the first 40 hours of employment each week, exclusive of board or lodging furnished by the employer.

Current and scheduled thresholds. The Alaska Department of Labor confirms that the salary threshold tracks Alaska's minimum-wage increases under Ballot Measure 1, approved by voters in November 2024, with the following scheduled thresholds:

• $1,040/week ($54,080/year) effective July 1, 2025 (based on $13.00/hour minimum wage)
• $1,120/week ($58,240/year) effective July 1, 2026 (based on $14.00/hour minimum wage)
• $1,200/week ($62,400/year) effective July 1, 2027 (based on $15.00/hour minimum wage)

Beginning January 1, 2028, the minimum wage will adjust annually for inflation based on the Consumer Price Index for all urban consumers in the Anchorage metropolitan area, and the salary threshold will continue to equal two times the indexed minimum wage for 40 hours.

Calculation method. The two-times formula applies to the hourly minimum wage multiplied by 40 hours. For example, at a $14.00/hour minimum wage (effective July 1, 2026), the weekly threshold is $14.00 × 2 × 40 = $1,120/week, or $58,240 annually (52 weeks). The statute excludes board, lodging, or other expenses reimbursed by the employer from counting toward the salary requirement.

Duties test remains federal. Alaska Statute 23.10.055(c)(1) defines "bona fide executive, administrative, or professional capacity" by reference to the federal Fair Labor Standards Act definitions under 29 U.S.C. §§ 201–219 and the implementing regulations at 29 C.F.R. Part 541. An employee must satisfy both the federal duties test and Alaska's higher salary threshold to qualify for exemption. Meeting the salary threshold alone does not confer exempt status; the employee's actual job duties must still fit the applicable FLSA exemption category.

Mid-year effective dates and compliance timing. Unlike many states that adjust wage-related thresholds on January 1, Alaska's scheduled increases take effect on July 1 each year through 2027, then shift to January 1 for CPI adjustments beginning in 2028. Employers must audit exempt employee salaries before each July 1 effective date and adjust compensation or reclassify employees as non-exempt if their salaries fall below the new threshold. An employee earning $55,000 annually is exempt in Alaska on June 30, 2026, but becomes non-exempt on July 1, 2026, when the threshold rises to $58,240, unless the employer increases the salary to meet or exceed the new threshold.

Source: Alaska Statute 23.10.055, Alaska Department of Labor and Workforce Development

Source: Ballot Measure 1 FAQ, Alaska Department of Labor and Workforce Development

Source: Alaska Minimum Wage will increase July 1, 2025, Alaska Department of Labor and Workforce Development

Alaska requires employers to pay public school bus drivers at a minimum wage rate of two times the standard Alaska minimum wage for all hours worked, whether measured by time, commission, or otherwise. This elevated floor, codified at Alaska Statute 23.10.065(b), applies specifically to persons "employed as a public school bus driver." The statute does not define the phrase "public school bus driver," and the Alaska Department of Labor and Workforce Development has not published interpretive guidance clarifying the scope of coverage.

Current and scheduled rates. Because the school bus driver minimum wage equals two times the standard Alaska minimum wage under AS 23.10.065(a), it tracks the scheduled minimum-wage increases:

• $26.00/hour effective July 1, 2025 (2 × $13.00)
• $28.00/hour effective July 1, 2026 (2 × $14.00)
• $30.00/hour effective July 1, 2027 (2 × $15.00)

Beginning January 1, 2028, the standard minimum wage will adjust annually for inflation based on the Consumer Price Index for all urban consumers in the Anchorage metropolitan area under AS 23.10.065(a)(4), and the school bus driver minimum wage will continue to equal two times that indexed amount.

No fringe-benefit credit. An employer may not apply fringe benefits — including health insurance, retirement contributions, or other non-wage compensation — as a credit toward payment of the school bus driver minimum wage. AS 23.10.065(b) expressly prohibits this credit. The two-times minimum wage must be paid in direct wages.

Contracted transportation services — wage-adjustment timing limitation. Alaska Statute 23.10.065(c) creates a timing exception for employers who contract with the Alaska Department of Education and Early Development, a school district, or a regional educational attendance area to provide school bus transportation services. Such contractors are not required to adjust school bus driver wages under subsection (b) except when entering into or renewing the contract.

This provision does not exempt contracted drivers from the two-times minimum wage; rather, it allows the contractor to maintain the wage floor that was in effect when the contract was entered into or last renewed, even if Alaska's standard minimum wage increases during the contract term. When the contractor enters a new contract or renews the existing contract, the school bus driver wages must be adjusted to reflect the then-current two-times minimum wage.

For example, a contractor who entered a three-year school bus transportation contract with a school district on June 1, 2025 (when the minimum wage was $11.73/hour and the school bus driver minimum was $23.46/hour) is not required to raise driver wages to $26.00/hour on July 1, 2025, nor to $28.00/hour on July 1, 2026, during the contract term. When that contract expires and is renewed or replaced on June 1, 2028, the contractor must then pay at least two times the minimum wage in effect at that time.

The timing limitation applies only to employers who hold contracts with the three enumerated public entities (the Department of Education and Early Development, school districts, or regional educational attendance areas). Direct employees of school districts and regional educational attendance areas remain subject to the two-times minimum wage without any contract-timing exception and must receive wage adjustments on each July 1 effective date.

Coverage — scope of "public school bus driver" and contractor employees. The statutory text at AS 23.10.065(b) requires payment to "each person employed as a public school bus driver." Neither the statute nor published Alaska Department of Labor guidance defines this phrase or clarifies whether it extends to drivers employed by third-party contractors (subject to the timing limitation under subsection (c)) or is limited exclusively to drivers employed directly by school districts and regional educational attendance areas.

The broad phrase "each person employed as a public school bus driver" could plausibly encompass both direct employees and contractor employees if the employee's function is driving a public school bus. The existence of subsection (c) — which addresses contractors separately and modifies only the timing of wage adjustments rather than eliminating the two-times wage requirement — suggests that contractor-employed drivers performing public school bus transportation are covered by the two-times wage floor, with only the adjustment schedule modified. However, absent published agency guidance or case law, practitioners advising private transportation contractors should note this textual ambiguity.

Interaction with overtime. The two-times minimum wage under AS 23.10.065(b) establishes the minimum straight-time hourly rate for public school bus drivers. It does not affect or replace Alaska's overtime requirements, which mandate 1.5 times the regular rate for hours over 8 in a day or over 40 in a workweek under AS 23.10.050(a). A public school bus driver earning $28.00/hour (the two-times minimum effective July 1, 2026) who works 10 hours in a single day is entitled to 8 hours at $28.00 and 2 hours at $42.00 (1.5 × $28.00), for a total of $308.00 for that day.

Source: Alaska Statute 23.10.065, Alaska Department of Labor and Workforce Development

Source: Alaska Minimum Wage Increases January 1, 2017 (DOL notice confirming AS 23.10.065(b) application)