Second Minimum Wage Hike of 2025 Arrives on July 1
Photo Credit: ILixe48 | Envato
Thirteen is a lucky number for Alaskans earning minimum wage. Effective July 1, the current minimum of $11.91 per hour increases by $1.09 because of a ballot initiative that passed at the November 2024 election.
The increase to $13 per hour is the second wage hike this year, after the automatic inflation adjustment that took effect January 1 because of a 2014 ballot initiative.
On the Way to $15 per Hour
The Alaska minimum wage applies to all hours worked in a pay period, regardless of how the employee is paid—whether by time, piece, commission, or otherwise. All actual hours worked in a pay period multiplied by the Alaska minimum wage is the very least an employee can be compensated by an employer unless the employer can clearly show that a specific exemption exists.
Tips do not count toward the minimum wage. Further, under Alaska law, public school bus driver wages must be no less than twice the current Alaska minimum wage. Also, certain exempt employees must be paid on a salary basis of not less than twice the current Alaska minimum wage based on a forty-hour work week to maintain their exempt status. Thus, the minimum salary for these workers will increase from $48,796.80 per year (or $938.40 per week) in 2024 to $49,545.60 per year (or $952.80 per week).
Current Issue
July 2025
The federal minimum wage remains $7.25 per hour, unchanged since 2009, and twenty states use that level. Workers in Alaska are entitled to the higher state-mandated minimum. Twenty states have a higher minimum wage than Alaska.
Further voter-approved increases are coming over the next two summers. Alaska’s minimum wage will subsequently increase to $14 on July 1, 2026, and to $15 on July 1, 2027. Thereafter, automatic inflation adjustments resume on January 1, 2028.
July Also Brings Paid Sick Leave
In addition to further raising the state’s minimum wage, the ballot measure requires paid sick leave, also effective July 1. At a basic level, the law grants employees one hour of sick leave for each thirty hours worked.
Employees classified as exempt earn sick leave based on forty hours worked in a week, not every thirty, unless the normal work week is less than forty hours. Part-time employees earn leave at the same rate as full-time workers, so it necessarily accrues more slowly.
Companies with fourteen or fewer employees must let employees accrue and use up to forty hours in a year, or five eight-hour days. Companies with fifteen employees or more must let employees accrue up to fifty-six hours, or seven eight-hour days of sick leave.
The law allows sick leave to be used for injury, illness, caring for a family member (which could include a roommate), or when necessary to receive care or legal help related to domestic violence, sexual assault, or stalking. Employees need not provide proof of illness for paid sick leave, and employers may not ask unless the absence extends beyond three consecutive workdays.
Paid sick leave does not apply to workers already exempt from minimum wage and overtime, such as agriculture, domestic service, and federal and state workers. Minors under age 18 working less than thirty hours per week are exempt, as are student learners and apprentices. Employed prisoners, work therapy patients, or seasonal employees at a nonprofit residential summer camp are also exempt.
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