JOYCE A. HERR, CPA, LLC

Effective July 1, 2025, Ballot Measure 1 (which was passed in November, 2024) will go into effect. The FAQ’s for the ballot measure can be found at labor.alaska.gov/lss/ballot-1-faq-2025.html.

Minimum wage will increase to $13 on July 1, 2025, $14 on July 1, 2026 and $15 on July 1, 2027. After that, beginning with January 1, 2028, minimum wage will be adjusted for inflation each year. The attached FAQ’s include the minimum weekly pay for salaried employees.

Ballot Measure 1 also includes paid sick leave for all employees with some exceptions. Item 7 on the FAQ’s lists the employee that are exempt from the paid sick leave requirement.

Employers will be required to give one hour of paid sick leave for every 30 hours worked, up to a maximum of 40 hours per year (for employers with less than 15 employees) or 56 hours per year (for employers with 15 or more employees). If a business already has a paid time off policy in place that meets the requirements for paid sick leave, then they don’[t have to change their current policy. (For example – if your current PTO policy gives employees 2 weeks paid time off per year, you don’t have to add time for the paid sick leave.)

Employees can carry a sick leave balance forward to the new year but usage and accrual is capped to either 40 or 56 hours per year depending on the number of employees. Employers are not required to cash out accrued paid sick leave when an employee leaves but if the employee returns within six months, the employer is required to reinstate the paid sick leave that was accrued and not paid out.

Item 11 on the FAQ’s explains when sick leave can be used. Employers cannot deny an employee’s use of sick leave, penalize an employee for using sick leave or require an employee to arrange coverage for their missed shift. Employers are not allowed to require proof of illness for paid sick leave unless it extends beyond three consecutive workdays. Sick leave should be used to cover the worktime the employee missed and be paid out of the employee’s regular rate.

For those using QuickBooks Payroll, the only way I can see to do it is to award 2 minutes of paid sick leave for every hour worked for hourly employees and 1 hour and 20 minutes per week for salaried employees.

Employers are required to notify their employees in writing of their entitlement to paid sick leave, the amount of sick leave, the terms of use under statute and that retaliation is prohibited. This notification must be given upon hire or within 30 days of July 1 for those currently employed. I am currently working on a notification that can be used.

I have sent the Department of Labor an e-mail asking how to determine the number of employees but have not received a response. The State has also just opened the Ballot Measure to comments for amendments so the requirements may change. I couldn’t find anything that showed what the proposed changes are.

Please let me know if you have any questions or if you need help setting up your payroll for the paid sick leave requirement.

Joyce