Introduction to employment laws in Alaska
Overview
Alaska has a relatively business-friendly employment landscape, with a few key regulations: A higher minimum wage than the federal standard, flexibility for employers to set their own leave policies, and no state requirements mandating or prohibiting background checks, among others.
While Alaska’s employment laws are generally less stringent than some other states, it is still critical for employers to understand and comply with these regulations. This guide contains everything businesses need to know.
Employing in Alaska: Key employment laws and practices
Standard work hours
In Alaska, the standard workweek consists of 40 hours over five or six days for full-time employees. For contractual workers, work hours may vary depending on the terms of the contract. Self-employed professionals set their own hours based on their business needs.
Minimum wage and overtime
The state’s minimum wage is currently set at $11.73, higher than the federal rate. Every January 1st, this wage is adjusted for inflation according to Alaska’s unique cost of living.
Beyond the standard working hours, employers are required to pay overtime at a minimum of 1.5 times the hourly rate for all hours worked in excess of 40 hours in a workweek and eight hours in a workday.
Insurance and benefits
Alaska mandates employers to provide certain benefits such as workers’ compensation insurance, unemployment insurance, and disability insurance. Additionally, employers often offer benefits such as health, dental, vision insurance, and retirement plans voluntarily to attract and retain talent.
Benefit type | Description |
Workers’ compensation | Mandatory insurance that provides benefits to employees who suffer job-related injuries or illnesses |
Unemployment insurance | Provides temporary income to eligible workers who become unemployed through no fault of their own |
Disability insurance | Provides partial wage replacement insurance coverage to eligible workers for non-work related sickness or injury |
Meal and rest periods
Alaska only mandates break provisions for minor employees aged 14-17. These workers must be provided a 30-minute meal break if they work five or more consecutive hours.
For adult employees aged 18 and over, Alaska defers to federal labor laws. Under federal guidelines, employers are not required to provide meal or rest breaks, but if they do offer such breaks, breaks of 20 minutes or less must be paid time, while breaks of 30 minutes or more can be unpaid as long as the employee is completely relieved of duties.
Alaska does not have any other state-specific laws regarding meal periods, rest breaks, or time off for adult workers. Employers have flexibility in setting their own policies around breaks, as long as they meet the minimum requirements for minor employees and comply with applicable federal regulations.
Anti-discrimination laws
Alaska employment laws provide comprehensive protection against discrimination in the workplace. The Alaska Human Rights Act (AHRA) is a central state-specific law that prohibits discrimination based on several protected characteristics: race, religion, national origin, age, physical or mental disability, sex, marital status and changes in marital status, pregnancy, and parenthood. The AHRA extends its protection to all employers with one or more employees.
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Leave policies
Alaska’s employment laws provide for jury duty leave, voting leave, military leave, and crime victim leave. However, in contrast to many other states, Alaska does not currently mandate paid sick leave or family and medical leave beyond what is required by the federal Family and Medical Leave Act (FMLA).
Employers cannot penalize employees who are selected for jury service and must allow them time off without loss of pay. For voting leave, employers are required to provide paid time off for employees to vote if they do not have sufficient time outside working hours.
Military leave is also mandated by state law and follows the Uniformed Services Employment and Reemployment Rights Act (USERRA). Employees who serve in the military must be granted unpaid leave and be reinstated upon return.
While not mandated by law, offering vacation leave (paid or unpaid) is a common practice among Alaskan employers.
Leave type | Paid/Unpaid | Mandated by state law |
Jury duty | Paid/Unpaid | Yes |
Voting | Paid | Yes |
Military | Unpaid | Yes |
Crime victim | Unpaid | Yes |
Vacation | Paid/Unpaid | No |
Termination Laws
Alaska follows the “at-will” employment principle, which means that either the employer or the employee can terminate the employment relationship at any time, for any reason, provided that reason is not illegal, discriminatory, or retaliatory.
Employers who terminate or lay off an employee are required to pay final wages within three working days. For employees who resign, final pay must be issued by the next regular payday, that is, at least three days after the employer received notice of the resignation.
While there’s no statutory requirement for severance pay in Alaska, if the employer has a policy or contract that provides for it, they are obliged to fulfill it upon termination. This also applies to accrued vacation time.
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Safety and health
Workplace safety is a critical aspect of Alaska employment laws. The state operates its job safety and health programs under a state plan approved by the federal Occupational Safety and Health Administration (OSHA).
Alaska also bans smoking in an enclosed area within a place of employment. The smoking ban extends to outdoor areas where an employer has declared its entire outside grounds to be smoke-free or within 20 feet of an entrance, open window, or heating or ventilation system air intake vent.
While employers can generally prohibit firearms in the workplace, they cannot prevent individuals from storing lawfully owned firearms in a locked, privately owned vehicle in an employee parking lot. As part of ensuring safe driving practices under Alaska employment laws, all drivers are prohibited from texting while operating a motor vehicle.
Taxes in Alaska
Alaska does not impose a state income tax on its residents, but employers must comply with federal employment taxes. These include Federal Income Tax, Social Security Tax, and Medicare Tax. Employers are required to withhold these taxes from their employees’ wages and remit them to the IRS.
Additionally, employers are responsible for paying Federal Unemployment Tax (FUTA).
Alaska also imposes a state Unemployment Insurance Tax on employers. The rate varies depending on the employer’s experience rating and the balance in the state’s unemployment trust fund.
The table below outlines the tax details:
Tax type | Employee contribution | Employer contribution |
Federal income tax | Varies | N/A |
Social Security | 6.2% of wages up to $142,800 for 2021 | 6.2% of wages up to $142,800 for 2021 |
Medicare | 1.45% of all wages | 1.45% of all wages |
FUTA | N/A | 0.6% of first $7,000 paid to each employee per year |
SUTA | N/A | Varies by employer |
Managing Alaska employees with an Employer of Record (EOR)
Ensuring compliance with various Alaska-specific regulations is critical for businesses looking to employ in the state.
This is where Multiplier comes in, providing an all-encompassing Employer of Record (EOR) solution that enables you to legally employ full-time workers in Alaska without setting up local U.S. entities.
Multiplier’s Global Payroll platform simplifies managing payroll, too, allowing you to pay your U.S. workforce on time while handling local taxes, contributions, and withholdings.
Multiplier also offers global benefits administration, which ensures you provide locally compliant and competitive benefits to your employees.
Book a demo with Multiplier today.
FAQs
Under the Alaska Human Rights Act (AHRA), employers are prohibited from discriminating and harassing employees based on protected characteristics such as race, religion, color, national origin, age, physical or mental disability, sex, marital status, changes in marital status, pregnancy, and parenthood.
Employers are also forbidden from terminating or discriminating against individuals who have opposed any practices forbidden by the law or have filed a complaint or testified or assisted in any legal proceeding.
Under Alaska HR compliance guidelines, an employer can obtain a job applicant’s criminal history record containing past conviction information and current offender information. This doesn’t include sealed records. Employers may also test prospective employees for drug usage and may refuse to hire applicants based on a positive drug test or refusal to submit to a drug test.
The Alaska Wage and Hour Act establishes the state’s minimum wage, currently at $11.73 per hour, which is higher than the federal rate. It also mandates nonexempt employees to be paid overtime for all hours worked in excess of 40 hours in a workweek or eight hours in a workday. Child labor laws restrict the occupations and working hours for minors.
The law requires that employers pay the full amount of wages due to employees in cash, negotiable checks, drafts, or orders payable upon presentation without discount by a bank or depository within the state. Wages may also be paid via direct deposit under certain conditions.
Alaska employment laws mandate few requirements relating to time off and leaves of absence for employees, covering all employers. These laws include jury duty leave, voting leave, military leave, and crime victim leave.
