Wage and hour compliance notice for assisted living homes

Department of Labor and
Workforce Development
Labor Standards and Safety
Wage and Hour
1251 Muldoon Road, Suite 113
Anchorage, Alaska 99504
Main: 907.269.4900

February 5, 2026

Dear Employer,

The Alaska Department of Labor and Workforce Development, Wage and Hour is responding to
ongoing problem areas concerning caregivers hired by assisted living homes (ALH). For the
purpose of education, this letter is being sent as an industry-wide notice to address multiple issues
that appear to be subject to widespread misunderstanding throughout the industry. Among the issues
that have been the focus of questions, complaints and subsequent enforcement activities are:

• The implementation of statutorily required paid sick leave following the passage of Ballot
Measure 1 in the 2024 general election and subsequent new regulation adopted in 2025;

• The absence of written hiring agreements between the employer and the employee;

• Changes to the rate of pay without the required written notice;

• Payment of wages and overtime inconsistent with the Alaska Wage and Hour Act;

• Nonpayment of wages for all hours worked;

• Insufficient or non-existent records of all daily and weekly hours worked by every employee;

• Nonpayment or insufficient payment for the time spent in travel and other work-related
duties;

• Employees being incorrectly classified as independent contractors or volunteers;

• Employees not being paid for overtime when their employers enter into a joint-employer
relationship, and
• Employees subjected to unlawful deductions from wages, the withholding of paychecks, or
who are being compelled to reimburse employers from room and board above regulatory
limits and without written authorization.

We will address each of these issues in this letter and we are always available to discuss any follow-
up questions you may have.

                                    Paid Sick Leave

Following the passage of Ballot Measure 1 in the 2024 General Election, Alaska has adopted laws
guaranteeing paid sick leave to most employees. Alaska's paid sick leave laws went into effect on
July 1, 2025. All covered employees will accrue sick leave at the same rate, 1 hour per every 30
hours worked. These hours worked are cumulative. The hours counted for salary- exempt
employees may be limited to 40 hours per week.

The amount of paid sick leave that can be accrued and used in a year is capped depending on the
number of employees an employer has. While accrual and usage are capped, the sick leave balance
is not capped. Unused sick leave must be carried forward into the next year.

Employers who have existing paid time off programs need to review their policies to assure they
meet the minimum standards established by the new law. Employers are free to offer a more
generous plan to their employees if they choose.

Employers are prohibited from interfering with, restraining, or denying the use of paid sick leave.
They cannot require employees to find coverage for missed shifts or take adverse actions against
employees for the usage of paid sick leave. Documented verification of the need for paid sick leave,
such as a doctor's note, can only be requested for paid sick leave usage of more than three
consecutive workdays and must comply with statutory requirements. [1]

The Department has published frequently asked questions to aid with the understanding of Alaska's
new sick leave laws and has provided a link to the ballot measure language. These can be found at:
https://labor.alaska.gov/lss/sick-leave-faq.html.

       Written Hiring Agreements and Changes in the Rate of Pay (see below)

Under Alaska Labor Law, employers must provide all employees with a written hiring agreement.
This must include their rate of pay, where they receive payment, and the established payday which
cannot occur less frequently than once per month (i.e. daily, weekly, bi-weekly, or monthly). Any
time the employer elects to make a change, they must provide the employee with written
notification of the change no later than on the payday before the time of change. The change cannot
be made in the middle of a pay period and cannot be retroactive. [2]

                            Minimum Wage and Overtime

Except as otherwise provided for in law, an employer shall pay to each employee a minimum wage,
for all hours worked in a pay period, whether the work is measured by time, piece, commission or
otherwise.

The current Alaska minimum wage is $13.00 per hour as of July 1, 2025. The minimum wage will
increase to $14.00 on July 1, 2026 and $15.00 on July 1, 2027, due to the passage of Ballot Measure
1 in 2024. Alaska's minimum wage will return to annual adjustment using the Consumer Price
Index for the previous calendar year on January 1, 2028. Ballot Measure 1 only changes the
minimum wage rate; it does not change to whom the minimum wage applies.

Barring any allowable exemptions, an employee who works over 8 hours in a workday and/or more than 40
straight-time hours in a workweek must be paid 1.5 times their regular rate of pay [3] (this requirement of the
law is referred to as "overtime" [4]). Furthermore, if an employee is paid multiple rates of pay, the employer
has the option to pay the overtime by using a weighted average formula or 1.5 times the rate of pay for the
type of work being performed during the overtime hours. [5] We recommend employers document which
method they will use in hiring agreements.

Time spent working is compensable time, even if an employee's CPR license or other certifications
have lapsed. If the work is directed by or allowed by the employer or if the employer has reason to
suspect that the employee worked, the time spent working is compensable. [6] An accurate record of
all daily and weekly hours worked must be kept, and most importantly, the employee must be paid
correctly for all these hours.

                                         Salary

Payment on a salary basis does not eliminate overtime requirements. Individuals who are paid on
a non-exempt salary basis must be paid in a manner consistent with the minimum wage and
overtime requirements of the Alaska Wage and Hour Act.

Caregivers in assisted living facilities are not specifically exempt from overtime requirements and
must be paid 1.5 times their regular rate of work performed in excess of 8 hours per day and/or 40
straight time hours in a work week. Payment on a salary basis does not eliminate overtime pay
obligations. If a fixed and recurring pay rate for a set period of time, i.e. week or month, (salary)
has been established, the applicable compensation basis must be converted to an hourly rate when
determining the regular rate of computing overtime compensation and a written contract must be
provided showing the hourly rate, the overtime rate, and the fixed number of hours worked each
week to arrive at the specified, fixed salary amount. If the contract fails to establish a fixed number
of daily and weekly hours that the salary is intended to compensate, or if the actual hours of work
deviate from the hours specified in the contract without a corresponding adjustment in hourly pay,
the salary will be considered to be compensation for an 8 hour workday and 40-hour workweek,
and overtime will be computed on that basis. [7]

To be properly classified as a salary exempt employee, an employee must meet a three-part test.
First, they must be paid on a salary basis. This means they are paid a fixed rate regardless of hours
worked with limited exception. Second, they must be paid the minimum salary level which is set at
two times the minimum wage for a 40-hour workweek. This is currently $1,040/week and will
increase to $1,120/week on July 1, 2026, and $1,200/week on July 1, 2027. Third, the employee
must meet the duties test by performing work that falls into an approved category of executive,
administrative, professional, computer, or outside sales employee. To determine if an employee
qualifies as a salary-exempt employee consult the Code of Federal Regulations 29 C.F.R. §541,
Alaska Statute 23.10.055, and Alaska Administrative Code 8 AAC 15.908, or contact the Wage and
Hour office for additional information.

                            Accurate Record of Hours Worked

An employer shall keep an accurate record of all the daily and weekly hours worked by each
employee. [8] This recordkeeping requirement applies to all employees regardless of how they are
compensated or how they are classified to include salary-exempt employees. A mere record of
hours scheduled may not be sufficient to account for all the hours actually worked by the employee.
As a best practice, employees should also keep a record of hours separately from their employer's so
they can check the employer's accounting for accuracy at the time of payment.

The time worked may also include, but is not limited to, time spent preparing to deliver services to
the recipient and time spent on post-provision duties (such as preparing records or cleaning at the
end of the shift, travelling between facilities, doctor's appointments for clients, trips to the store to
purchase items for the assisted living home, etc.).

The burden to keep hours is borne by the employer under statute. Requiring an employee to keep a
timesheet does not absolve an employer of this responsibility. Failure of an employee to follow
employer reporting policy or issues with electronic reporting systems also do not resolve employers
of the responsibility to maintain employee records and ensure employees are paid on the
appropriate payday. Failure to follow employer policies may result in adverse administrative
actions up to and including termination, it cannot result in the withholding of pay.

                                          Travel Time

The employer must determine whether time spend in travel is working time. In contrast to regular
home to work travel, which is not compensable, if time spent in travel is part of the principle activity
of the employee's work day, such as taking a client to a doctor's appointment, the time is
considered work and must be counted as hours worked. [9] When an employee has been directed to
provide services at one facility and is then assigned to provide services at a second facility, the time
spend in travel between the two sites is also compensable time. Put simply, travel from job site to
job site during the workday must be counted as hours worked.

                  Independent Contractor, Volunteer, or Employee?

Frequent calls to Wage and Hour have also raised the issue of caregivers being classified as
independent contractors rather than employees. When determining whether or not the relationship
between the business and the alleged employee is subject to the Alaska Wage and Hour Act and the
Fair Labor Standards Act (FLSA), it must be determined "whether the worker is dependent upon
finding employment in the business of others. If the facts show such a dependency, the worker is an
employee." [10] Employers are encouraged to review the factors established by the Alaska Supreme
Court (see footnote #10). In general, all caregivers should be treated as employees to avoid issues
with agencies such as Wage and Hour, Workers' Compensation, Unemployment Insurance taxes,
and IRS taxes, unless the alleged employer can clearly demonstrate that a worker is an independent
contractor. This is very unlikely unless the caregiver is the owner of the ALH business. The mere
possession of an Alaska business license, the provision of an IRS 1099 form, or simply calling
someone an independent contractor is not enough to substantiate independent contractor status.

With regard to volunteers, a for-profit business is barred from using volunteer labor. [11]

                                    Change Rate of Pay

The employer can change the rate of pay as long as the employee is given written notice of the
change the payday before it takes effect. For example, if the employee's normal payday (the day the
employee is paid their wages) is on the 20th of the month, the employer could give the employee
written notice of a change in the rate of pay any day up to and including the 20th. All work done by
the employee after the 20th would be at the new rate.

A contractual clause that merely advises an employee of the possibility of a future change does not
constitute notice of an actual change in pay. The statutory timing requirement "on the payday
before the time of change" requires notice that is contemporaneous with the change itself. Notice
provided months or years in advance does not satisfy the plain-language requirements of the statute.

For example, a clause in a hiring agreement stating that an employee's rate of pay may be reduced if
the employee is late more than three times in a month, or if the employee fails to submit a
timesheet, does not notify the employee that a pay reduction will occur at a specific time. Because
such provisions do not provide notice of the actual change when it is implemented, they do not
constitute adequate notice under the statute.

                         Joint-Employer Relationship

A single individual may be an employee of two or more employers at the same time. A
determination of whether the employment by two or more employers is to be considered joint
employment or separate and distinct employment depends upon all the facts in the particular case. If
all the relevant facts establish that two or more employers are acting entirely independently of each
other and are completely disassociated with respect to the employment of a particular employee,
who during the same workweek performs work for more than one employer, each employer may
disregard all work performed by the employee for the other employer(s). On the other hand, if the
facts establish that the employee is employed jointly by two or more employers (i.e. that the
employment by one employer is not completely disassociated from the employment by the other
employer(s)) all of the employee's work for all of the joint employers during the workweek is
considered as one employment. In this event, all joint employers are responsible, both individually
and jointly, for compliance with Alaska's overtime and minimum wage requirements with respect
to the entire employment for the particular workweek and pay period. In simple terms, if one ALH
hires a caregiver for 24 hours over three days, and a joint employer hires the same caregiver for 24
hours over three days, 8 hours of overtime would be due.

With regard to assisted living facilities, the mere fact that each facility is a separately licensed
business, is owned by a relative, or maintains separate payrolls is immaterial. If the employee
performs work which simultaneously benefits two or more employers, a joint employment
relationship likely exists. In situations where there is an arrangement between the employers to
share the employee's services, or where one employer is acting directly or indirectly in the interest
of the other employer(s), a joint employment relationship would exist.

                         Employees Living in the ALH

Assisted living facilities often hire employees who reside in the assisted living home on a
permanent basis or for extended periods of time. Ordinarily, the employee may engage in normal
private pursuits and thus have enough time for eating, sleeping, entertaining, and other periods of
complete freedom from all duties, such as time when they may leave the premises for their own
purposes. [12] Though an employee may live in the assisted living home, not all of the time spent on
the premises needs to be counted as work time. However, if an employer indicates to the employee
that hours are to be worked, and the hours are actually worked, those hours worked must be paid. If
an employee is engaged to wait by the employer and cannot use their time effectively for their own
purposes, the employee is expected to be paid for their time spent waiting. [13]

If an employee is completely relieved from all duties for 20 minutes or more during which the
employee may use the time effectively for his/her own purposes, then the periods need not be
counted as time worked. [14] Again, the employer is expected to keep an accurate record of the daily
and weekly hours worked by each employee to assure proper payment for the time worked.

                                  Room and Board

When an employee lives at the assisted living home, the employer is allowed to deduct an amount
from the employee's wages for the reasonable cost of room and board. The amount of this
deduction must be reasonable and without profit to the employer and based on a written agreement
signed by the employee. Use of the facilities must be voluntarily, and no deduction for room and
board is lawful in any situation in which an employer requires an employee to use the employer-
provided facilities. Hiring or firing employees based upon the employee's willingness to authorize
deductions for room and board costs from their check is not considered voluntary. [15]

Furthermore, unless the employer and the employee have a written agreement, that meets the
requirements of Alaska regulation 8 AAC 15.160, signed by the employee, before the deduction, the
employer is prohibited from seeking to retroactively deduct the cost of room and board from their
wages as an offset against wages due upon termination or wage deficiencies subject to the
collection by the department. An employer may deduct an amount from the minimum wage or
overtime rates set out under AS 23.10 of an employee's earnings, to reimburse an employer for the
reasonable cost of furnishing board or lodging based on a written agreement. A deduction of
$20 per day or less for board or lodging will not require a determination by the director unless
evidence indicates that the deductions unreasonable for the board or lodging provided or results in a
profit to the employer.

Before an employer decides they will implement a room and board agreement, they should consult
Alaska Regulation 8 AAC 15.160(d) for the full list of requirements.

                                     Sleep Time

If an employee is required to be on duty for a 24-hour period of time, the employer and the
employee may agree (preferably in writing) to exclude designated meal periods (no less than 20
minutes) and regularly scheduled sleeping time of up to 8 hours from hours worked, provided
adequate sleeping facilities are furnished by the employer and the employee can usually enjoy an
uninterrupted night's sleep. If the sleeping period consists of more than 8 hours, only 8 hours will
be credited. If there is no agreement in place, the 8 hours of sleeping time and lunch periods are to
be counted as hours worked.

If the sleeping period is interrupted by work, this time is compensable. If the period is interrupted to
such an extent that the employee cannot get at least 5 hours of uninterrupted sleep, the entire period
must be counted as hours worked. [16]

For further information on this subject you should study the information provided on the U.S.
Department of Labor website found at https://www.dol.gov/agencies/whd/direct-care/sleep-time.

                                       Deductions

An employer and employee may enter into a written agreement to provide for deductions of
monetary obligations of an employee. An employer may not require compensation from an
employee to which they are entitled through force, intimidation, or threat of dismissal from
employment, or any other manner. A written agreement for deductions is not valid if it would
reduce the employee's wage rate below the statutory minimum wage and overtime rates.

An employer may not deduct from an employee's wages any of the following:

    •   Customer checks returned due to insufficient funds or any other reason,
    •   Non-payment for goods or services as a result of theft or credit default,
    •   Cash or cash register shortages, unless the employee admits willingly and in writing to
        having personally taken the specific amount of cash that is alleged to be missing,
    •   Lost, missing, or stolen property, unless the employee admits willingly and in writing to
        having personally taken the specific property alleged to be lost, missing or stolen,
    •   Damage or breakage costs, unless clearly due to willful conduct of the employee and the
        employee has acknowledged responsibility in writing.

An employer shall give each employee a written or electronic statement of earnings and deductions
for each period. The statement of earnings and deductions must contain the employee's:

    •   Rate of pay;
    •   Gross wages;
    •   Net wages;
    •   Beginning and end dates of the pay period;
    •   Federal income tax deductions;
    •   Federal Insurance Contribution Act deductions;
    •   Alaska Employment Security Act contributions;
    •   Board and lodging costs;
    •   Advances;
    •   Straight time and overtime hours actually worked in the pay period;
    •   Other authorized deductions;
    •   Sick leave used in the accrual year established under 8 AAC 15.107; and
    •   Sick leave balance [17]

                                     Final Paycheck

If the employment is terminated by the employee, payment is due at the next regular payday that is
at least three days after the employer received notice of the employee's termination of services. If
employment is terminated by the employer, regardless of the cause for the termination, payment is
due within three working days after the termination. [18] The day of firing, weekends, and bank or
state holidays, are not included in these three days. If an employer violates this statute, the
employer may be required to pay the employee a penalty in the amount of the employee's regular
wage, salary or other compensation from the time of demand to the time of payment, or for 90
working days, whichever is the lesser amount.

                        Workers' Compensation Coverage

Any business operating in Alaska with even one part-time employee is required to carry workers'
compensation insurance under Alaska Statute 23.30.075. The policy must be bound in the State of
Alaska; Alaska is not a reciprocal state and does not recognize coverage bound in any other state or
country, even if the policy purports to cover an injury occurring in Alaska. There is no exemption
for family members or friends for purposes of workers' compensation liability. Employee status is
determined using the independent contractor definition found in Alaska Statute 23.30.230(a)(12).
The criteria in this definition are all-inclusive. Penalties for not having workers' compensation
coverage are severe. It is a crime under the Alaska Workers' Compensation Act for employers to
misclassify employees or deduct all or any portion of workers' compensation premiums from an
employee's paycheck. If you have questions regarding workers' compensation requirements, please
download and review the Employer's Guide to the Alaska Workers' Compensation Act at
https://labor.alaska.gov/wc/publications/employer_guide_to_wc_act.pdf or contact the Alaska
Division of Workers' Compensation at (907) 269-4980.

                       Unemployment Insurance Coverage

An employer misclassifying a worker as an independent contractor instead of an employee may be
liable for penalties and interest for failure to report the worker and pay associated taxes. If you have
questions regarding unemployment tax requirements, please contact Employment Security Tax at
(888) 448-3527.

                                      Resources

In conclusion, a business that is involved in practices that are not consistent with Alaska wage and
hour laws must correct the discrepancies immediately to avoid future enforcement actions. We hope
that your organization will take this opportunity to conduct an internal review and voluntarily make
any wage adjustments. We have noted several applicable statutes and regulations for your review.
Employers are encouraged to conduct a complete review of Alaska's wage and hour laws and
regulations as published in the Pamphlet 100 publication, which can be found at:
https://labor.alaska.gov/lss/forms/pam100.pdf. Our website can be found at:
https://labor.alaska.gov/lss/whhome.htm.

Wage and Hour provides a cost-free counseling service to Alaska employers, and we invite you to
take advantage of this service. A regular, monthly webinar is offered to employers and employees
concerning wage and hour laws. Check our website for the webinar schedule and contact our office
at (907) 269-4900 for registration. In addition, an investigator is on duty each business day to
answer any questions you may have.

Alternatively, you may wish to contact a private attorney. The Alaska Lawyer Referral Service may
be able to assist you with locating an attorney to address your specific concerns. You may contact
this office at 1-800-770-9999 or visit the following website for additional information:
https://www.alaskabar.org.

[1] AS 23.10.067
[2] AS 23.05.160
[3] 8 AAC 15.100
[4] AS 23.10.060
[5] 29 C.F.R. §778.419
[6] 29 C.F.R. §785.11
[7] 8 AAC 15.100
[8] AS 23.05.080
[9] 29 C.F.R. §785.38
[10] Jeffcoat v. State, Dept. of Labor, Sup. Ct. Op. No. 3162 (File No. S-1444), 732 P2d 1073 (1987)
[11] AS 23.10.055(6)
[12] 29 C.F.R. §785.23
[13] 29 C.F.R. §785.15
[14] 29 C.F.R. §785.15
[15] 8 AAC 15.160
[16] 29 C.F.R. §785.22(a)(b) (2013)
[17] 8 AAC 15.160
[18] AS 23.05.140