Two Minimum Wage Increases Set for 2025

The increase for 2024 was the largest annual jump since the fixed $1 increments added in the two years following the 2014 ballot initiative. The automatic increase was flat heading into 2022, based on prices dropping in early 2020 and into 2021.

A second wage hike arrives July 1. Due to the passage of Ballot Measure 1, the Alaska minimum wage will increase to $13, and will subsequently increase to $14 on July 1, 2026, and $15 on July 1, 2027. Thereafter the minimum wage shall be adjusted annually for inflation.

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).

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.