Wage and Hour Proposed Regulations

Questions and Answers

Question 1:

How are employers supposed to pay out sick leave for employees that don't have a standard hourly rate such as employees that are paid day rates, commission, at multiple rates, or through other agreements?

Answer:

Under proposed regulation 8 AAC 15.100, employees are to be paid sick leave at their regular rate. This rate is calculated based on the applicable section of 29 CFR 778. Compensation methods specifically addressed are pieceworkers, employees paid at multiple hourly rates, employees paid in wages other than cash, employees that receive a commission, and employees that receive a bonus.

Question 2:

How are employers supposed to decide if they have less than or greater than 15 employees when their total number of employees fluctuates throughout the year?

Answer:

Based on comments, the department is revising regulation 8 AAC 15.106 to require employers to use a Full Time Equivalent (FTE’s) calculation to determine employer size.

Question3:

What employees are counted for the purpose of determining employer size?

Answer:

All hours worked by part-time, full-time, or seasonal employees must be included in the calculation of FTE’s.

Question 4:

How does front-loading of leave affect the requirement to rollover unused sick leave at the end of the year?

Answer:

Under proposed 8 AAC 15.107, Employers that front-load the proper amount of sick leave are not required to carry forward any unused sick leave to the next year.

Question 5:

How are employers supposed to determine if their existing PTO plan meets the requirements of the new laws or if they must provide additional paid sick leave?

Answer:

Under proposed 8 AAC 15.108, to not provide additional paid sick leave, employers must have a PTO policy that meets the minimum usage and accrual standards of AS 23.10.066, and notify employees that their PTO plan will be used to meet the requirements of the paid sick leave law.

Question 6:

How should employers keep track of paid time off and paid sick leave to ensure the provisions of the law can be demonstrated to have been met when the employer uses a combined PTO and sick leave plan?

Answer:

Recordkeeping under 8 AAC 15.160(h) requires that the sick leave used in the accrual year and the sick leave balance be included in statements of earnings and deductions. In instances where an employer combines sick leave with another paid leave program, the employer has satisfied the requirement if the statement of earnings shows the paid leave used in the accrual year and the leave balance. Any additional recordkeeping is the subject of business practices not addressed by the proposed regulation.

Question 7:

How does cashing out sick leave interact with the requirement to reinstate sick leave balances for employees rehired within 6 months of termination?

Answer:

Under proposed regulation 8 AAC 15.109(b) the employer’s full obligation of the sick leave requirement is met if the employee voluntarily accepts the cash-out of sick leave. This means if an employee accepts a voluntary cash-out of paid sick leave upon termination of employment, they have received the benefit as required by law. No sick leave must be reinstated if they are rehired within 6 months.

Question 8:

Are employers able to cap the amount of sick leave that they pay out to employees?

Answer:

Under AS 23.10.066, employees are not entitled to accrue or use more than 40/56 hours of paid sick leave per year, based on employers’ size, meaning an employee's yearly accrual can be capped at 40 hours per year for employers with less than 15 employees, and 56 for employers with 15 employees or more.

Question 9:

Are employers limited to paying out sick leave in 8-hour increments for employees who regularly work longer shifts?

Answer:

Employees should be paid their regular hourly rate for all scheduled hours not worked for a qualifying absence.

Question 10:

To satisfy the written notice requirement, do employers have to provide employees with their exact accrual rate or does a table that lists multiple accrual rates based on tenure suffice?

Answer:

Based on proposed regulation 8 AAC 15.113, transmission of the written notice through a handbook or manual is allowed. Accrual rates that are displayed as a table instead of a fixed number would satisfy the requirement as long as they meet the accrual requirements of AS 23.10.066.

Question 11:

Do the hours an employer pays for vacation & holiday count towards the Sick Leave Hour accrual or is it hours actually worked?

Answer:

8 AAC 15.119 (1)(b): “Hours Worked” in AS 23.10.066 is clarified to not include holidays, vacation, time spent not working, or other non-working hours.