Alaska Minimum Wage Laws




Minimum wage

Alaska’s current minimum wage is $9.75.

Beginning on January 1, 2017, Alaska’s minimum wage will be pegged to inflation and will increase each year by the increase in the Consumer Price Index for all urban consumers for the Anchorage metropolitan area, compiled by the Bureau of Labor Statistics, United States Department of Labor, rounded to the nearest one cent. If at any time Alaska’s minimum wage is less than $1.00 more than Alaska’s minimum wage, Alaska’s minimum wage will adjust to be $1.00 more than the federal minimum wage and any future minimum wage adjustments will be based on the new minimum wage. Alaska Minimum Wage Increase, Ballot Measure 3 (2014)

Employers are required to pay public school bus drivers at least two times the current Alaska minimum wage. An employer may not include fringe benefits in its minimum wage calculation. AK Statute 23.10.065(b)

Alaska employers must also comply with federal minimum wage laws, which currently sets the federal minimum wage at $7.25. See FLSA: Minimum Wage.

If an employer chooses to pay employees minimum wage, the employer must pay those employees in accordance with the minimum wage law, either federal or state, that results in the employees being paid the higher wage. In most instances in Alaska, the Alaska minimum wage will apply as it generally guarantees a higher wage rate for employees than federal law.




Tip minimum wage

Alaska minimum wage laws do not permit employers to pay a reduced minimum wage rate to tipped employees. Employers must pay tipped employees the standard minimum wage rate. AK Statute 23.10.065(a)

Tips are defined as amounts of money that are determined and freely given by customers to employees in recognition of service provided. The amounts of money may be paid in cash or credit card. It does not include compulsory charges or fees that are part of the employer’s gross receipts. This includes tips or gratuities of a fixed amount or percentage that customers are required to pay as part of their bill, e.g. minimum gratuity charges for large parties at restaurants. AK Admin. Code 8-15.907(e)(2)

Employers are prohibited from handling or taking control of an employee’s tips, unless they are:

  • delivering the cash amount of a tip left for an employee via a credit card charge, or
  • redistributing tips to employees pursuant to a lawful tip pooling arrangement

AK Admin. Code 8-15.907(a)-(c)

An employer may deduct credit card fees from tips given to employees via credit card. The deducted fee amount may not exceed the percentage charged by the credit card company for its fee. AK Admin. Code 8-15.907(d)



Tip pooling and sharing

Alaska minimum wage laws permit employers to require employees to participate in tip or gratuity pools, subject to the rules and regulations established under the Fair Labor Standards Act. See FLSA: Tip Pooling; AK Admin. Code 8-15.907(b) A tip pool is defined as an arrangement in which portions of tips received by one group of employees are collected for distribution among certain other employees. AK Admin. Code 8-15.907(e)(1)



Subminimum wages

Employees with disabilities

Alaska minimum wage laws allow employers to pay less than minimum wage to individuals impaired by physical or mental deficiency, age, or injury that otherwise limits their ability to perform work. AK Statute 23.10.070(1); AK Admin. Code 8-15.120. To be able to pay an individual with a disability less than minimum wage, an employer must file an application with Alaska’s Department of Labor and Workforce Development or file an application for a special certificate with the Regional Director of the wage and hour division of the U.S. Department of Labor. AK Admin. Code 8-15.120(a)

Applications to pay employees with temporary disabilities less than minimum wage are not approved as a general rule. AK Admin. Code 8-15.120(e) Individuals undergoing rehabilitation treatment or therapy for narcotics or alcoholism are not considered to be disabled for purposes of the minimum wage exception. AK Admin. Code 8-15.120(f)

If the commissioner approves the employer’s application, the wage rate the employer may pay the individual with a disability will be no less than fifty percent (50%) of minimum wage or $3.86, except in very extreme situations where the individual is so seriously impaired he/she is unable to engage in competitive employment. AK Admin. Code 8-15.120(c) The rate approved by the commissioner will be effective for a limited period of time. Upon expiration of the approved time period, the employer must file an new application along with an evaluation of the individual’s productivity, comparing the degree of productivity between the initial application and the renewal. AK Admin. Code 8-15.120(d)

An application for an exception must set forth the facts demonstrating that the individual’s productive capacity is impaired. A medical certificate is required in cases where the disability is not clearly obvious. The application must be certified by a responsible person who has knowledge of the individual’s disability. AK Admin. Code 8-15.120(b)



Trainees

Alaska minimum wage laws do not allow employees to pay trainees a wage rate below the regular minimum wage unless one of the other subminimum wage exceptions apply.



Apprentices

Alaska minimum wage laws allow employers to pay apprentices less than the state’s standard minimum wage rate if it is approved by the commissioner of Alaska’s Department of Labor and Workforce Development. Some conditions may apply. AK Statute 23.10.070(2)



Learners

Alaska minimum wage laws do not allow employees to pay learners a wage rate below the regular minimum wage unless one of the other subminimum wage exceptions apply.



Student learners

Alaska minimum wage laws allow employers to pay student learners a wage rate that is no less than 75 percent less than the standard minimum wage rate. AK Statute 23.10.070(3); AK Admin. Code 8-15.125(c) A student learner is an individual enrolled in:

  • a course of study or training in a cooperative vocational training program that is operated by a recognized state or local educational authority or
  • a program that is substantially similar to those operated by state or local educational authorities and is operated by private school.

AK Admin. Code 8-15.125(a)

An employer is required to submit an application with Alaska’s Department of Labor and Workforce Development to receive permission to pay student learners less that the standard minimum wage. AK Admin. Code 8-15.125(b)



Student workers

Alaska minimum wage laws do not allow employees to pay student workers a wage rate below the standard minimum wage, unless one of the other subminimum wage exceptions apply.