ast November, 183,744 Alaskan voters approved Ballot Measure 1, amending Title 23 of Alaska statutes to secure favorable wages and benefits. In a few short months, Ballot Measure 1 goes into effect, increasing Alaska’s minimum wage, establishing sick leave for most employees, and altering certain mandatory meeting requirements. By July 1, businesses will need policies and processes in place to ensure they comply with the new law.

The minimum wage in Alaska, as of this writing, is $11.91 per hour. It increased automatically on January 1 by $0.18 due to a 2014 ballot initiative that requires automatic annual inflation adjustments tied to the consumer price index in Anchorage. Another raise arrives on July 1, when Ballot Measure 1 takes effect and sets the minimum wage at $13 per hour.

A year later, the wage will rise again to $14, and then again in 2027 to $15. On January 1, 2028, automatic inflation adjustments return. In addition to yearly increases, the new law also states that Alaska’s minimum wage must be greater than $2 above the federal minimum wage, which has remained at $7.25 per hour since 2009.

Some salaried employees who are exempt from overtime will also see a pay increase. Under Alaska Statute 23.10.055, salaries for exempt employees must be at least twice the minimum wage based on a forty-hour week. Thus, salaries will also increase at a set rate over the next three years. In 2025, minimum salaries will increase from $952.80 per week ($49,546 annually) to $1,040 per week ($54,080 annually). Another increase in 2026 will raise salaries to $1,120 per week ($58,240 annually) and in 2027 to $1,200 per week ($62,400 annually). After that, salary levels will continue to adjust as changes are made to the hourly minimum wage.

Kristal Graham, associate attorney at Davis Wright Tremaine, says now is the time for businesses to look at their pay practices. Although businesses have adapted to smaller wage increases, she advises employers to carefully rework the calculations given the significant changes, especially for salaried employees. Individuals employed in executive, administrative, and professional positions are exempt only if their salary is more than twice the state minimum wage.

“There are very limited exemptions,” says Graham. “They should make sure they are ready to comply with the new minimum wage for hourly and salary employees and make sure they have finances set aside.”

Rebecca Savidis, owner/principal at Alaska HR, says business owners should analyze the financial impacts of the scheduled wage increases and determine how they will affect budgets. She says it’s easy to see the plus side of raising the state minimum wage: people will have more money to spend, which benefits the economy. However, she says this new law can have some unintended consequences.

“In an effort to offset the financial impact, businesses may increase the cost of their goods and services, decrease their staff, or do both,” says Savidis.

Alaska employers have a decade of experience with voter-mandated minimum wages, but sick leave requirements are new. Starting July 1, all private sector employees will begin to accrue paid sick leave if they aren’t already. The new law requires employers with fifteen or more employees to provide one hour of sick leave for every thirty hours worked, up to fifty-six hours per year. Employers with fewer than fifteen employees will also accrue one hour for every thirty hours worked, but the annual maximum is forty hours. Overtime-exempt employees are assumed to work forty hours a week, but in cases where a salaried employee’s normal work is less than forty hours, paid sick leave is based upon that shorter time. The maximum annual accrual is also the maximum hours of paid sick leave an employee may use annually.

Graham explains that paid leave can be used for physical or mental illness, injury, health conditions, or doctor visits for diagnosis, preventative care, and treatment. This includes sudden illness and routine care. Sick leave can also be used to care for immediate family members, a domestic partner, a foster child, a parent, or any other blood relation or close association that is equivalent to a family relationship.

“The definition is broad,” says Graham. “An employee can say they are taking care of a roommate or friend with deep enough ties that they could be considered family and, under this definition, qualify for paid sick leave.”

Absences due to domestic violence, sexual assault, or stalking also qualify for sick leave. This includes medical or psychological attention, services from a victim’s aid organization, relocation or steps to secure an existing home, legal services or participation in an investigation, and civil or criminal proceedings.

Regardless of the reason, an employer can’t ask for documentation for an absence, such as a doctor’s note, unless the employee has used paid sick leave for more than three consecutive workdays. Graham says this is an ambiguous area for some employers, especially if an employee frequently takes leave unexpectedly yet makes sure to stay under the three-day limit. The only potential stopgap in this situation is that an employer is not required to allow an employee to use more than the maximum accrual amount per year, even though unused hours will carry over from year to year.

Savidis says there are exceptions to this provision. For instance, employees working for a nonprofit’s seasonal summer camp, employees under the age of 18 working less than thirty hours per week, and apprentices or student learners are exempt from the sick leave benefit. She says there are additional exemptions aligned with some, but not all, of Alaska’s minimum wage exemptions.

Given the changes, Savidis encourages employers to review current leave policies to see if they meet the new requirements. She says employers who don’t have paid sick leave policies may not know where to start, may be unaware of the new requirements, or mistakenly operate under the belief that the law doesn’t apply to them. Other employers may be overwhelmed, especially if they don’t have an existing paid time off or sick leave policy or an HR professional on staff. In those cases, she recommends working with HR consultants or legal counsel to guide them through the process. Savidis also recommends that all employers analyze the capacity and limitations of their payroll system to make sure it can track sick leave accruals.

“I’ve already been asked by clients to assist them in operationalizing these new requirements, particularly the paid sick leave element,” says Savidis. “There are also attorneys doing the same for their clients. I encourage employers to prepare now. July 1 is only a few months away.”

To understand the basics, Savidis recommends visiting the Alaska Department of Labor and Workforce Development (DOLWD) Labor Standards and Safety Division online Ballot Measure 1 FAQ. DOLWD is taking public comment this spring to gain additional feedback before finalizing regulations. Businesses should anticipate further guidance from DOLWD before the new law goes into effect.

The final component of Ballot Measure 1 is what’s known as rights to avoid speech. This section addresses “captive audience meetings” held by an employer for communicating his or her religious and political matters. “Political matters” is broadly defined and includes topics relating to elections for political office, political parties, candidates, proposed legislation or regulations, and decisions about joining or supporting a political party or political, civic, communal, fraternal, or labor organization. Under this definition, employees are also no longer required to participate in employer meetings to discuss union activity.

This doesn’t mean that all mandated meetings are off the table. Employers are still allowed to communicate information that is required by law, necessary for employees to complete their work, or issues relevant to the workplace. Communication about the employer’s business is also valid. Employees in an institution of higher education are still required to communicate with their employer on coursework, symposia, or academic programs. The final part of these exemptions states that employees of bona fide religious organizations are required to attend or participate in employer-sponsored meetings that discuss the employer’s religious beliefs, practices, and tenets.

Graham says this provision could face pushback in the future. She says similar laws in other states have already faced First Amendment and Fourteenth Amendment challenges with various outcomes. Alaska Attorney General Treg Taylor expressed concerns prior to the general election with this provision, even though it is not clearly unconstitutional under controlling authority.

“It will be interesting to see if anyone challenges this,” says Graham. “We reviewed the ballot measure and think it’s constitutional on its face but did have concerns with this aspect of the law. However, people should be ready to comply.”

While the new law benefits employees financially and in their workplace culture, the 2024 initiative passed by a much closer margin than its predecessor in 2014, 58 percent versus 70 percent.

Supporters argued that Washington, Oregon, and California have significantly higher minimum wages than Alaska and minimum paid sick leave, so the ballot measure should help Alaska compete for workers.

But there is a cost. Apart from costs to employers, DOLWD estimates more than $300,000 in new state expenses to carry out the voters’ will. A fiscal note anticipates hiring an additional administrative assistant to handle an extra twenty to twenty-five inquiries per week. Figuring that 10 percent of those calls will result in follow-up, DOLWD expects to hire two investigators to enforce and implement the provisions.

Those positions would also be responsible for developing outreach materials, namely 10,000 posters summarizing the Alaska Wage and Hour Act; 10,000 “Know Your Rights” child labor brochures; and 3,000 Alaska fishing industry brochures. The department puts the printing cost at $4,707.

Language in the ballot measure indicates that employers violating this law are liable for lost wages or damages to the employee as appropriate and allowable by law. Savidis says retaliation claims regarding paid sick leave or rights to avoid speech may also lead to further damages.

Savidis summarizes, “Right now, employers need to separate their political views and focus on compliance and operationalizing the requirements of Ballot Measure 1.”