What You Need to Know:
- As we previously reported, in November 2024, Alaska voters approved a paid sick leave ballot initiative that called for a statewide paid sick leave law to go into effect July 1, 2025.
- As of yesterday, July 1, 2025, Alaska employers must provide up to 40 or 56 hours of paid sick leave per benefit year to eligible employees, depending on employer size. Specifically, the 40-hour annual accrual and usage caps apply to employers with fewer than 15 employees, while the 56-hour annual accrual and usage caps apply to employers with 15 or more employees.
- Last month, Alaska updated its paid sick leave FAQs and issued proposed regulations on the paid sick leave law. While both are nonbinding, they are instructive for Alaska employers as their compliance obligations begin.
- Alaska was not the only state to have a paid sick leave ballot initiative passed last November. Joining Alaska were Missouri and Nebraska. In terms of Missouri, although the law went into effect on May 1, 2025, it has been overturned by the state legislature with a repeal looking virtually certain for later this summer. This fate will not befall the Alaska paid sick leave law as the Alaska constitution contains a restriction that prevents the legislature from repealing a voter-approved ballot initiative for two years after it becomes law. Therefore, Alaska paid sick leave is here to stay, at least for now.
Here are some highlights and reminders from the Alaska paid sick leave law,[1] FAQs and proposed regulations:
Model Notice: The Alaska law requires employers to provide written notice to (a) all existing employees within 30 days of the effective date (i.e., by July 31, 2025), and (b) thereafter to all newly hired Alaska employees at the commencement of employment. The notice must include the following: (1) that beginning July 1, 2025, employees are entitled to paid sick leave and the amount of paid sick leave; (2) the terms of its use guaranteed under the paid sick leave law,[2] and (3) that retaliation against employees who request or use paid sick leave is prohibited.
Notably, in what is a major departure from other paid sick leave law jurisdictions, the FAQs clarify that the state is not offering a sample notification for employers to use. Instead, employers must create their own notice to distribute to employees.
Employee Threshold: The Alaska paid sick leave law applies broadly to all private employers with at least one employee in Alaska with a few niche exceptions. While the law allows for reduced paid sick leave obligations for “small businesses,” the threshold to qualify is employing fewer than 15 employees, and even then the majority of the paid sick leave standards still apply. An employer meets the 15-employee threshold (i.e., it is not a “small business”) if it employs 15 or more employees. Notably, in counting the number of employees, employers must include full-time and part-time employees (and, per the proposed regulations, which again are not yet binding, seasonal and temporary employees as well).[3]
Accrual: Accrual of paid sick leave began July 1, 2025, or upon commencement of the employee's employment, whichever is later. Eligible employees must accrue at least one hour of paid sick leave for every 30 hours worked. Accrual is capped at 40 or 56 hours per year, depending on employer size.
Unused Sick Leave at Year-End: All accrued, unused paid sick leave must carry over from year to year. To that end, the FAQs acknowledge that “[w]hile usage and accrual of sick leave is capped at either 40 or 56 hours per year, an employee's sick leave balance can exceed this.”
Relatedly, the FAQs state that while an employer can allow employees to request a cash out of earned, unused paid sick leave at year-end, this cash out cannot be mandatory. And, per the proposed regulations, if an employer wishes to implement a voluntary cash out practice for paid sick leave, the employee must acknowledge and voluntarily accept the cash out in writing.
Annual Usage Cap: Regardless of the amount of paid sick leave accrued or carried over, an employer is not required to permit an employee to use more than 56 hours of paid sick leave in a benefit year. Small businesses may limit use to 40 hours of paid sick leave per benefit year.
No Usage Waiting Period: Continuing a trend across more recent paid sick leave laws, the Alaska law does not allow employers to set a new hire usage waiting period. Employees must be allowed to use paid sick leave as it is accrued.
Frontloading: The Alaska paid sick leave law and FAQs are silent on frontloaded grants of paid sick leave at the start of the benefit year and the impact such grants have on employers’ accrual and year-end carryover obligations. The non-binding proposed regulations, however, provide some clarity. The proposed regulations state that employers can provide a sufficient upfront grant of paid sick leave to avoid both yearly accrual and year-end carryover as long as the grant is provided as soon as the employee is eligible to use paid sick leave and on the first day of each benefit year thereafter.
Using PTO or Other Paid Time Off For Compliance: Consistent with many existing state and local paid sick leave laws, the Alaska paid sick leave law allows employers to comply with the law through non-sick paid time off policies (i.e., PTO, vacation time, personal time, etc.), as long as certain criteria are satisfied. In particular, an employer does not need to provide additional paid sick leave to its employees if its non-sick paid time off policy provides the right amount of time off, allows that time off to be used for the same purposes as sick leave under the Alaska law, and applies the same conditions from the Alaska law on use of that time off.
Importantly, the FAQs explain that if an employer provides its employees with a non-sick paid time off benefit that meets the above standards and the employee “uses their entire leave balance for a vacation and later falls ill, they are not entitled to any additional paid leave.” The FAQs further note that because the employee had “the option to use [the non-sick paid time off] as paid sick leave the employer has satisfied the requirements of Ballot Measure 1.” This concept is reiterated in the proposed regulations.
Rate of Pay: The FAQs state that sick leave is “paid out at the employee’s regular rate.” The proposed regulations follow suit and provide that “an employee who uses sick leave will be paid at the employee's regular rate of pay as set out under 8 AAC 15.100.” Section 8 AAC 15.100 is titled “calculating the regular rate” and contains revisions in the same set of proposed regulations as the paid sick leave proposals. The regular rate of pay proposed revisions address different payment criteria and conditions for different groups of employees, including in the paid sick leave context.
Next Steps: As the Alaska paid sick leave law took effect, July 1, 2025, here are some next steps for employers to consider:
- Review existing sick leave or PTO policies and practices, and either implement new policies and practices or revise existing policies and practices to ensure compliance with the Alaska paid sick leave law while doing the same for any related attendance, conduct, anti-retaliation, and discipline policies and practices.
- Train supervisory and managerial employees, as well as HR, on the new requirements.
- Take the necessary steps to comply with the Alaska paid sick leave law employee notice requirement.
- Monitor the Alaska Department of Labor’s website for the release of additional administrative guidance, updated FAQs, and final rulemaking on employers’ paid sick leave compliance obligations.
[1] The states that have enacted a statewide general paid sick leave or paid time off mandate include: (1) Alaska (effective 7/1/2025), (2) Arizona; (3) California; (4) Colorado; (5) Connecticut; (6) Illinois (PTO law); (7) Maine (PTO law); (8) Maryland; (9) Massachusetts; (10) Michigan; (11) Minnesota; (12) Missouri (effective 5/1/2025; very likely sunsets on 8/28/2025); (13) Nebraska (effective 10/1/2025); (14) Nevada (PTO law); (15) New Jersey; (16) New Mexico; (17) New York; (18) Oregon; (19) Rhode Island; (20) Vermont; and (21) Washington. In addition, (22) Virginia has a statewide paid sick leave law that applies only to certain home health workers. There also is a paid sick leave mandate in (23) Washington, D.C.. Further, there are more than two dozen municipalities with paid sick leave or paid time off mandates in the United States.
[2] Specifically, the Alaska paid sick leave law requires that the notice include the terms of paid sick leave use as set forth in AS 23.10.066 and .067.
[3] Currently, the Alaska paid sick leave law, FAQs and proposed regulations do not specifically address whether employers are to count only their Alaska employees or all employees in the United States when determining whether they are a “small business” under the law.
