What Is the Minimum Wage in Alaska State?

FT Contributor  | 

In the beginning of 2019, Alaska raised the state minimum wage. When the Consumer Price Index 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 $.05. Alaska’s minimum wage is higher than that of the federal minimum wage. However, the nuances surrounding minimum wage can be more complicated than the numbers may show.

Municipal, state, and federal laws are put in place to fairly determining and enforce a proper minimum wage for employees and businesses of different types. Employees who rely on tips, those who work overtime, and those with an annual salary will all earn differently under 2019 Alaska minimum wage pay structures and legislation.

2019 Minimum Wage in Alaska: $9.89 per hour

Starting January 1 of 2019, the Alaskan minimum wage was increased from $9.84 to $9.89 everywhere across the state, except for Fairbanks. Fairbanks AK maintains a slightly lower minimum wage but was also raised $.05 on January 1, 2019 to $9.80, which was previously $9.75 at the beginning of 2018.

Of course, employees, depending the job they work and they 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 for employee to employee and from industry to industry within the same state. Here’s how the Alaska minimum wage factors into some of the most general workplace circumstances.

Tipped Employees: $9.89 per hour + Tips

Many employees rely on tips to survive, because 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 your minimum wage, because Alaska does not allow a tip credit against minimum. Whatever tips an employee makes are added onto their $9.89 an hour wage, not figured into it. While tip credits are not allowed in Alaska, tipped employees do have to adhere to a number of federal laws which may limit or increase your pay.

Weekly Earnings: $395.60

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 is not hard to tally if you multiply $9.89 by 40 — which turns out to be a weekly payment of $395.60. It is worth pointing out that while Alaska does not have a personal income tax, the state may, however, still tax your pension benefits.

Annual Wage: $20,571.20

If you know your weekly wage in Alaska ($9.89) and multiply it by the weeks in a year (52), you can tally a rough annual wage. In the case of Alaska, your annual wage will figure out to be $20,571.20. This is only a rough estimate, as some employees may take unpaid time off for sick days or holidays, and, conversely may work overtime, or end up even asking for a raise.

Overtime: $14.84 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 ($9.89) plus half of that rate ($4.95). This adds up to be $14.84 starting on your 41st hour of work for the week.

Alaska Minimum Wage Exemptions

Although the Alaska minimum wage is higher the federal minimum wage, there may be special circumstances in which your wage may be lower. If any of the below apply to you, expect to 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.
  • Alaska Under 20 Minimum Wage
    • 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
    • High school or college students who are enrolled in school full-time while working part-time will only be paid $8.41 for a maximum of 20 hours of their work.
  • Alaska Tipped Minimum Wage
    • Alaska’s tipped employees must earn a total of $9.89, including tips, every hour. For more information about the tipping minimum wage in Alaska, visit the Alaska Tipped Minimum Wage Laws for 2018, 2019.

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 $9.84 to $9.89 at the beginning of 2019. The decision was based upon a rise in the Consumer Price Index. If the CPI rises again, Alaska may see another increase in minimum wage as early as next year.

Image Sourcehttps://depositphotos.com/

This post was updated June 5, 2019. It was originally published March 19, 2019.