The Alaska minimum wage remains at $7.15 per hour, while the new federal minimum wage will be $7.25 per hour. This means that for the first time since the Alaska minimum wage was passed, the state rate is lower than the federal one.
On July 24, 2009, the federal minimum wage will increase by 70 cents from $6.55 per hour to $7.25 per hour. On that day, thirteen states will increase their minimum wage rate, too. These states, including Oklahoma, Texas, simply adopt the federal minimum as their own, so when the federal rate changes their minimum wage rates change, too.
As a result of these change all employers will be required to update their labor law posters. Businesses can obtain updated posters from www.laborlawcenter.com.
The higher federal minimum wage will affect some but not all employers in Alaska. When an employee is covered by both federal and state law, the employee is entitled to protection under whichever law confers the greatest benefit.
Employers with more than $500,000 in revenue or those who engage in interstate commerce are covered by the federal minimum wage law. Effective July 24, 2009 those Alaska employers must begin paying the federal minimum wage of $7.25 per hour.
An Alaska employer engages in interstate commerce (more…)
Violations of federal and Alaska overtime laws were at the heart of a settlement recently reached between Wal-Mart and the US Department of Labor. Wal-Mart, a retail giant, will pay almost 87,000 employees in Alaska and across the nation back pay and interest totaling $33 million.
Wal-Mart has to pay these employees because they did not receive proper overtime compensation. These employees, who often worked long hours, were salaried and held jobs such as manager trainee, programmer trainee, and intern. Although many people believe that no salaried employees receive overtime, that isn’t true. In this case, the employees were what the US Department of Labor ruled as “non-exempt salaried.” When employees are considered “non-exempt salaried,” they should receive overtime pay for hours worked beyond the standard 40 per week.
To determine if federal and Alaska minimum wage laws make a salaried employee eligible for overtime pay, consider their salary. If employees earn under $455 a week ($23,660 a year), then the guidelines created in recent years state that they are entitled to overtime compensation for hours worked above 40 per week.
In fact, an employee can earn more than $23,600 per year and still be eligible for overtime pay. The determining factor is whether the employee has the power to make significant decisions concerning a division, a department, or a store. Usually, managers who are paid a salary have the authority to hire and fire 3 or more employees.
Other claims against Wal-Mart are not addressed in this settlement. This settlement only resolves certain violations that are defined in the judgment. This agreement does not impact any litigation brought against Wal-Mart by private parties, nor does it impact the ability of any worker to file a complaint against Wal-Mart with the US Department of Labor.
Wal-Mart isn’t the first business to try to avoid paying employees overtime. Howard Johnson’s was found guilty of using an approach similar to the one used by Wal-Mart. In the case of the hospitality businesses, “assistant managers” worked long hours for low pay.
The bottom line on the Alaska minimum wage is that employers face no changes to it in the near term future. There could be another attempt to change the Alaska minimum wage come next session of the legislature next year, but for the meantime, the Alaska minimum wage poster that you have hanging on the wall of your break room is still good to go, as well as the federal minimum wage poster that you have hanging there too.
Of course, that federal minimum wage poster might need some updating sooner or later, if and when the House and the Senate in the capital of Washington DC can finally figure out what and how they want to compromise on the federal minimum wage bills that they have.
Even when the federal minimum wage passes, if it does, the only change that Alaska employers will need to make would be for that minimum wage poster. The amount of minimum wage that you pay your employees would not be affected by the federal minimum wage change, because the new federal minimum wage—of $5.85 per hour—would still be less than the $7.15 per hour that is the Alaska minimum wage currently.
It wouldn’t be until 2009, actually, until the federal minimum wage gets to that same $7.15 per hour level, and by then, who knows what level the Alaska minimum wage will be at? It could be increased to $8 or beyond by that time.
In the meantime, Alaska employers can continue to follow their Alaska minimum wage law as they have been for the past three to four years. That includes all of the exemptions of the Alaska minimum wage, including those exemptions for farm workers, shrimp workers, domestic servants, nonprofit and religious employees, and bona fide professional and executive employees.
Unlike Alabama, Alaska does have its own minimum wage law, which dictates that almost all employers in the state have to pay their employees $7.15 per hour. This minimum wage level in Alaska has stayed at this level since about 2002, so it is not surprising that the minimum wage increase craze that has swept the county also hit Alaska.
But it did not lead to the minimum wage going up in the state. There was a bill on the table in the winter that would have raised the Alaska minimum wage to $8 per hour, but the bill did not make it out of a House committee as of late February. The bill did not have enough votes to make it out of the committee, and thus would not have had enough votes in the full House even if it could have made it there.
The bill in the Alaska House was called House Bill 42, and it had the support of about 10 Democrats, but that was not enough to get it through with a majority in the House Labor and Commerce Committee. One of the sticking points for this Alaska minimum wage bill had been an inflation index trigger, which would have raised the Alaska minimum wage every year henceforth based on the inflation index.
There would have been another part of the Alaska minimum wage bill that would have automatically triggered an increase to the state minimum wage if and when the federal minimum wage goes up, which would have always made sure that the Alaska minimum wage would have stayed at least $1 ahead of the federal minimum wage at all times.
There was also a compromise bill floating around up there which would have kicked in if the federal minimum wage failed on a tie vote that would have raised the Alaska minimum wage to $7.65.
This past Friday, the fate of the minimum wage increase in Alaska could have been decided. On Friday, lawmakers in Juneau the capital had a huge debate over a bill that was being presented by 10 Democrat lawmakers there. The bill would have raised the minimum wage in Alaska from $7.15 per hour, its current level, to $8 per hour, as well as added a mechanism by which the Alaska minimum wage would have increased every year after according to what the consumer price index said inflation was.
What happened Friday, however, was that in the House Labor and Commerce Committee, the new Alaska minimum wage law could not get out of the committee. Even after Rep. Kurt Olson, a Republican from Soldotna, tried a compromise, which would have raised the Alaska minimum wage to $7.65 per hour if the federal minimum wage passes, this compromise law ended up in a tie vote in the committee. Two hours of debate and talks by outside experts and people did not sway either side.
The arguments for those against and for the new minimum wage in Alaska are the same we have heard in Washington DC, as well as those across every state considering a new minimum wage increase. Those for the minimum wage increase say it is needed to help families have a living wage. Those against it say that it will hurt businesses and the economy.
It seems that the Alaska minimum wage will stay the way it is for the foreseeable future, as my sources say that this tie vote all but kills the new law. That leaves Alaska tenth on the list of highest minimum wages in the United States.