How Do Alaska’s Final Paid Sick Leave Rules Differ from the Proposed Rules?

The Alaska Department of Labor & Workforce Development’s final rules implementing the paid sick leave provisions of Ballot Measure 1 (2024) became effective September 25, 2025. Previously, we highlighted what the proposed rules included. Here, we discuss notable changes in the final rules. The Department did not publish a summary of the public comments it received or explain whether and/or why it did or did not factor in those comments when finalizing the rules.

Rate of Pay. Although the Department sticks with requiring employers to use the formula for calculating the “regular” rate of pay for overtime purposes when determining how much to pay employees when they use paid sick leave, for employees who work at two or more rates the Department now allows both the previously proposed “weighted average” method (for the workweek) and the “rate in effect” method (for the shift).

Business Size. Different standards apply depending on whether an employer has 15 or more, or 14 or fewer, employees. The final rule uses “full-time equivalents (FTEs)” rather than “employees.” Additionally, for businesses that did not operate during the previous calendar year, the final rules use a two-step approach. First, a business must calculate FTE numbers based on its first three months of operating in the current calendar year. It must then perform quarterly calculations until a calendar year calculation can occur.

Definition of Year. A new rule addresses what is a “year” for compliance purposes. It requires an employer to establish a “year” that is consecutive 52-week period. If it does not, the default year is the calendar year.

Definition of Day. The final rules scrap a proposal to define a “full day” as not more than eight hours, thereby allowing an employee to receive “full” payment when they use paid sick leave on a day that would include working more than eight hours, and an employer to deduct from an employee’s leave bank more than eight hours of leave for such an absence.

Next Steps: Employers should review the final rules to see whether and/or how their policies and practices need to be adjusted. For employers with questions about what the final rules mean, or concerns about issues the final rules do not address, in addition to consulting counsel they might consider writing to the Department because on September 17, 2025 it solicited stakeholder input for ideas on how these and other Department rules might be (further) revised.