Wage and hour compliance notice for personal care attendant agencies

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 personal care attendants (PCAs) hired by agency based and
consumer directed personal care attendant agencies. 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 PCA agency and the PCA;

• 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

• PCAs subjected to unlawful deductions from wages, the withholding of paychecks, or
who are being compelled to reimburse employers for hours they were directed to work
but were later denied by Medicaid.

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

Outside of any specific Medicaid requirement concerning minimum payments for service, 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 day and/or more
than 40 straight-time hours in a week 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 [5] or 1.5 times the rate of pay for the type of work being performed during overtime
hours. [6] 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. [7] 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.

Personal care attendants 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. [8]

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. [9] 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, 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. [10] When an employee has been
directed to provide services to one consumer and is then assigned to provide services to a second
consumer, 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." [11] 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 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. [12]

                                          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 agency 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.

                                Work Directed by the Employer

In some cases, consumer directed agencies have directed PCAs to provide care to a recipient
prior to the approval of a service plan. Even though a joint-employer relationship exists between
the recipient and the agency, if the agency indicates to the employee (or directs the recipient to
indicate to the employee) that hours are to be worked and then the hours are worked, those hours
must be paid. It may be the case that billed hours are later denied, or a reimbursement for
services billed in error is required by Medicaid for hours that have already been worked. The
employer's responsibility to compensate for hours worked by the employee remains the same. In
this instance, deductions made from an employee's check, the withholding of paychecks, or the
requirement that employees reimburse the employer for such hours out of the employee's wages
already received or anticipated to be received are strictly prohibited.

                                        Room and Board

When an employee lives at the 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. [13]

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. [14]

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.

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. [15]

                                        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. [16] 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. The Wage and Hour office 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. §778.115
[6] 29 C.F.R. §778.419
[7] 29 C.F.R. §785.11
[8] 8 AAC 15.100
[9] AS 23.05.080
[10] 29 C.F.R. §785.38
[11] Jeffcoat v. State, Dept. of Labor, Sup. Ct. Op. No. 3162 (File No. S-1444), 732 P2d 1073 (1987)
[12] AS 23.10.055(6)
[13] 8 AAC 15.160
[14] 29 C.F.R. §785.22(a)(b) (2013)
[15] 8 AAC 15.160
[16] AS 23.05.140