Applies to: All Employers with Employees in AK
Effective: September 25, 2025
Quick Look
- The Alaska Department of Labor and Workforce Development has published final regulations for the state’s new paid sick leave (PSL) law.
- The regulations address the implementation of the PSL law, providing clarification on topics including, but not limited to, determining employer size, front-loading leave, cash-out policies, compensation rates, and hours worked.
- The regulations also address how employers must notify employees about company paid sick leave policy terms, as well as individual employee PSL usage and accrual.
DISCUSSION
The Alaska Department of Labor and Workforce Development has published final regulations and FAQs for the state’s new paid sick leave (PSL) law. Enacted by ballot measure in 2024, the PSL law went into effect on July 1, 2025, with the regulations taking effect as of September 25, 2025.
By way of background, all employers are covered under the PSL law, and most employees are eligible, with exceptions for government workers, youth and student workers, and employees exempt from minimum wage and overtime under Alaska state law. Under the PSL law, employers with fewer than 15 employees must allow them to accrue and use up to 40 hours of sick leave per year and employers with 15 or more employees must allow annual accrual and use of up to 56 hours of leave. Key aspects of the final regulations are summarized below.
Determining employer size. The regulations explain how employers should count employees to arrive at their size, which determines whether the employer must provide 40 or 56 hours of PSL per year. The regulations direct employers to use a full-time equivalent calculation for the previous calendar year by adding all hours worked by all employees during the calendar year and dividing this sum by the number of hours a full-time employee would work during the calendar year.
Front-loading leave. Notably absent from the PSL law was whether employers are permitted to front-load PSL for employees. The regulations confirm that employers may opt to front-load PSL at the beginning of the year, exempting employers from having to allow employees to carry over their accrued, unused leave at the end of the year.
Establishing an accrual year. The regulations stipulate that unless an employer front-loads PSL, they must establish a consecutive 52-week year during which PSL accrues. Employers that don’t establish an accrual year have a calendar year automatically established.
Cash-out policies. Employers may have a policy that allows (but does not require) employees to “cash out” unused, accrued paid time off and sick leave in place of carryover at the end of the year or at separation of employment. The regulations require the cash-out policy to be in writing and provided to employees. Employees must voluntarily sign off on the cash-out.
Rate of compensation. The regulations outline what methods should be used to determine compensation rates for piece work and workers with commissions, bonuses, noncash compensation and varied hourly rates.
Hours worked. The regulations define “hours worked” to exclude holidays, vacation and uncompensated, nonworking on-call hours, which are further defined.
Alternate employer policies. The PSL law allows employers to meet their PSL obligations with their own paid leave or paid time-off plans, as long as the plan meets the requirements of the law. The regulations further specify that employers must notify employees in writing that the alternate policy will be used to satisfy the PSL law. The regulations also state that leave provided beyond what the PSL statute mandates is not subject to the PSL law.
Employer notice obligations. The regulations require employers to include in employees’ pay statements the amount of PSL the employee has used in the accrual year as well as the employee’s PSL balance.
Employee notice obligations. Under the statute, employees must make a good-faith effort to provide advance notice of foreseeable PSL to their employer. They must also make a reasonable effort to schedule foreseeable paid sick leave in a manner that does not unduly disrupt the employer’s operations. The regulations add that employers may require up to 10 days’ notice of foreseeable leave if this requirement is in a policy provided to the employee. The policy may further require that employees not schedule medical appointments during peak business hours, when work is time-sensitive or when there is a mandatory meeting, if the employee’s absence would unduly disrupt business operations. Employees who were provided with the policy but who fail to follow it may be disciplined or have their PSL denied.
Verification of leave. The regulations provide that employers do not have to pay for sick leave if they have not received documentation they requested (as permitted by the law) to verify leave of more than three consecutive days. However, the regulations require employers to include the verification requirement in their written sick leave policy that is provided to employees.
Notification methods. Under the regulations, employers may satisfy their written notice obligations by providing the notices in person, by mail, by email, in a paycheck, in a printed or electronic handbook or manual, or in a workplace posting.
ACTION ITEMS
- Review full final regulations here.
- Review and update paid sick leave policies as applicable.
- Update employer PSL notification procedures.
- Have appropriate personnel trained on the new requirements.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that OneDigital is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 OneDigital
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