New Minimum Wage, Paid Sick Leave, and Captive Audience Meeting Protections for Alaska Employees

Alaska Ballot Measure One passed, according to unofficial election results, and brings with it three major changes for Alaska employers. The new law goes into effect July 1, 2025, but employers should start the process of reviewing leave policies and pay practices in anticipation of the upcoming changes now as it unlikely that any employer's current policies comply with the new law.

New Minimum Wage Standards

The law will increase the minimum wage in Alaska as follows:

• Beginning July 1, 2025, the minimum wage shall be $13.00 per hour;
• Effective July 1, 2026, the minimum wage shall be $14.00 per hour;
• Effective July 1, 2027, the minimum wage shall be $15.00 per hour;
• Afterwards, the minimum wage shall be adjusted annually for inflation using the Consumer Price Index for urban consumers in the Anchorage metropolitan area (Anchorage CPI-U) for the preceding calendar year.

The law also states that Alaska's minimum wage shall at all times be greater than $2 above the federal minimum wage.

It is important to note that the law may also impact calculation of the necessary salary level for salaried exempt employees. Individuals employed in a bona fide executive, administrative, or professional capacity are exempt under the Alaska Wage and Hour laws only as long as they are compensated on a salary or fee basis at a rate of not less than two times the state minimum wage. The raise in minimum wage would raise the threshold to $1,040 per week in 2025, $1,120 in 2026, and $1,200 in 2027. Depending on the status of the FLSA's salary basis level, this may raise Alaska's salary basis requirements beyond the FLSA's standard.

New Paid Sick Leave Requirements

The law will also require all private employers in Alaska (subject to limited exemptions) to provide paid sick leave:

• Employers with 15 or more employees: Employees accrue a minimum of one hour of paid sick leave for every 30 hours worked, but employees are not entitled to accrue or use more than 56 hours of paid sick leave per year.
• Employers with fewer than 15 employees: Employees accrue a minimum of one hour of paid sick leave for every 30 hours worked, but employees are not entitled to accrue or use more than 40 hours of paid sick leave per year.

Employees who are exempt from overtime requirements are assumed to work 40 hours in each workweek unless their normal workweek is less than 40 hours, in which case paid sick leave accrues based upon that normal workweek.

Paid sick leave will carry over from year to year, but an employer is not required to allow an employee to use more than the maximum accrual amount per year.

The law allows broad use of paid leave. Employees must be allowed to use paid sick leave for their own mental or physical illness, injury or health condition; need for medical diagnosis, care, or treatment; or the employee's need for preventative medical care. This means coverage extends to both sudden illnesses and routine doctors or dentist appointments. This is a much broader standard than the definition of "serious health condition" covered by the Family Medical Leave Act. Leave can also be taken for care or assistance to the employee's family member relating to the same needs. "Family member" is defined broadly to include but is not limited to an immediate family member, domestic partner, foster child, parent, or "any other individual related by blood or whose close association is the equivalent of a family relationship."

There are also a couple areas of the new law that extend sick leave beyond most employers' current policies. For example, employers must also allow an employee to use paid sick leave for absences due to domestic violence, sexual assault, or stalking. This includes medical or psychological attention, services from a victim's aid organization, relocation or steps to secure an existing home, or legal services, including participation in any investigation or civil or criminal proceeding.   

An employer can only require documentation for an absence if the employee has used paid sick leave for more than three consecutive workdays.

For an employer who already offers sick leave or paid time off that conforms with the above requirements, there is no requirement to provide additional paid sick leave. However, the employer's policy must meet all of the requirements of the law, including the broad use requirements and documentation restrictions.

The law does not require an employer to pay out accrued sick leave on termination but does require an employer to reinstate accrued sick leave if the employee is rehired within six months of separation. This will impact employers who routinely "cash out" employees at the end of a season, a practice that is often used as an important retention tool. If an employer does cash out an employee's sick or other leave at the end of a contract or season, they must be prepared to replenish the employee's leave balance if they return.

Employees who are currently exempt from Alaska's minimum wage and overtime requirements are exempt from paid sick leave requirements (including employees of the state or political subdivision of the state or individuals under the age of 18 employed for not more than 30 hours per week), except the law explicitly applies to employees who are covered by the white collar exemptions.

This new law does not provide a safe harbor for unionized workforces. There is no exemption for employees subject to a collective bargaining agreement (CBA) unless the CBA expressly waives coverage. At this point, it is unlikely that any CBAs expressly waive coverage, meaning employers will likely have to engage in what is known as "effects bargaining" over the law's implementation. Additionally, the law will apply to multiemployer collective bargaining agreements unless the employer makes contributions to a paid sick leave fund enabling employees to collect paid sick leave in compliance with the law.

Paid sick leave as provided in this section begins to accrue at the commencement of employment or July 1, 2025, whichever is later, and an employee is entitled to use paid sick leave as it is accrued. Employers must give employees written notice of the sick leave provisions at the commencement of employment or within 30 days of this section's effective date (which would be June 1, 2025), whichever is later.

New Employee Protection From Employer Speech

With the new protection for employees regarding "rights to avoid speech," Alaska joins a small but growing minority of states that have banned so-called "captive audience meetings." The law prohibits retaliation or adverse employment action against an employee who refuses to attend an employer-sponsored meeting or listen to communications "the primary purpose of which is to communicate the employer's opinion about religious matters or political matters." Political matters is defined broad to include relating to elections for political office, political parties, candidates, proposed legislation or regulations, and the decision whether or not to join or support a political party or political, civic, communal, fraternal, or labor organization.

The law contains limited enumerated exceptions. It does not prohibit an employer or its agent or representative from communicating information: (A) the employer is required by law to communicate; (B) necessary for an employee to perform the employee's job; or (C) directly related to or relevant to the workplace. Additionally, an institution of higher education is not prohibited from communicating to its employees' coursework, symposia, or an academic program. It does not prohibit an employer from requiring executive personnel to listen to communications about the employer's business. Finally, it does not prohibit a bona fide religious organization from requiring its employees to attend or participate in an employer-sponsored meeting for the primary purpose of communicating the employer's religious beliefs, practices, or tenets.

This law will prevent employers from requiring employees to listen to or participate in meetings from employers about union activity. How this will play out in practice beyond the traditional "captive audience meeting" scenario is still largely unknown. Similar laws have been subject to First Amendment and 14th Amendment challenges, with varying outcomes. Before the election, the State of Alaska Attorney General issued an opinion which expressed that the employer communications provision "raises constitutional concerns" but is not clearly unconstitutional under controlling authority.

Employers should stay tuned to see whether the employer communication piece of Alaska's law will be challenged but should be prepared to comply with all the provisions by July 1, 2025.