Alaska Overtime Laws

September 14th 2024

The Alaska labor law encompasses a wide range of regulations and provisions designed to protect the rights of workers in the state. Among these provisions, the laws regarding overtime pay play a crucial role in ensuring fair compensation for employees who work beyond the standard workweek. Overtime laws are established to prevent the exploitation of workers and to promote a balanced and equitable work environment.

This article will provide information to successfully navigate Alaska’s overtime regulations, whether you’re an employer aiming for compliance or an employee defending your rights.

This article covers:

Alaska Overtime Rates

In Alaska, the standard working week as established by the Fair Labor Standards Act (FLSA) consists of 40 hours within a seven-day period. Overtime refers to any hours worked beyond the 40-hour threshold for full-time employees. During overtime hours, employees are entitled to receive compensation at a rate of 1.5 times their regular pay.

Since the regular minimum wage in Alaska is $11.73 per hour, this means Alaska’s overtime minimum rate is $17.59 per hour. 

Overtime Entitlement in Alaska

According to Alaska overtime laws, overtime pay is required for any non-exempt employees.

However, Alaska has implemented several exceptions to these overtime laws, including exemptions for small businesses employing four or fewer individuals. The exemptions granted are dependent on various factors, such as the employee’s age, the industry they work in, and the nature of their employment.

Read more about your overtime rights in Alaska and Overtime Exceptions and Exemptions in Alaska.

Compensatory Time in Alaska

In the state of Alaska, it is important to note that employers are not legally allowed to provide compensatory time, also known as “comp time”. Comp time is usually used as a substitute for paying overtime wages. 

However, any nonexempt employee still has the right to receive monetary overtime pay when they work beyond the standard working hours. This overtime compensation should be included in their regular paycheck and indicated on their pay stub.

Overtime Limitations for Nurses in Alaska

According to Alaska regulations, it is specified that a healthcare facility cannot compel or exert pressure on a Registered Nurse or Licensed Practical Nurse (LPN) to work beyond their regular shift or accept overtime if the nurse believes that doing so would pose a risk to the safety of patients or employees. This regulation applies to nurses employed in health care facilities, excluding federal or tribal facilities.

Exceptions to the limitation on working beyond agreed-upon regular shifts or accepting overtime for Registered Nurses and Licensed Practical Nurses in healthcare facilities in Alaska include:

  • School nurse employed by a health care facility during a field trip.
  • Nurses who voluntarily work overtime on a medical transport aircraft.
  • Nurses involved in an ongoing medical procedure that hasn’t been completed.
  • Nurses working during an unforeseen emergency.
  • Nurses working during unforeseen weather conditions.
  • Nurses working at a rural health care facility that has declared a temporary nurse-staffing emergency.
  • Nurses working during a previously agreed-upon on-call time.
  • Nurses voluntarily working overtime within professional standards and safe patient care, provided it does not exceed 14 consecutive hours.
  • Nurses voluntarily working beyond 80 hours in a 14-day period, as long as they do not work more than 14 consecutive hours without a 10-hour break.
  • Nurses working the first two hours on overtime status while the health care facility arranges a replacement, as long as the nurse does not exceed 14 consecutive hours on duty.
  • Nurses employed at a psychiatric treatment hospital or residential psychiatric treatment center that exclusively treats children.

Overtime for Piece Rate-Based Employees in Alaska

In Alaska, when an employee is paid based on a piece-rate system, their regular hourly rate of pay is calculated by adding up their total earnings from piece rates and any other sources (like production bonuses) for the workweek. This total amount is then divided by the number of hours worked in that week to determine the employee’s regular rate. 

If the employee works extra hours, they are entitled to receive an overtime payment equal to half of their regular rate multiplied by the number of hours worked beyond 40 in that week. If the employee has already received straight-time compensation for all hours worked through piece rates or supplementary payments, only half-time pay is required for overtime hours. 

Overtime for Commission-Based Employees in Alaska

When an employee in Alaska receives a commission every week, it must be combined with their other earnings for that workweek. The total amount is then divided by the total number of hours worked in the week to determine the employee’s regular hourly rate for that specific workweek. 

Any overtime hours worked beyond the maximum standard hours must be compensated at half of that regular hourly rate.

For example, let’s say an employee works 45 hours a week at a rate of $11.73/hour (Alaska minimum wage) and receives $50 in commissions for that week. 

(Total hours x Hourly Rate) + Commission

= (45 x 11.73) + 50

= $577.85 (total earnings for the week)

Then, divide that by the total hours worked in the week.

= $577.85/ 45

=$12.84 (new regular hourly rate)

To determine the overtime rate for the commissioned employees, we need to take that new regular hourly rate and halve it.

$12.84 / 2

= $6.42

Since the employee worked an extra 4 hours in the week, that makes his overtime compensation $32.1 ($6.42 x 5 hours).

The amount will vary according to the hours worked, hourly rate, and commission earned.

Overtime Exceptions and Exemptions in Alaska

The Alaska Wage and Hour Act exempts the following individuals from receiving overtime compensation:

  • Employees of employers with less than 4 employees.
  • Employees involved in handling, packing, or processing agricultural or horticultural commodities.
  • Employees of small mining operations with a maximum of 12 employees, limited to certain working hours and workweeks during a designated period.
  • Employees engaged in agriculture.
  • Employees working for newspapers with a circulation of less than 1,000.
  • Switchboard operators in public telephone exchanges with fewer than 750 stations.
  • Employees handling telegraphic, telephone, or radio messages for the public, if the agency’s revenue does not exceed $500 per month.
  • Employees working as seamen.
  • Employees involved in forestry or lumber operations with a total employee count not exceeding 12.
  • Employees working as outside buyers of poultry, eggs, cream, or milk.
  • Casual employees as defined by regulations from the Commissioner of Labor.
  • Hospital employees providing medical services.
  • Employees covered by flexible-hour work plans in collective bargaining agreements or approved written agreements filed with the Department.
  • Line haul truck drivers for trips exceeding 100 road miles one way, under certain compensation systems.
  • Community health aides employed by local or regional health organizations.
  • Flat-rate mechanics servicing automobiles, light trucks, and motor homes, meeting specific compensation criteria.
  • Employees with voluntary written agreements for trading work shifts in certain air carrier employment, subject to specified conditions.
  • Flight crew members (pilots, co-pilots, flight engineers, and flight attendants) employed by air carriers subject to the Railway Labor Act.

Statute of Limitations for Unpaid Overtime in Alaska

Unless initiated within two years after the cause of action arises, any claims for unpaid minimum wages, unpaid overtime compensation, or liquidated damages are permanently prohibited. 

Legal Cases Relating to Overtime Compensation in Alaska

Below, we present law cases relating to fair overtime compensation for employees in Alaska: 

1. Parties Reach a Settlement of $2M in Unpaid Overtime Wage Lawsuit

In this case, Laura Peterson filed a lawsuit, on behalf of herself and similarly situated employees, against Alaska Communications Systems Group (ACS). Peterson and the other employees worked as client account managers for ACS. Peterson claimed that ACS violated the Fair Labor Standards Act (FLSA) and the Alaska Wage and Hour Act (AWHA) by misclassifying them as overtime-exempt salaried employees. This resulted in the failure to pay appropriate overtime wages. The court conditionally certified the FLSA collective action, and the class consisted of 74 members who sought compensation.

The parties reached a settlement agreement, which was fully executed in August 2021. The agreement resolved all of the class members’ claims in exchange for a non-reversionary payment of $2,087,500. Each class member received a share of the net settlement based on a system of “Salary Points” and “Commission Points” calculated from their employment records. The average pre-tax award for class members was expected to be $14,000, with the largest individual payment exceeding $60,000. They would also receive service/incentive awards of $30,000 and $15,000.

The court preliminarily approved the settlement agreement. The class counsel sought $688,875 in attorney’s fees, which represented one-third of the total settlement payment, and reimbursement for $272,654.49 of out-of-pocket costs. They have spent over 11,000 hours litigating the case over nine years. Additionally, $12,500 was sought for the settlement administrator’s costs.

Overall, the court found that the settlement agreement and related requests were fair, reasonable, and in the best interest of the class members, and approved them accordingly.

Key lessons from this case:

  • Improper classification of employees as overtime-exempt can lead to legal action
  • Class action lawsuits can be filed for overtime violations. This allows multiple individuals with similar claims to join together and seek relief collectively.
  • In overtime lawsuits, settlement agreements typically involve employers paying monetary compensation to employees in exchange for the employees releasing their claims.
2. Employee Fails to Prove Willful Misconduct in Overtime Pay Lawsuit

In the case of Bey v. Dynamic Computing Services (DCS) Corp., Debra Bey filed a complaint against DCS for failure to compensate her and other employees for working overtime. Bey was hired by DCS to work at Alaska Regional Hospital as a consultant on a medical software transition project. DCS sought summary judgment against Bey’s allegations.

DCS argued that Bey’s claim was time-barred and that she was exempt from overtime pay as a computer employee. Bey agreed to the statute of limitations issue but contends that the extended 3-year period applied due to DCS’s willful violation. However, the court determined that there was no evidence of willfulness on DCS’s part and that the claim fell outside the standard 2-year limitations period. 

The court also found that Bey’s position qualified as an exempt computer employee under the FLSA. Therefore, the court granted DCS’s motion for summary judgment and dismissed Bey’s claims.

Key lessons from this case:

  • Employees have a limited time frame to file overtime claims. There is a standard two-year limitation period which extends to 3 years for willful violations.
  • To establish a willful violation, there needs to be evidence that the employer disregarded the possibility of an FLSA violation. 
  • The classification of an employee as exempt can be considered reasonable if based on the job description and duties performed.
3. Parties Argue Over Interpretation of Alaska Statutes on Payment for Overtime

This case involves a dispute between Alaska Airlines and some of its employees over the interpretation of statutory exemptions from the overtime provision of the Alaska Wage and Hour Act (AWHA). The employees who work in Prudhoe Bay argued that they were entitled to overtime payments for work over 40 hours a week or 10 hours a day. Alaska Airlines contended that their work schedule, as defined in their collective bargaining agreements (CBA), was exempt from AWHA’s overtime provision. The CBA included side letter agreements stating that the employees worked 14 consecutive 12-hour days, followed by 14 days off, and received overtime payments only for hours worked more than this schedule. 

The main issue was the interpretation of AS 23.10.060(d)(13). The employees argued for a narrow definition of a “flexible work hour plan” that would include only schedules of 40 hours a week or 10 hours a day. However, the court concluded that the plain language of the statute and its legislative history supported a broader interpretation of the exemption.

The court analyzed the statutory context and compared it to another exemption in AS 23.10.060(d)(14), which applied to voluntary flexible work-hour plans negotiated directly between an employee and an employer. The court found that the absence of similar restrictions in subsection (d)(13) indicated the legislature’s intent not to limit the exemption for plans included in CBA. 

Based on their analysis, the court held that the employee’s work schedule, included in their CBA, was exempt from AWHA’s overtime requirements. Therefore, the superior court’s decision to grant summary judgment in favor of Alaska Airlines was affirmed.

Key lessons from this case:

  • The terms and provisions of these agreements can affect the applicability of overtime laws and exemptions.
  • The AWHA includes statutory exemptions that can impact the application of overtime provisions.
  • Side letter agreements, incorporated into CBAs, can provide variations in work and pay schedules based on unique working conditions.

Learn more about Alaska Labor Laws through our detailed guide.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.