Alaska Issues Final Rules Implementing Paid Sick Leave Law

The Details 

Background

Under the voter-approved ballot measure, employers in Alaska are required to provide their employees with paid sick leave as follows:

• Employers with 15 or more employees must allow employees to accrue a minimum of one hour of paid sick leave for every 30 hours worked, but employees aren’t entitled to accrue or use more than 56 hours of paid sick leave per year, unless their employer sets a higher limit.
  
  
• Employers with fewer than 15 employees must allow employees to accrue a minimum of one hour of paid sick leave for every 30 hours worked, but employees are not entitled to accrue or use more than 40 hours of paid sick leave per year, unless their employer sets a higher limit.
  
  

The requirement went into effect on July 1, 2025.

Final Regulations

On September 25, 2025, Alaska’s Department of Labor and Workforce Development issued final regulations implementing the law. The regulations address several areas that were left unaddressed or unclear by the law, including but not limited to the following.

Determining Employee Count

To determine the amount of paid sick leave accrual (56 hours or 40 hours), the final regulations require the employer to calculate the number of Full-Time Equivalents (FTEs) employed during the previous calendar year by adding the total number of hours worked by all part-time and full-time employees during the calendar year and dividing the sum by the maximum amount of regular hours for a full-time employee during the time period.

If a business didn’t operate in the previous calendar year, the employer must initially calculate FTEs based on the first three months of operation during the current calendar year, and must thereafter recalculate FTEs on a quarterly basis until a calendar year calculation can be completed.

Rate of Pay During Leave

The law didn’t address the rate at which employees must be paid during paid sick leave.

The final regulations require that employers pay an employee who uses sick leave at the employee's “regular rate of pay” or the applicable minimum wage, whichever is greater. The final regulations also require employers to calculate the “regular rate of pay” for the leave using the same state rules that apply to overtime pay, as amended (8 AAC 15.100). See the text of the regulations for details.

Accrual Year

Under the final regulations, employers must establish a consecutive 52-week period for purposes of calculating an employee’s annual accrual of paid sick leave. If an employer fails to specify an accrual year, an employee must accrue paid sick leave on a calendar year basis. This requirement doesn’t apply if the employer frontloads the leave (see below).

Carryover

Under the law, accrued, unused paid sick leave must carryover to the following year, but an employer isn’t required to allow an employee to use more than the amounts described above (56 hours or 40 hours depending on employer size).

Frontloading

The voter-approved law didn’t address whether employers may provide a lump sum of paid sick leave each year instead of using the accrual method, a practice commonly known as frontloading, and whether carryover would be required in such situations (if allowed).

The final regulations expressly allow employers to frontload paid sick leave. The final regulations also make clear that an employer that frontloads paid sick leave isn’t required to carryover unused leave to the following year.

An employer may prorate the amount of annual paid sick leave assigned to an employee who is employed less than a year.

If an employer frontloads paid sick leave, the employer must assign to a full-time employee at least the minimum amount of annual sick leave and to a regular part-time employee no less than the calculated amount of sick leave that the employee would accrue in a year based on the employee's normally scheduled hours.

An employer may assign to an irregular part-time employee an amount of sick time based on the employee’s average past hours worked.

An employer must increase the assigned paid sick leave of a part-time employee who would be entitled to accrue more leave than the employer assigns to them, based on the number of hours the employee actually works in a year.

Voluntary Cash-Out

Under the final regulations, an employer may have a written policy that allows an employee to cash out the employee's accrued, unused paid sick leave during the course of the employee's employment or if the employee separates from employment if:

• The employee is given the option to:
  
  
• The employee acknowledges and voluntarily accepts the cash-out of sick leave in writing.
  
  

Employer Notice

The voter-approved law requires employers to give employees a written notice with certain information about the paid sick leave law at the commencement of employment. Employers were required to provide the notice to existing employees earlier this year.

The final regulations specify that the notice include the following.

• The employee's entitlement to paid sick leave when employment begins;
• The rate at which the employee will accrue paid sick leave;
• The authorized purposes under which an employee may use paid sick leave;
• The employer's intention to use a paid time-off program to meet the requirements, if applicable (see below);
• Other reasonable notice or verification requirements for the employee when using paid sick leave (see below);
  
  
• Notice that retaliation by the employer for the employee's lawful use of paid sick leave and other rights provided is prohibited.
  
  

The final regulations allow employers to comply with the requirement by:

• Distributing the written notice to each employee personally, by United States mail, e-mail, or including the notice in an employee's paycheck;
  
  
• Incorporating the written notice into a handbook or manual made available to employees, whether in a print or electronic format; or
  
  
• Posting the written notice in a conspicuous and accessible location in each workplace of the employer.
  
  

Existing Paid Leave Policies

Under the voter-approved law, any employer with a paid leave or paid time off policy that makes available an amount of paid leave sufficient to meet the requirements of the law that may be used for the same purposes and under the same conditions as paid sick leave under the law isn’t required to provide additional paid sick leave.

The final regulations further provide that paid time off provided to an employee through another paid leave or paid time off policy satisfies the requirement to provide paid sick leave only if:

• The policy meets the requirements of the paid sick leave law;
  
  
• The employer notifies the employee that the policy will be utilized to meet the paid sick leave requirements;
  
  
• Paid time off accrues at a rate of no less than one hour for every 30 hours worked as an employee; and
  
  
• An employee may utilize accrued paid time off in the bank on the same terms for the purposes authorized by the paid sick leave law.
  
  

Employee Notice and Verification

Under the voter-approved law, when the need for paid sick leave is foreseeable, the employee must make a good faith effort to provide notice to the employer in advance of the use of paid sick leave and make a reasonable effort to schedule use of paid sick leave in a manner that doesn’t unduly disrupt the employer’s operations.

The final regulations limit employers to requiring no more than 10 calendar days' advance notice for a foreseeable absence.

For an unforeseen absence, the employee must notify the employer before the start of the employee's shift or as soon as is possible, depending on the circumstances, according to the final regulations.

Under the voter-approved law, if an employee uses sick leave for more than three consecutive scheduled workdays, an employer may require the employee to provide reasonable documentation to verify the employee's need for the paid sick leave.

The final regulations further require that, to maintain such a verification requirement, an employer must include it in the employer's sick leave policy and provide the paid sick leave policy to the employee. Employers are prohibited from requiring that the verification explain the nature of the employee's illness or details related to domestic violence, sexual assault, harassment, or stalking that necessitated the employee's use of paid sick leave. Days that an employee isn’t scheduled to work aren’t included in the calculation of three consecutive scheduled workdays.

Pay Statements

By way of background, Alaska requires employers to provide employees with a written or electronic statement of earnings and deductions for each pay period. The paid sick leave law didn’t address whether such statements must include information about paid sick leave.

The final regulations expressly require employers to also include the following information in such statements:

• Paid sick leave used by the employee in the accrual year; and
• The employee’s paid sick leave balance

Next Steps

• Read the final regulations in full.
• Review paid sick leave policies and practices to ensure compliance with the regulations.