Since January 1, 2017, Alaska’s minimum wage has been pegged to inflation and will increase on January 1 of each year thereafter 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 the federal minimum wage, Alaska’s minimum wage will adjust to being $1.00 more than the federal minimum wage and any future minimum wage adjustments will be based on the new minimum wage. AK Statute 23.10.065(b)
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(a)
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
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)
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). 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 and receive approval. AK Department of Labor and Workforce Development – Minimum Wage Standard and Overtime Hours
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.
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)
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.
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.
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)
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.