The Alaska Department of Labor and Workforce Development (LWD) has issued updated regulations detailing how employers may deduct the reasonable cost of board and lodging for employees from the state minimum wage. These regulations are effective July 28, 2023.
The details:
The updated regulations stipulate that employers may make deductions from the Alaska state minimum wage (currently $10.85 per hour) if the following conditions are met:
(1) The board or lodging facilities are customarily furnished by the employer to the employee.
(2) The cost to the employee is reasonable and without profit to the employer.
(3) The employer provides prior written notice to the employee of the deduction to the minimum wage. The written notice must be signed by the employee and state that acceptance of the deduction is voluntary. The employer must also provide a basic description of the boarding/lodging to be deducted and the amount to be deducted.
Next steps:
Alaska employers utilizing the board and lodging deduction toward the state minimum wage should review the updated regulations and implement the necessary procedures to meet the requirements of the updated regulations while considering the impact of federal law.
Have questions?
Please contact your dedicated ADP® Service Representative with any questions.
Thank you,
ADP