In the beginning of 2020, Alaska raised the state minimum wage. When the consumer price index (CPI) was adjusted to reflect an increase in prices paid by Alaskan consumers for goods and services, Alaska state labor officials elevated the minimum wage by $.30. Alaska’s minimum wage is higher than the federal minimum wage. However, the regulations surrounding the minimum wage can be complicated.
Municipal, state, and federal laws are put in place to fairly determine and enforce a proper minimum wage for employees and businesses of different types. The minimum wage for employees who rely on tips, work overtime, or earn annual salary will all earn differently under 2020 Alaska minimum wage pay structures and legislation.
Table of Contents
- 1 2020 Minimum Wage in Alaska: $10.19 per hour
- 2 Alaska Minimum Wage Exemptions
- 3 Fairbanks Minimum Wage: $9.80 per hour
- 4 Alaska Minimum Wage Increase News
2020 Minimum Wage in Alaska: $10.19 per hour
Starting January 1 of 2019, the Alaskan minimum wage was increased from $9.89 to $10.19. This $.30 increase is notably higher than the rate increase in 2019, which saw the minimum raise go from $9.84 to $9.89.
Of course, employees — depending on the job they work and the industry they are in — might receive tips, work extended/overtime hours, or have to pay taxes unique to their work. This means that minimum wages may vary from employee to employee within the state. There are three notable exceptions to the minimum wage:
- Government employees, farm workers, fishermen, and taxi drivers are exempt, meaning they can earn lower than the minimum wage;
- Executive, professional, or administrative workers are exempt from the minimum wage law and overtime laws;
- School bus drivers are required to earn at least double the minimum wage.
Tipped: $10.19 per hour
The minimum wage for tipped employees is $10.19 per hour. Many employees rely on tips to survive. Many states allow a tip credit, where the tip amount an employee earns on the job is counted toward their minimum wage. Workers who earn tips in Alaska can rest easy knowing that tips do not count toward their minimum wage, because Alaska does not allow a tip credit.
Whatever tips an employee makes are added onto their wage — not figured into it. While tip credits are not allowed in Alaska, tipped employees have to adhere to a number of federal laws which may limit or increase their pay.
According to the Alaska Division of Labor Standards and Safety, “An employer may not employ an employee for a workweek longer than 40 hours or for more than eight hours in a day.” Anything after 40 hours will be considered overtime.
A weekly income simply involves multiplying the minimum wage $10.19 by 40. This equals a weekly payment of $407.60. It is worth pointing out that, while Alaska does not have a personal income tax, the state may still tax pension benefits.
If you know your weekly wage in Alaska ($10.19) and multiply it by the weeks in a year (52), you can tally an annual wage. In the case of Alaska, the annual minimum wage equals $21,195.20. This is only a rough estimate, as some employees may take unpaid time off for sick days or holidays. Conversely, others may work overtime. In either case, your annual wage may vary from this figure.
Overtime: $15.29 per hour
The Alaska Division of Labor Standards and Safety also states that “compensation for overtime shall be paid at a rate of one and one-half times the regular rate of pay.” Essentially, an Alaskan employee will earn their standard rate ($10.19) plus half of that rate ($5.10). This adds up to $15.29, starting on your 41st hour of work for the week.
Alaska Minimum Wage Exemptions
Although the Alaska minimum wage is higher than the federal minimum wage, there may be special circumstances in which the wage will be lower. If any of the below apply to you, you may be paid a lower wage than the minimum wage of Alaska.
Alaska Under 18 Minimum Wage
If you are under 18 and work part time (under 30 hours a week), you may be paid less than the regular Alaska minimum wage, though there is no clearly established floor. Further, such individuals may not be eligible to receive overtime pay.
Alaska Under 20 Minimum Wage: $4.25
Employers are only allowed to pay starting employees under 20 years of age a training wage of $4.25 an hour during their first 90 days.
Alaska Student Minimum Wage: $8.66
High school or college students who are enrolled in school full-time while working part-time have a minimum wage of $8.66 for a maximum of 20 hours of their work.
Fairbanks Minimum Wage: $9.80 per hour
Fairbanks, AK maintains a slightly lower minimum wage than the rest of the state. It was raised $.05 on January 1, 2019 to $9.80, which was previously $9.75 at the beginning of 2018. There are no new minimum wage increases in Fairbanks in 2020.
Alaska Minimum Wage Increase News
The Governor of Alaska released an official statement to the director of the Alaska Department of Labor and Workforce Development, stating that, under the Alaska Statute 23.10.065, the Alaska Minimum wage will be adjusted from $9.89 to $10.19 at the beginning of 2020. The decision was based upon a rise in the CPI. If the CPI rises again, Alaska may see another increase in minimum wage as early as next year.
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